Document:

Registration Rights Agreement Dated as of December 23, 2004

 
Exhibit 4.4 
  
 EXECUTION VERSION 
  

  
 REGISTRATION RIGHTS AGREEMENT 
  
 Dated as of December 23, 2004 
  
 By and Among 
  
 MAGNACHIP SEMICONDUCTOR S.A. 
  
 and 
  
 MAGNACHIP SEMICONDUCTOR FINANCE COMPANY 
  
 and 
  
 THE GUARANTORS NAMED HEREIN

  
 as Issuers, 
  
 and 
  
 UBS SECURITIES LLC, 
 CITIGROUP GLOBAL MARKETS INC., 
 GOLDMAN, SACHS & CO., 
 J.P. MORGAN SECURITIES INC., 
 and 
 DEUTSCHE BANK SECURITIES INC. 
 as Initial
Purchasers 
  
 Floating Rate Second Priority Senior Secured Notes
due 2011 
  
 6 7/8% Second Priority Senior Secured Notes due 2011 
  

 TABLE OF CONTENTS 
  

							
	 	  	 	  	 	  	Page

	1.	  	Definitions	  	1
			
	2.	  	Exchange Offer	  	4
			
	3.	  	Shelf Registration	  	8
			
	4.	  	Liquidated Damages	  	9
			
	5.	  	Registration Procedures	  	11
			
	6.	  	Registration Expenses	  	19
			
	7.	  	Indemnification	  	20
			
	8.	  	Rules 144 and 144A	  	23
			
	9.	  	Underwritten Registrations	  	23
			
	10.	  	Miscellaneous	  	24
				
	 	  	(a)	  	No Inconsistent Agreements	  	24
	 	  	(b)	  	Adjustments Affecting Registrable Notes	  	24
	 	  	(c)	  	Amendments and Waivers	  	24
	 	  	(d)	  	Notices	  	25
	 	  	(e)	  	Successors and Assigns	  	26
	 	  	(f)	  	Counterparts	  	26
	 	  	(g)	  	Headings	  	26
	 	  	(h)	  	Governing Law	  	26
	 	  	(i)	  	Severability	  	26
	 	  	(j)	  	Securities Held by the Issuer or Its Affiliates	  	26
	 	  	(k)	  	Third-Party Beneficiaries	  	27
	 	  	(l)	  	Attorneys’ Fees	  	27
	 	  	(m)	  	Entire Agreement	  	27
		
	SIGNATURES	  	S-1

  

 -i- 

 REGISTRATION RIGHTS AGREEMENT 
  
 This Registration Rights Agreement (this “Agreement”) is dated as of December 23, 2004, among MagnaChip
Semiconductor S.A., a Luxembourg public limited liability company (société anonyme) (“MagnaChip”), its wholly owned subsidiary, MagnaChip Semiconductor Finance Company, a Delaware corporation (the
“Co-Issuer,” and together with MagnaChip, the “Company”), MagnaChip Semiconductor LLC, a Delaware limited liability company (“Parent”), each of the other Guarantors that are listed on Schedule I
hereto (collectively with the Parent and any entity that in the future executes a supplemental indenture pursuant to which such entity agrees to guarantee the Notes (as hereinafter defined) the “Guarantors” and together with the
Company, the “Issuers”), and UBS Securities LLC, Citigroup Global Markets Inc., Goldman, Sachs & Co., J.P. Morgan Securities Inc. and Deutsche Bank Securities Inc. (the “Initial Purchasers”). 
  
 This Agreement is entered into in connection with the Purchase Agreement,
dated as of December 16, 2004, by and among the Issuers, the Guarantors and the Initial Purchasers (the “Purchase Agreement”), relating to the offering of $300,000,000 of the Issuers’ Floating Rate Second Priority Senior
Secured Notes due 2011 and $200,000,000 of the Issuers’ 6 7/8% Second Priority Senior Secured Notes due 2011 (the “Notes”). The execution and delivery of this Agreement is a condition to the Initial
Purchasers’ obligation to purchase the Notes under the Purchase Agreement. 
  
 The parties hereby agree as follows: 
  
 Section 1. Definitions 
  
 As used in this
Agreement, the following terms shall have the following meanings: 
  
 “action” shall have the meaning set forth in Section 7(c) hereof. 
  
 “Advice” shall have the meaning set forth in Section 5 hereof. 
  
 “Agreement” shall have the meaning set forth in the first introductory paragraph hereto. 
  
 “Applicable Period” shall have the meaning set forth in
Section 2(b) hereof. 
  
 “Board of Directors”
shall have the meaning set forth in Section 5 hereof. 
  
 “Business Day” shall mean a day that is not a Legal Holiday. 
  
 “Commission” shall mean the Securities and Exchange Commission. 
  
 “Day” shall mean a calendar day. 
  
 “Damages Payment Date” shall have the meaning set forth in Section 4(b) hereof. 

 “Delay Period” shall have the meaning set forth in Section 5 hereof. 
  
 “Effectiveness Period” shall have the meaning set forth in
Section 3(b) hereof. 
  
 “Exchange Act” shall
mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder. 
  
 “Exchange Notes” shall have the meaning set forth in Section 2(a) hereof. 
  
 “Exchange Offer” shall have the meaning set forth in Section 2(a) hereof. 
  
 “Exchange Offer Registration Statement” shall have the
meaning set forth in Section 2(a) hereof. 
  
 “Holder” shall mean any holder of a Registrable Note or Registrable Notes. 
  
 “Indenture” shall mean the Indenture, dated as of December 23, 2004, by and between the Issuers and The Bank of New York as trustee,
pursuant to which the Notes are being issued, as amended or supplemented from time to time in accordance with the terms thereof. 
  
 “Initial Purchasers” shall have the meaning set forth in the first introductory paragraph hereof. 
  
 “Inspectors” shall have the meaning set forth in Section
5(n) hereof. 
  
 “Issue Date” shall mean December
23, 2004, the date of original issuance of the Notes. 
  
 “Issuers” shall have the meaning set forth in the introductory paragraph hereto and shall also include the Issuers’ respective permitted successors and assigns. 
  
 “Legal Holiday” shall mean a Saturday, a Sunday or a day on
which banking institutions in New York, New York are required by law, regulation or executive order to remain closed. 
  
 “Liquidated Damages” shall have the meaning set forth in Section 4(a) hereof. 
  
 “Losses” shall have the meaning set forth in Section 7(a)
hereof. 
  
 “NASD” shall have the meaning set
forth in Section 5(s) hereof. 
  
 “Notes” shall
have the meaning set forth in the second introductory paragraph hereto. 
  
 “Participant” shall have the meaning set forth in Section 7(a) hereof. 
  
 “Participating Broker-Dealer” shall have the meaning set forth in Section 2(b) hereof. 
  

 -2- 

 “Person” shall mean an individual, corporation, partnership, joint venture association,
joint stock company, trust, unincorporated organization, limited liability company, government or any agency or political subdivision thereof or any other entity. 
  
 “Private Exchange” shall have the meaning set forth in Section 2(b) hereof. 
  
 “Private Exchange Notes” shall have the meaning set forth in
Section 2(b) hereof. 
  
 “Prospectus” shall mean
the prospectus included in any Registration Statement (including, without limitation, any prospectus subject to completion and a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material
incorporated by reference or deemed to be incorporated by reference in such Prospectus. 
  
 “Purchase Agreement” shall have the meaning set forth in the second introductory paragraph hereof. 
  
 “Records” shall have the meaning set forth in Section 5(n) hereof. 
  
 “Registrable Notes” shall mean each Note upon its original issuance and at all times subsequent thereto,
each Exchange Note as to which Section 2(c)(iii) hereof is applicable upon original issuance and at all times subsequent thereto and each Private Exchange Note upon original issuance thereof and at all times subsequent thereto, in each case until
(i) a Registration Statement (other than, with respect to any Exchange Note as to which Section 2(c)(iii) hereof is applicable, the Exchange Offer Registration Statement) covering such Note, Exchange Note or Private Exchange Note has been declared
effective by the Commission and such Note, Exchange Note or such Private Exchange Note, as the case may be, has been disposed of in accordance with such effective Registration Statement, (ii) such Note has been exchanged pursuant to the Exchange
Offer for an Exchange Note or Exchange Notes that may be resold without restriction under state and federal securities laws, (iii) such Note, Exchange Note or Private Exchange Note, as the case may be, ceases to be outstanding for purposes of the
Indenture or (iv) such Note, Exchange Note or Private Exchange Note has been sold in compliance with Rule 144 or is salable pursuant to Rule 144(k). 
  
 “Registration Default” shall have the meaning set forth in Section 4(a) hereof. 
  
 “Registration Statement” shall mean any appropriate
registration statement of the Issuers covering any of the Registrable Notes filed with the Commission under the Securities Act, and all amendments and supplements to any such Registration Statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein. 
  
 “Requesting Participating Broker-Dealer” shall have the meaning set forth in Section 2(b) hereof. 
  

 -3- 

 “Rule 144” shall mean Rule 144 promulgated under the Securities Act, as such Rule may be
amended from time to time, or any similar rule (other than Rule 144A) or regulation hereafter adopted by the Commission providing for offers and sales of securities made in compliance therewith resulting in offers and sales by subsequent holders
that are not affiliates of an issuer of such securities being free of the registration and prospectus delivery requirements of the Securities Act. 
  
 “Rule 144A” shall mean Rule 144A promulgated under the Securities Act, as such Rule may be amended from time to time, or any similar rule
(other than Rule 144) or regulation hereafter adopted by the Commission. 
  
 “Rule 415” shall mean Rule 415 promulgated under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission. 

 
 “Securities Act” shall mean the Securities Act of 1933,
as amended, and the rules and regulations of the Commission promulgated thereunder. 
  
 “Shelf Filing Event” shall have the meaning set forth in Section 2(c) hereof. 
  
 “Shelf Registration” shall have the meaning set forth in Section 3(a) hereof. 
  
 “Shelf Registration Statement” shall mean a Registration
Statement filed in connection with a Shelf Registration. 
  
 “TIA” shall mean the Trust Indenture Act of 1939, as amended. 
  
 “Trustee” shall mean the trustee under the Indenture and the trustee (if any) under any indenture governing the Exchange Notes and Private Exchange Notes. 
  
 “Underwritten registration or underwritten offering” shall
mean a registration in which securities of any of the Issuers is sold to an underwriter for reoffering to the public. 
  
 Section 2. Exchange Offer 
  
 (a) The Issuers shall (i) file a Registration Statement (the “Exchange Offer Registration Statement”) within 180 days after the Issue
Date with the Commission on an appropriate registration form with respect to a registered offer (the “Exchange Offer”) to exchange any and all of the Registrable Notes for a like aggregate principal amount of notes (the
“Exchange Notes”) that are identical in all material respects to the Notes (except that the Exchange Notes shall not contain terms with respect to transfer restrictions or Liquidated Damages upon a Registration Default), (ii) use
all commercially reasonable efforts to cause the Exchange Offer Registration Statement to be declared effective under the Securities Act on or prior to 210 days after the Issue Date; provided that, the Issuers’ obligations to have the
Exchange Offer Registration Statement declared effective shall be suspended until the date which is 60 days following the date upon which audited financial statements for the year ended December 31, 2005 first become available, to the extent that
the Exchange Offer Registration Statement is prevented from being declared effective due to Parent’s (or the applicable Issuer’s) inability 
  

 -4- 

 to produce five years of selected financial information as required by Item 301 of Commission Regulation S-K, and (iii)
unless the Exchange Offer would not be permitted by applicable law or Commission policy, (a) commence the Exchange Offer and (b) use all commercially reasonable efforts to issue on or prior to 30 Business Days, or longer, if required by the federal
securities laws, after the date on which the Exchange Offer Registration Statement was declared effective by the Commission, the Exchange Notes in exchange for surrender of all Notes validly tendered and not withdrawn prior thereto in the Exchange
Offer. 
  
 Each Holder that participates in the Exchange Offer
will be required to represent to the Issuers in writing that (i) any Exchange Notes to be received by it will be acquired in the ordinary course of its business, (ii) it has no arrangement or understanding with any Person to participate in the
distribution (within the meaning of the Securities Act) of the Exchange Notes in violation of the provisions of the Securities Act, (iii) it is not an affiliate of the Issuers (within the meaning of the Securities Act) or, if it is such an
affiliate, it will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable, (iv) if such Holder is not a broker-dealer, it is not engaged in, and does not intend to engage in, a distribution
of Exchange Notes, (v) if such Holder is a broker-dealer that will receive Exchange Notes for its own account in exchange for Notes that were acquired as a result of market-making or other trading activities, it will deliver a prospectus in
connection with any resale of such Exchange Notes and (vi) such Holder has full power and authority to transfer the Notes in exchange for the Exchange Notes and that MagnaChip and the Co-Issuer will acquire good and unencumbered title thereto free
and clear of any liens, restrictions, charges or encumbrances and not subject to any adverse claims. 
  
 (b) The Issuers and the Initial Purchasers acknowledge that the staff of the Commission has taken the position that any broker-dealer that elects to
exchange Notes that were acquired by such broker-dealer for its own account as a result of market-making or other trading activities for Exchange Notes in the Exchange Offer (a “Participating Broker-Dealer”) may be deemed to be an
“underwriter” within the meaning of the Securities Act and must deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Notes (other than a resale of an unsold allotment resulting
from the original offering of the Notes). 
  
 The Issuers and the
Initial Purchasers also acknowledge that the staff of the Commission has taken the position that if the Prospectus contained in the Exchange Offer Registration Statement includes a plan of distribution containing a statement to the above effect and
the means by which Participating Broker-Dealers may resell the Exchange Notes, without naming the Participating Broker-Dealers or specifying the amount of Exchange Notes owned by them, such Prospectus may be delivered by Participating Broker-Dealers
to satisfy their prospectus delivery obligations under the Securities Act in connection with resales of Exchange Notes for their own accounts, so long as the Prospectus otherwise meets the requirements of the Securities Act. 
  
 In light of the foregoing, if requested by a Participating Broker-Dealer (a
“Requesting Participating Broker-Dealer”), the Issuers agree to use all commercially reasonable efforts to keep the Exchange Offer Registration Statement continuously effective for a period not to exceed 180 days after the date on
which the Exchange Registration Statement is declared effective, or such longer period if extended pursuant to the last paragraph of Section 5 hereof (such period, the “Applicable Period”), 
  

 -5- 

 or such earlier date as all Requesting Participating Broker-Dealers shall have notified the Issuer in writing that such
Requesting Participating Broker-Dealers have resold all Exchange Notes acquired in the Exchange Offer. The Issuers shall include a plan of distribution in such Exchange Offer Registration Statement that meets the requirements set forth in the
preceding paragraph. 
  
 If, prior to consummation of the Exchange
Offer, the Initial Purchasers or any Holder, as the case may be, holds any Notes acquired by it that have, or that are reasonably likely to be determined to have, the status of an unsold allotment in an initial distribution, or if any Holder is not
entitled to participate in the Exchange Offer, the Issuers upon the request of the Initial Purchasers or any such Holder, as the case may be, shall simultaneously with the delivery of the Exchange Notes in the Exchange Offer, issue and deliver to
the Initial Purchasers or any such Holder, as the case may be, in exchange (the “Private Exchange”) for such Notes held by the Initial Purchasers or any such Holder, as the case may be, a like principal amount of notes (the
“Private Exchange Notes”) of the Issuers that are identical in all material respects to the Exchange Notes except that the Private Exchange Notes may be subject to restrictions on transfer and bear a legend to such effect. The
Private Exchange Notes shall bear the same CUSIP number as the Exchange Notes (if permitted by the CUSIP Service Bureau). 
  
 Interest on each Exchange Note and Private Exchange Note issued pursuant to the Exchange Offer and in the Private Exchange will accrue from the last
interest payment date on which interest was paid on the Notes surrendered in exchange therefor or, if no interest has been paid on the Notes, from the Issue Date. 
  
 Upon consummation of the Exchange Offer in accordance with this Section 2, the Issuers shall have no further registration
obligations other than the Issuers’ continuing registration obligations with respect to (i) Private Exchange Notes, (ii) Exchange Notes held by Participating Broker-Dealers and (iii) Notes or Exchange Notes as to which clause (c)(iii) of this
Section 2 applies. 
  
 In connection with the Exchange Offer, the
Issuers shall: 
  
 (1) mail or cause to be mailed
to each Holder of record entitled to participate in the Exchange Offer a copy of the Prospectus forming part of the Exchange Offer Registration Statement, together with an appropriate letter of transmittal and related documents; 
  
 (2) utilize the services of a depositary for the Exchange
Offer with an address in the Borough of Manhattan, The City of New York, which may be the Trustee or an affiliate thereof; 
  
 (3) permit Holders to withdraw tendered Notes at any time prior to the close of business, New York time, on the last Business Day on which
the Exchange Offer shall remain open; and 
  
 (4)
otherwise comply in all material respects with all applicable laws, rules and regulations. 
  

 -6- 

 As soon as practicable after the close of the Exchange Offer and the Private Exchange, if any, the
Issuers shall: 
  
 (1) accept for exchange all
Registrable Notes validly tendered and not validly withdrawn by the Holders pursuant to the Exchange Offer and the Private Exchange, if any; 
  
 (2) deliver or cause to be delivered to the Trustee for cancellation all Notes so accepted for exchange; and 
  
 (3) cause the Trustee to authenticate and deliver promptly
to each such Holder tendering such Registrable Notes, Exchange Notes or Private Exchange Notes, as the case may be, equal in principal amount to the Registrable Notes of such Holder so accepted for exchange; provided that in the case of any
Registrable Notes held in global form by a depositary, authentication and delivery to such depositary of one or more replacement Exchange Notes or Private Exchange Notes in global form in an equivalent principal amount thereto for the account of
such Holders in accordance with the Indenture shall satisfy such authentication and delivery requirement. 
  
 The Exchange Offer and the Private Exchange shall not be subject to any conditions, other than that (i) the Exchange Offer or Private Exchange, as the
case may be, does not violate applicable law or any applicable interpretation of the staff of the Commission, (ii) no action or proceeding shall have been instituted or threatened in any court or by any governmental agency which might materially
impair the ability of the Issuers to proceed with the Exchange Offer or the Private Exchange, and no material adverse development shall have occurred in any existing action or proceeding with respect to the Issuers and (iii) all governmental
approvals shall have been obtained, which approvals the Issuers deems necessary for the consummation of the Exchange Offer or Private Exchange. 
  
 The Exchange Notes and the Private Exchange Notes shall be issued under (i) the Indenture or (ii) an indenture identical in all material respects to the
Indenture (in either case, with such changes as are necessary to comply with any requirements of the Commission to effect or maintain the qualification thereof under the TIA or exemption from such qualification) and which, in either case, has been
qualified under the TIA or is exempt from such qualification and shall provide that (a) the Exchange Notes shall not be subject to the transfer restrictions set forth in the Indenture and (b) the Private Exchange Notes shall be subject to the
transfer restrictions set forth in the Indenture. The Indenture or such indenture shall provide that the Exchange Notes, the Private Exchange Notes and the Notes shall vote and consent together on all matters as one class and that none of the
Exchange Notes, the Private Exchange Notes or the Notes will have the right to vote or consent as a separate class on any matter. 
  
 (c) In the event that (i) any changes in law or the applicable interpretations of the staff of the Commission do not permit the Issuers to effect the
Exchange Offer, (ii) for any reason the Exchange Offer is not consummated within 20 days of the last day permitted by Section 2(a) hereof, (iii) prior to the 20th day following consummation of the Exchange Offer, any Holder, other than the Initial Purchasers, notifies the Issuers that it is prohibited by law or the applicable interpretations of the staff of the
Commission from participating in the Exchange Offer or, that it may not resell the 
  

 -7- 

 Exchange Notes received by it in the Exchange Offer without delivering a prospectus and the Prospectus contained in the
Exchange Offer Registration Statement is not appropriate or available for such resales (other than due solely to the status of such Holder as an affiliate of the Issuers within the meaning of the Securities Act) or (iv) in the case of any Initial
Purchaser that participates in the Exchange Offer or acquires Private Exchange Notes, such Initial Purchaser notifies the Issuers that it will not or did not receive freely tradeable Exchange Notes in the Exchange Offer in exchange for Notes or
Private Exchange Notes that have the status of unsold allotments in an initial distribution (provided that the requirement that a Participating Broker-Dealer deliver a Prospectus in connection with sales of Exchange Notes acquired in the Exchange
Offer in exchange for Notes acquired as a result of market-making activities or other trading activities shall not result in such Exchange Notes being not “freely tradeable”)(each such event referred to in clauses (i) through (iv) of this
sentence, a “Shelf Filing Event”), then the Issuers shall file a Shelf Registration pursuant to Section 3 hereof. 
  
 Section 3. Shelf Registration 
  
 If at any time a Shelf Filing Event shall occur, then: 
  
 (a) Shelf Registration. The Issuers shall file with the Commission a Registration Statement for an offering to be made on a continuous basis
pursuant to Rule 415 covering all of the Registrable Notes not exchanged in the Exchange Offer, Private Exchange Notes and Exchange Notes as to which Section 2(c)(iii) is applicable (the “Shelf Registration”). The Issuers shall use
all commercially reasonable efforts to file with the Commission the Shelf Registration on or prior to 30 days after such filing obligation arises. The Shelf Registration shall be on Form S-1 or another appropriate form permitting registration of
such Registrable Notes for resale by Holders in the manner or manners designated by them (including, without limitation, one or more underwritten offerings). The Issuers shall not permit any securities other than the Registrable Notes to be included
in the Shelf Registration. 
  
 (b) The Issuers shall use all
commercially reasonable efforts (x) to cause the Shelf Registration to be declared effective under the Securities Act on or prior to 90 days after the Shelf Registration is required to be filed with the Commission; provided that, the Issuers’
obligations to have the Shelf Registration declared effective shall be suspended until the date which is 60 days following the date upon which audited financial statements for the year ended December 31, 2005 first become available, to the extent
that the Shelf Registration is prevented from being declared effective due to Parent’s (or the applicable Issuer’s) inability to produce five years of selected financial information as required by Item 301 of Commission Regulation S-K and
(y) to keep the Shelf Registration continuously effective under the Securities Act for the period ending on the date which is two years from the Issue Date, subject to extension pursuant to the penultimate paragraph of Section 5 hereof (the
“Effectiveness Period”), or such shorter period ending when all Registrable Notes covered by the Shelf Registration have been sold in the manner set forth and as contemplated in the Shelf Registration; provided,
however, that (i) the Effectiveness Period in respect of the Shelf Registration shall be extended to the extent required to permit dealers to comply with the applicable prospectus delivery requirements of Rule 174 under the Securities Act and
as otherwise provided herein and (ii) the Issuers may suspend the effectiveness of the Shelf Registration Statement by written notice to the Holders solely as a result of (A) the filing of a post-effective amendment to the Shelf Registration
Statement to 
  

 -8- 

 incorporate annual audited financial information with respect to the Issuers where such post-effective amendment is not
yet effective and needs to be declared effective to permit Holders to use the related Prospectus or (B) during a Delay Period (as defined below) and (iii) no Holder (other than an Initial Purchaser) shall be entitled to have the Registrable Notes
held by it covered by such Shelf Registration Statement unless such Holder agrees in writing to be bound by all the provisions of this Agreement applicable to such Holder and furnishes to the Issuers and the Trustee in writing, within 20 days after
receipt of a request therefor, such information as the Issuers or the Trustee may reasonably request for inclusion in any Shelf Registration Statement. 
  
 (c) Supplements and Amendments. The Issuers agree to supplement or make amendments to the Shelf Registration Statement as and when required by the
rules, regulations or instructions applicable to the registration form used for such Shelf Registration Statement or by the Securities Act or rules and regulations thereunder for shelf registration, or if reasonably requested in writing by the
Holders of a majority in aggregate principal amount of the Registrable Notes covered by such Registration Statement or by any underwriter of such Registrable Notes. 
  
 Section 4. Liquidated Damages 
  
 (a) The Issuers and the Initial Purchasers agree that the Holders will suffer damages if the Issuers fail to fulfill their
obligations under Section 2 or Section 3 hereof and that it would not be feasible to ascertain the extent of such damages with precision. Accordingly, the Issuers agree that if: 
  
 (i) the Exchange Offer Registration Statement is not filed with the Commission on or prior to the 180th day
following the Issue Date or, if that day is not a Business Day, the next day that is a Business Day, 
  
 (ii) the Exchange Offer Registration Statement is not declared effective on or prior to the 210th day following the Issue Date or, if that
day is not a Business Day, the next day that is a Business Day or is declared effective by such date but thereafter ceases to be effective or usable, except if the Exchange Offer Registration Statement ceases to be effective or usable as
specifically permitted by the penultimate paragraph of Section 5 hereof; provided that, such date shall be extended until the date which is 60 days following the date upon which audited financial statements for the year ended December 31,
2005 first become available, to the extent that the Exchange Offer Registration Statement is prevented from being declared effective due to Parent’s (or the applicable Issuer’s) inability to produce five years of selected financial
information as required by Item 301 of Commission Regulation S-K, 
  
 (iii) the Exchange Offer is not consummated within 30 Business Days, or if that day is not a Business Day, the next day that is a Business Day, after the Exchange Offer Registration Statement was declared effective by
the Commission, or longer if required by federal securities laws; or 
  
 (iv) the Shelf Registration Statement is required to be filed but (A) is not declared effective on or prior to 90 days after the Shelf Registration is required to be filed with the Commission, or, if either such day
is not a Business Day, the next day that is a Business Day; provided that, the Issuers’ obligations to have the Shelf Registration Statement declared effective 
  

 -9- 

 shall be suspended until the date which is 60 days following the date upon which audited financial
statements for the year ended December 31, 2005 first become available, to the extent that the Shelf Registration Statement is prevented from being declared effective due to Parent’s (or the applicable Issuer’s) inability to produce five
years of selected financial information as required by Item 301 of Commission Regulation S-K or (B) is declared effective by such date but thereafter ceases to be effective or usable at any time prior to the second anniversary of its effective date,
except if the Shelf Registration ceases to be effective or usable as specifically permitted by the penultimate paragraph of Section 5 hereof; provided, further, that such two year period shall be extended by the aggregate number of days of all Delay
Periods 
  
 (each such event referred to in clauses (i) through (iv) a
“Registration Default”), liquidated damages in the form of additional cash interest (“Liquidated Damages”) will accrue on the affected Notes and the affected Exchange Notes, as applicable. The rate of Liquidated
Damages will be 0.25% per annum for the first 90-day period immediately following the occurrence of a Registration Default, increasing by an additional 0.25% per annum with respect to each subsequent 90-day period up to a maximum amount of
additional interest of 1.00% per annum, from and including the date on which any such Registration Default shall occur to, but excluding, the earlier of (1) the date on which all Registration Defaults have been cured or (2) the date on which all the
Notes and Exchange Notes otherwise become freely transferable by Holders other than affiliates of the Issuers without further registration under the Securities Act. 
  
 Notwithstanding the foregoing, (1) the amount of Liquidated Damages payable shall not increase because more than one Registration Default
has occurred and is pending and (2) a Holder of Notes or Exchange Notes who is not entitled to the benefits of the Shelf Registration Statement (i.e., such Holder has not elected to include information) shall not be entitled to Liquidated
Damages with respect to a Registration Default that pertains to the Shelf Registration Statement. Liquidated Damages shall not accrue with respect to Notes that are not Registrable Notes. 
  
 (b) So long as Notes remain outstanding, the Issuers shall notify the Trustee within five Business Days after each and every
date on which an event occurs in respect of which Liquidated Damages is required to be paid. Any amounts of Liquidated Damages due pursuant to clauses (a)(i), (a)(ii), (a)(iii) or (a)(iv) of this Section 4 will be payable in the manner provided for
the payment of interest in the Indenture on each December 15 and June 15 (each a “Damages Payment Date”), as more fully set forth in the Indenture and the Notes, to Holders to whom regular interest is payable on such Damages Payment
Date with respect to Notes that are Registrable Securities. The amount of Liquidated Damages for Registrable Notes will be determined by multiplying the applicable rate of Liquidated Damages by the aggregate principal amount of all such Registrable
Notes outstanding on the Damages Payment Date following such Registration Default in the case of the first such payment of Liquidated Damages with respect to a Registration Default (and thereafter at the next succeeding Damages Payment Date until
the cure of such Registration Default), multiplied by a fraction, the numerator of which is the number of days such Liquidated Damages rate was applicable during such period (determined on the basis of a 360-day year comprised of twelve 30-day
months and, in the case of a partial month, the actual number of days elapsed), and the denominator of which is 360. 
  

 -10- 

 Section 5. Registration Procedures 
  
 In connection with the filing of any Registration Statement pursuant to Section 2 or 3 hereof, the Issuers shall effect such
registrations to permit the sale of the securities covered thereby in accordance with the intended method or methods of disposition thereof, and pursuant thereto and in connection with any Registration Statement filed by the Issuers hereunder, the
Issuers shall: 
  
 (a) Prepare and file with the
Commission the Registration Statement or Registration Statements prescribed by Section 2 or 3 hereof, and use all commercially reasonable efforts to cause each such Registration Statement to become effective and remain effective as provided herein;
provided, however, that if (1) such filing is pursuant to Section 3 hereof, or (2) a Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period relating thereto, before filing any Registration Statement or Prospectus or any amendments or supplements thereto, the Issuers shall furnish to and
afford the Holders of the Registrable Notes covered by such Registration Statement or each such Participating Broker-Dealer, as the case may be, its counsel (if such counsel is known to the Issuers) and the managing underwriters, if any, a
reasonable opportunity to review copies of all such documents (including copies of any documents to be incorporated by reference therein and all exhibits thereto) proposed to be filed (in each case at least five Business Days prior to such filing or
such later date as is reasonable under the circumstances). The Issuers shall not file any Registration Statement or Prospectus or any amendments or supplements thereto if the Holders of a majority in aggregate principal amount of the Registrable
Notes covered by such Registration Statement, or any such Participating Broker-Dealer, as the case may be, its counsel, or the managing underwriters, if any, shall reasonably object on a timely basis. 
  
 (b) Prepare and file with the Commission such amendments and
post-effective amendments to each Shelf Registration Statement or Exchange Offer Registration Statement, as the case may be, as may be necessary to keep such Registration Statement continuously effective for the Effectiveness Period or the
Applicable Period, as the case may be, provided that none of the foregoing shall be required during a Delay Period; cause the related Prospectus to be supplemented by any Prospectus supplement required by applicable law, and as so supplemented to be
filed pursuant to Rule 424 (or any similar provisions then in force) promulgated under the Securities Act, provided that none of the foregoing shall be required during a Delay Period; and comply with the provisions of the Securities Act and the
Exchange Act applicable to it with respect to the disposition of all securities covered by such Registration Statement as so amended or in such Prospectus as so supplemented and with respect to the subsequent resale of any securities being sold by a
Participating Broker-Dealer covered by any such Prospectus, in each case, in accordance with the intended methods of distribution set forth in such Registration Statement or Prospectus, as so amended. 
  
 (c) If (1) a Shelf Registration is filed pursuant to Section
3 hereof, or (2) a Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer 
  

 -11- 

 who seeks to sell Exchange Notes during the Applicable Period relating thereto from whom the Issuers have
received written notice that such Broker-Dealer will be a Participating Broker-Dealer in the applicable Exchange Offer, notify the selling Holders of Registrable Notes, or each such Participating Broker-Dealer, as the case may be, their counsel and
the managing underwriters, if any, as promptly as possible, and, if requested by any such Person, confirm such notice in writing, (i) when a Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to a
Registration Statement or any post-effective amendment, when the same has become effective under the Securities Act (including in such notice a written statement that any Holder may, upon request, obtain, at the sole expense of the Issuers, one
conformed copy of such Registration Statement or post-effective amendment including financial statements and schedules, documents incorporated or deemed to be incorporated by reference and exhibits), (ii) of the issuance by the Commission of any
stop order suspending the effectiveness of a Registration Statement or of any order preventing or suspending the use of any preliminary prospectus or the initiation of any proceedings for that purpose, (iii) if at any time when a Prospectus is
required by the Securities Act to be delivered in connection with sales of the Registrable Notes or resales of Exchange Notes by Participating Broker-Dealers the representations and warranties of the Issuers contained in any agreement (including any
underwriting agreement) contemplated by Section 5(m)(i) hereof cease to be true and correct in all material respects, (iv) of the receipt by the Issuers of any notification with respect to the suspension of the qualification or exemption from
qualification of a Registration Statement or any of the Registrable Notes or the Exchange Notes for offer or sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose, (v) of the happening of any event, the
existence of any condition or any information becoming known to the Issuers that makes any statement made in such Registration Statement or related Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in
any material respect or that requires the making of any changes in or amendments or supplements to such Registration Statement, Prospectus or documents so that, in the case of the Registration Statement, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of the Prospectus, it will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and (vi) of the Issuers’ determination that a post-effective
amendment to a Registration Statement would be appropriate. 
  
 (d) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to be delivered under
the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, use all commercially reasonable efforts to prevent the issuance of any order suspending the effectiveness of a Registration
Statement or of any order preventing or suspending the use of a Prospectus or suspending the qualification (or exemption from qualification) of any of the Registrable Notes or the Exchange Notes, as the case may be, for sale in any jurisdiction,
and, if any such order is issued, to use all commercially reasonable efforts to obtain the withdrawal of any such order at the earliest practicable moment. 
  

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 (e) If (1) a Shelf Registration is filed pursuant to Section 3 hereof or (2) a Prospectus
contained in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period and if
reasonably requested by the managing underwriter or underwriters (if any), the Holders of a majority in aggregate principal amount of the Registrable Notes covered by such Registration Statement or any Participating Broker-Dealer, as the case may
be, (i) promptly incorporate in such Registration Statement or Prospectus a prospectus supplement or post-effective amendment such information as the managing underwriter or underwriters (if any), such Holders or any Participating Broker-Dealer, as
the case may be (based upon advice of counsel), determine is reasonably required to be included therein and request in writing to be included therein and (ii) make all required filings of such prospectus supplement or such post-effective amendment
as soon as practicable after the Issuers have received notification of the matters to be incorporated in such prospectus supplement or post-effective amendment; provided, however, that the Issuers shall not be required to take any
action hereunder that would, in the written opinion of counsel to the Issuers, violate applicable laws or, in any event, during any Delay Period. 
  
 (f) If (1) a Shelf Registration is filed pursuant to Section 3 hereof or (2) a Prospectus contained in the Exchange Offer Registration
Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, furnish to each selling Holder of Registrable Notes
or each such Participating Broker-Dealer, as the case may be, who so requests, its counsel and each managing underwriter, if any, at the sole expense of the Issuers, one conformed copy of the Registration Statement or Registration Statements and
each post-effective amendment thereto, including financial statements and schedules, and, if requested, all documents incorporated or deemed to be incorporated therein by reference and all exhibits. 
  
 (g) If (1) a Shelf Registration is filed pursuant to Section
3 hereof, or (2) a Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during
the Applicable Period, deliver to each selling Holder of Registrable Notes or each such Participating Broker-Dealer, as the case may be, its respective counsel, and the underwriters, if any, at the sole expense of the Issuers, as many copies of the
Prospectus or Prospectuses (including each form of preliminary prospectus) and each amendment or supplement thereto and any documents incorporated by reference therein as such Persons may reasonably request; and, subject to the last paragraph of
this Section 5, the Issuers hereby consent to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders of Registrable Notes or each such Participating Broker-Dealer, as the case may be, and the underwriters
or agents, if any, and dealers (if any), in connection with the offering and sale of the Registrable Notes covered by, or the sale by Participating Broker-Dealers of the Exchange Notes pursuant to, such Prospectus and any amendment or supplement
thereto. 
  
 (h) Prior to any public offering of
Registrable Notes or Exchange Notes or any delivery of a Prospectus contained in the Exchange Offer Registration Statement by any 
  

 -13- 

 Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, use all
commercially reasonable efforts to register or qualify, and to cooperate with the selling Holders of Registrable Notes or each such Participating Broker-Dealer, as the case may be, the managing underwriter or underwriters, if any, and its respective
counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Notes or Exchange Notes, as the case may be, for offer and sale under the securities or Blue Sky laws of such
jurisdictions within the United States as any selling Holder, Participating Broker-Dealer, or the managing underwriter or underwriters reasonably request in writing; provided, however, that where Exchange Notes or Registrable Notes are
offered other than through an underwritten offering, the Issuers agree to use all commercially reasonable efforts to cause the Issuers’ counsel to perform Blue Sky investigations and file registrations and qualifications required to be filed
pursuant to this Section 5(h); keep each such registration or qualification (or exemption therefrom) effective during the period such Registration Statement is required to be kept effective and do any and all other acts or things reasonably
necessary or advisable to enable the disposition in such jurisdictions of such Exchange Notes or Registrable Notes covered by the applicable Registration Statement; provided, however, that the Issuers shall not be required to (A)
qualify generally to do business in any jurisdiction where it is not then so qualified, (B) take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject or (C) subject itself to
taxation in excess of a nominal dollar amount in any such jurisdiction where it is not then so subject. 
  
 (i) If a Shelf Registration is filed pursuant to Section 3 hereof, cooperate with the selling Holders of Registrable Notes and the
managing underwriter or underwriters, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Notes to be sold, which certificates shall not bear any restrictive legends and shall be in a form eligible for
deposit with The Depository Trust Company and enable such Registrable Notes to be in such denominations (subject to applicable requirements contained in the Indenture) and registered in such names as the managing underwriter or underwriters, if any,
or selling Holders may reasonably request in writing at least five Business Days prior to any sale of such Registrable Notes or Exchange Notes. 
  
 (j) Use all commercially reasonable efforts to cause the Registrable Notes or Exchange Notes covered by any Registration Statement to be
registered with or approved by such other governmental agencies or authorities as may be reasonably necessary to enable the seller or sellers thereof or the underwriter or underwriters, if any, to consummate the disposition of such Registrable Notes
or Exchange Notes, except as may be required solely as a consequence of the nature of such selling Holder’s business, in which case the Issuers will cooperate in all reasonable respects with the filing of such Registration Statement and the
granting of such approvals. 
  
 (k) If (1) a
Shelf Registration is filed pursuant to Section 3 hereof, or (2) a Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, upon the occurrence of any event contemplated by Section 5(c)(v) or 5(c)(vi) hereof, as promptly as practicable prepare 
  

 -14- 

 and file (subject to Section 5(a) and the penultimate paragraph of this Section 5) with the Commission,
at the sole expense of the Issuers, a supplement or post-effective amendment to the Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, or file any other
required document so that, as thereafter delivered to the purchasers of the Registrable Notes being sold thereunder or to the purchasers of the Exchange Notes to whom such Prospectus will be delivered by a Participating Broker-Dealer, any such
Prospectus will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not
misleading. 
  
 (l) On or prior to the effective
date of the first Registration Statement relating to the Registrable Notes, (i) provide the Trustee with certificates for the Registrable Notes in a form eligible for deposit with The Depository Trust Company and (ii) provide a CUSIP number for the
Exchange Notes. 
  
 (m) In connection with any
underwritten offering of Registrable Notes pursuant to a Shelf Registration, enter into an underwriting agreement as is customary in underwritten offerings of debt securities similar to the Notes and take all such other actions as are reasonably
requested in writing by the managing underwriter or underwriters in order to expedite or facilitate the registration or the disposition of such Registrable Notes and, in such connection, (i) make such representations and warranties to, and covenants
with, the underwriters with respect to the business of the Issuers and their subsidiaries, as then conducted (including any acquired business, properties or entity, if applicable), and the Registration Statement, Prospectus and documents, if any,
incorporated or deemed to be incorporated by reference therein, in each case, as are customarily made by issuers to underwriters in underwritten offerings of debt securities similar to the Notes, and confirm the same in writing if and when
reasonably requested; (ii) use all commercially reasonable efforts to obtain the written opinions of counsel to the Issuers and written updates thereof in form, scope and substance reasonably satisfactory to the managing underwriter or underwriters,
addressed to the underwriters covering the matters customarily covered in opinions of counsel to issuers requested in underwritten offerings of debt securities similar to the Notes; (iii) use all commercially reasonable efforts to obtain “cold
comfort” letters and updates thereof in form, scope and substance reasonably satisfactory to the managing underwriter or underwriters from the independent certified public accountants of the Issuers (and, if necessary, any other independent
certified public accountants of any subsidiary of the Issuers or of any business acquired by the Issuers for which financial statements and financial data are, or are required to be, included or incorporated by reference in the Registration
Statement), addressed to each of the underwriters, such letters to be in customary form and covering matters of the type customarily covered in “cold comfort” letters in connection with underwritten offerings of debt securities similar to
the Notes; and (iv) if an underwriting agreement is entered into, the same shall contain indemnification provisions and procedures no less favorable than those set forth in Section 7 hereof (or such other provisions and procedures acceptable to
Holders of a majority in aggregate principal amount of Registrable Notes covered by such Registration Statement and the managing underwriter or underwriters or agents) with respect to all parties to be indemnified pursuant to said Section;
provided 
  

 -15- 

 that the Issuers shall not be required to provide indemnification to any underwriter selected in
accordance with the provisions of Section 9 hereof with respect to information relating to such underwriter furnished in writing to the Issuers by or on behalf of such underwriter expressly for inclusion in such Registration Statement. The above
shall be done at each closing under such underwriting agreement, or as and to the extent required thereunder. 
  
 (n) If (1) a Shelf Registration is filed pursuant to Section 3 hereof or (2) a Prospectus contained in the Exchange Offer Registration
Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, make available for inspection by any selling Holder
of such Registrable Notes being sold or each such Participating Broker-Dealer, as the case may be, any underwriter participating in any such disposition of Registrable Notes, if any, and any attorney, accountant or other agent retained by any such
selling Holder or each such Participating Broker-Dealer, as the case may be, or underwriter (collectively, the “Inspectors”), upon written request, at the offices where normally kept, during reasonable business hours, all pertinent
financial and other records, pertinent corporate documents and instruments of the Issuers and its subsidiaries (collectively, the “Records”) as shall be reasonably necessary to enable them to exercise any applicable due diligence
responsibilities, and cause the officers, directors and employees of the Issuers and their subsidiaries to supply all information reasonably requested in writing by any such Inspector in connection with such Registration Statement and Prospectus.
Each Inspector shall agree in writing that it will keep the Records confidential and that it will not disclose, or use in connection with any market transactions in violation of any applicable securities laws, any Records that the Issuers determine,
in good faith, to be confidential unless (i) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in such Registration Statement or Prospectus in the reasonable opinion of counsel for an Inspector, (ii) the
release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction, (iii) disclosure of such information is necessary or advisable in the opinion of counsel for an Inspector in connection with any action,
claim, suit or proceeding, directly or indirectly, involving or potentially involving such Inspector and arising out of, based upon, relating to, or involving this Agreement or the Purchase Agreement, or any transactions contemplated hereby or
thereby or arising hereunder or thereunder, or (iv) the information in such Records has been made generally available to the public other than as a result of a disclosure or failure to safeguard by such Inspector; provided, however,
that (i) each Inspector shall agree to use reasonable best efforts to provide notice to the Issuers of the potential disclosure of any information by such Inspector pursuant to clause (i), (ii) or (iii) of this sentence to permit the Issuers to
obtain a protective order (or waive the provisions of this paragraph (n)) and (ii) each such Inspector shall take such actions as are reasonably necessary to protect the confidentiality of such information (if practicable) to the extent such action
is otherwise not inconsistent with, an impairment of or in derogation of the rights and interests of the Holder or any Inspector. Each selling Holder of such Registrable Notes and each such Participating Broker-Dealer will be required to agree that
information obtained by it as a result of such inspections shall be deemed confidential and shall not be used by it as the basis for any market transactions in the securities of the Parent, the Issuers or their respective subsidiaries unless and
until such is made generally available to the public. 
  

 -16- 

 (o) Provide an indenture trustee for the Registrable Notes or the Exchange Notes, as the
case may be, and cause the Indenture or the trust indenture provided for in Section 2(a) hereof to be qualified under the TIA not later than the effective date of the Exchange Offer or the first Registration Statement relating to the Registrable
Notes; and in connection therewith, cooperate with the trustee under any such indenture and the Holders of the Registrable Notes or Exchange Notes, as applicable, to effect such changes to such indenture as may be required for such indenture to be
so qualified in accordance with the terms of the TIA; and execute, and use all commercially reasonable efforts to cause such trustee to execute, all documents as may be required to effect such changes, and all other forms and documents required to
be filed with the Commission to enable such indenture to be so qualified in a timely manner. 
  
 (p) Use all commercially reasonable efforts to comply with all applicable rules and regulations of the Commission and make generally
available to the Issuers’ securityholders earnings statements satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (which need not be audited) (or any similar rule promulgated under the Securities Act) no
later than 45 days after the end of any fiscal quarter (or 90 days after the end of any 12-month period if such period is a fiscal year) (i) commencing at the end of any fiscal quarter in which Registrable Notes or Exchange Notes are sold to
underwriters in a firm commitment or best efforts underwritten offering and (ii) if not sold to underwriters in such an offering, commencing on the first day of the first fiscal quarter of the Issuers after the effective date of a Registration
Statement, which statements shall cover said 12-month periods consistent with the requirements of Rule 158. 
  
 (q) Upon the request of a Holder, upon consummation of the Exchange Offer or a Private Exchange, use all commercially reasonable efforts
to obtain an opinion of counsel to the Issuers, in form and substance customary for such underwritten transactions, addressed to the Trustee for the benefit of all Holders of Registrable Notes participating in the Exchange Offer or the Private
Exchange, as the case may be, that the Exchange Notes or Private Exchange Notes, as the case may be, and the related indenture constitute legal, valid and binding obligations of the Issuers, enforceable against the Issuers in accordance with its
respective terms, subject to customary exceptions and qualifications. 
  
 (r) If the Exchange Offer or a Private Exchange is to be consummated, upon delivery of the Registrable Notes by Holders to the Issuers (or to such other Person as directed by the Issuers) in exchange for the Exchange
Notes or the Private Exchange Notes, as the case may be, mark, or cause to be marked, on such Registrable Notes that such Registrable Notes are being cancelled in exchange for the Exchange Notes or the Private Exchange Notes, as the case may be;
provided that in no event shall such Registrable Notes be marked as paid or otherwise satisfied. 
  
 (s) Cooperate with each seller of Registrable Notes covered by any Registration Statement and each underwriter, if any, participating in
the disposition of such Registrable Notes and their respective counsel in connection with any filings required to be made with the National Association of Securities Dealers, Inc. (the “NASD”). 
  

 -17- 

 (t) Use all commercially reasonable efforts to take all other steps reasonably necessary
or advisable to effect the registration of the Exchange Notes and/or Registrable Notes covered by a Registration Statement contemplated hereby. 
  
 The Issuers may require each seller of Registrable Notes or Exchange Notes as to which any registration is being effected to furnish to the Issuers such
information regarding such seller or Participating Broker-Dealer and the distribution of such Registrable Notes or Exchange Notes as the Issuers may, from time to time, reasonably request. The Issuers may exclude from such registration the
Registrable Notes of any seller or Participating Broker-Dealer so long as such seller or Participating Broker-Dealer fails to furnish such information within a reasonable time after receiving such request and in the event of such an exclusion, the
Issuers shall have no further obligation under this Agreement (including, without limitation, the obligations under Section 4) with respect to such seller or Participating Broker-Dealer or any subsequent Holder of such Registrable Notes. Each seller
or Participating Broker-Dealer as to which any Shelf Registration is being effected agrees to furnish promptly to the Issuers all information required to be disclosed in order to make any information previously furnished to the Issuers by such
seller not materially misleading. 
  
 If any such Registration
Statement refers to any Holder by name or otherwise as the holder of any securities of the Issuers, then such Holder shall have the right to require (i) the insertion therein of language, in form and substance reasonably satisfactory to such Holder,
to the effect that the holding by such Holder of such securities is not to be construed as a recommendation by such Holder of the investment quality of the securities covered thereby and that such holding does not imply that such Holder will assist
in meeting any future financial requirements of the Issuers, or (ii) in the event that such reference to such Holder by name or otherwise is not required by the Securities Act or any similar federal statute then in force, the deletion of the
reference to such Holder in any amendment or supplement to the applicable Registration Statement filed or prepared subsequent to the time that such reference ceases to be required. 
  
 Each Holder of Registrable Notes and each Participating Broker-Dealer agrees by acquisition of such Registrable Notes or
Exchange Notes that, upon actual receipt of any notice from the Issuers (x) of the happening of any event of the kind described in Section 5(c)(ii), 5(c)(iii), 5(c)(iv), or 5(c)(v) hereof, or (y) that the Board of Directors of the Issuers (the
“Board of Directors”) has resolved that the Issuers have a bona fide business purpose for doing so, then the Issuers may delay the filing or the effectiveness of the Exchange Offer Registration Statement or the Shelf
Registration Statement (if not then filed or effective, as applicable) and shall not be required to maintain the effectiveness thereof or amend or supplement the Exchange Offer Registration Statement or the Shelf Registration, in all cases, for a
period (a “Delay Period”) expiring upon the earlier to occur of (i) in the case of the immediately preceding clause (x), such Holder’s or Participating Broker-Dealer’s receipt of the copies of the supplemented or amended
Prospectus contemplated by Section 5(k) hereof or until it is advised in writing (the “Advice”) by the Issuers that the use of the applicable Prospectus may be resumed, and has received copies of any amendments or supplements
thereto or (ii) in the case of the immediately preceding clause (y), the date which is the earlier of (A) the date on which such business purpose ceases to interfere with the Issuers’ obligations to file or maintain the effectiveness of any
such Registration Statement pursuant to this Agreement or (B) 60 days after the Issuers notify the Holders of such good faith determination. There shall not be more than 60 days of Delay Periods during any 12 month 
  

 -18- 

 period. Each of the Effectiveness Period and the Applicable Period, if applicable, shall be extended by the number of
days during any Delay Period. Any Delay Period will not alter the obligations of the Issuers to pay Liquidated Damages under the circumstances set forth in Section 4 hereof (except as noted in Section 4). 
  
 In the event of any Delay Period pursuant to clause (y) of the preceding
paragraph, notice shall be given as soon as practicable after the Board of Directors makes such a determination of the need for a Delay Period and shall state, to the extent practicable, an estimate of the duration of such Delay Period and shall
advise the recipient thereof of the agreement of such Holder provided in the next succeeding sentence. Each Holder, by his acceptance of any Registrable Note, agrees that during any Delay Period, each Holder will discontinue disposition of such
Notes or Exchange Notes covered by such Registration Statement or Prospectus or Exchange Notes to be sold by such Holder or Participating Broker-Dealer, as the case may be. 
  
 Section 6. Registration Expenses 
  
 All fees and expenses incident to the performance of or compliance with this Agreement by the Issuers (other than any
underwriting discounts or commissions) shall be borne by the Issuers, whether or not the Exchange Offer Registration Statement or the Shelf Registration is filed or becomes effective or the Exchange Offer is consummated, including, without
limitation, (i) all registration and filing fees (including, without limitation, (A) fees with respect to filings required to be made with the NASD in connection with an underwritten offering and (B) fees and expenses of compliance with state
securities or Blue Sky laws (including, without limitation, reasonable fees and disbursements of counsel in connection with Blue Sky qualifications of the Registrable Notes or Exchange Notes and determination of the eligibility of the Registrable
Notes or Exchange Notes for investment under the laws of such jurisdictions (x) where the holders of Registrable Notes are located, in the case of an Exchange Offer, or (y) as provided in Section 5(h) hereof, in the case of a Shelf Registration or
in the case of Exchange Notes to be sold by a Participating Broker-Dealer during the Applicable Period)), (ii) printing expenses, including, without limitation, expenses of printing certificates for Registrable Notes or Exchange Notes in a form
eligible for deposit with The Depository Trust Company and of printing prospectuses if the printing of prospectuses is requested by the managing underwriter or underwriters, if any, or by the Holders of a majority in aggregate principal amount of
the Registrable Notes included in any Registration Statement or in respect of Exchange Notes to be sold by any Participating Broker-Dealer during the Applicable Period, as the case may be, (iii) messenger, telephone and delivery expenses, (iv) fees
and disbursements of counsel for the Issuers and reasonable fees and disbursements of one special counsel for all of the sellers of Registrable Notes (exclusive of any counsel retained pursuant to Section 7 hereof), (v) fees and disbursements of all
independent certified public accountants referred to in Section 5(m)(iii) hereof (including, without limitation, the expenses of any special audit and “cold comfort” letters required by or incident to such performance), (vi) Securities Act
liability insurance, if the Issuers desire such insurance, (vii) fees and expenses of all other Persons retained by the Issuers, (viii) internal expenses of the Issuers (including, without limitation, all salaries and expenses of officers and
employees of the Issuers performing legal or accounting duties), (ix) the expense of any annual audit, (x) the fees and expenses incurred in connection with the listing of the securities to be registered on any securities exchange, and the obtaining
of a rating of the securities, in each case, if applicable, and (xi) the expenses relating to printing, word 
  

 -19- 

 processing and distributing all Registration Statements, underwriting agreements, indentures and any other documents
necessary in order to comply with this Agreement. Notwithstanding the foregoing or anything to the contrary, each Holder shall pay all underwriting discounts and commissions of any underwriters with respect to any Registrable Notes sold by or on
behalf of it. 
  
 Section 7. Indemnification 
  
 (a) Each of the Issuers and the Guarantors, jointly and severally, agrees to
indemnify and hold harmless each Holder of Registrable Notes and each Participating Broker-Dealer selling Exchange Notes during the Applicable Period, each Person, if any, who controls any such Person within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act, the agents, employees, officers and directors of each Holder and each such Participating Broker-Dealer and the agents, employees, officers and directors of any such controlling Person (each, a
“Participant”) from and against any and all losses, liabilities, claims, damages and expenses (including, but not limited to, reasonable attorneys’ fees and any and all reasonable out-of-pocket expenses actually incurred in
investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, and any and all reasonable amounts paid in settlement of any claim or litigation (in the manner set forth in clause (c) below))
(collectively, “Losses”) to which they or any of them may become subject under the Securities Act, the Exchange Act or otherwise insofar as such Losses (or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in any Registration Statement (or any amendment thereto) or Prospectus (as amended or supplemented if the Issuers shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, or caused by, arising out of or based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading, provided that (i) the foregoing indemnity shall not be available to any Participant insofar as such Losses arise out of or are based upon any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with information relating to such Participant furnished to the Issuers in writing by or on behalf of such Participant expressly for use therein, and (ii) that the foregoing indemnity with respect to
any preliminary prospectus shall not inure to the benefit of any Participant from whom the Person asserting such Losses purchased Registrable Notes if (x) it is established in the related proceeding that such Participant failed to send or give a
copy of the Prospectus (as amended or supplemented if such amendment or supplement was furnished to such Participant prior to the written confirmation of such sale) to such Person with or prior to the written confirmation of such sale, if required
by applicable law, and (y) the untrue statement or omission or alleged untrue statement or omission was corrected in the Prospectus (as amended or supplemented if amended or supplemented as aforesaid). This indemnity agreement will be in addition to
any liability that the Issuers and Guarantors may otherwise have, including, but not limited to, liability under this Agreement. 
  
 (b) Each Participant agrees, severally and not jointly, to indemnify and hold harmless the Issuers, each Person, if any, who controls any of the Issuers
or the Guarantors within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act, and each of its agents, employees, officers and directors and the agents, employees, officers and directors of any such controlling Person
from and against any Losses to which they or any of them may become subject under the Securities Act, the Exchange Act or otherwise insofar as such Losses (or actions in respect 
  

 -20- 

 thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in
any Registration Statement (or any amendment thereto) or Prospectus (as amended or supplemented if the Issuers shall have furnished any amendments or supplements thereto) or any preliminary prospectus, or caused by, arising out of or based upon any
omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, in each case to the extent, but
only to the extent, that any such Loss arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with information relating to such Participant furnished in
writing to the Issuers by or on behalf of such Participant expressly for use therein. This indemnity agreement will be in addition to any liability that a Participant may otherwise have, including, but not limited to, liability under this Agreement.

  
 (c) Promptly after receipt by an indemnified party under
subsection 7(a) or 7(b) above of notice of the commencement of any action, suit or proceeding (collectively, an “action”), such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party
under such subsection, notify each party against whom indemnification is to be sought in writing of the commencement of such action (but the failure so to notify an indemnifying party shall not relieve such indemnifying party from any liability that
it may have under this Section 7 except to the extent that it has been prejudiced in any material respect by such failure). In case any such action is brought against any indemnified party, and it notifies an indemnifying party of the commencement
of such action, the indemnifying party will be entitled to participate in such action, and to the extent it may elect by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, to
assume the defense of such action with counsel reasonably satisfactory to such indemnified party. Notwithstanding the foregoing, the indemnified party or parties shall have the right to employ its or their own counsel in any such action, but the
reasonable fees and expenses of such counsel shall be at the expense of such indemnified party or parties unless (i) the employment of such counsel shall have been authorized in writing by the indemnifying parties in connection with the defense of
such action, (ii) the indemnifying parties shall not have employed counsel to take charge of the defense of such action within a reasonable time after notice of commencement of the action, or (iii) the named parties to such action (including any
impleaded parties) include such indemnified party and the indemnifying party or parties (or such indemnifying parties have assumed the defense of such action), and such indemnified party or parties shall have reasonably concluded, that there may be
defenses available to it or them that are different from or additional to those available to one or all of the indemnifying parties (in which case the indemnifying parties shall not have the right to direct the defense of such action on behalf of
the indemnified party or parties), in any of which events such reasonable fees and expenses of counsel shall be borne by the indemnifying parties. In no event shall the indemnifying party be liable for the fees and expenses of more than one counsel
(together with appropriate local counsel) at any time for all indemnified parties in connection with any one action or separate but substantially similar or related actions arising in the same jurisdiction out of the same general allegations or
circumstances. Any such separate firm for the Participants shall be designated in writing by Participants who sold a majority in interest of Registrable Notes sold by all such Participants and shall be reasonably acceptable to the Issuers and any
such separate firm for the Issuers, its affiliates, officers, directors, representatives, employees and agents and such control Person of the Issuers shall be designated in writing by the Issuers and shall be reasonably acceptable to the Holders. An
indemnifying party shall not be liable for any settlement of any claim or action effected 
  

 -21- 

 without its written consent, which consent may not be unreasonably withheld. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding. 
  
 (d) In order to provide for contribution in circumstances in which the indemnification provided for in this Section 7 is for
any reason held to be unavailable from the indemnifying party, or is insufficient to hold harmless a party indemnified under this Section 7, each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result
of such aggregate Losses (i) in such proportion as is appropriate to reflect the relative benefits received by each indemnifying party, on the one hand, and each indemnified party, on the other hand, from the sale of the Notes to the Initial
Purchasers or the resale of the Registrable Notes by such Holder, as applicable, or (ii) if such allocation is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of each indemnified party, on the one hand, and each indemnifying party, on the other hand, in connection with the statements or omissions that resulted in such Losses, as well as any other relevant equitable
considerations. The relative benefits received by the Issuers and the Guarantors, on the one hand, and each Participant, on the other hand, shall be deemed to be in the same proportion as (x) the total proceeds from the sale of the Notes to the
Initial Purchasers (net of discounts and commissions but before deducting expenses) received by the Issuers and the Guarantors are to (y) the total discount and commissions received by such Participant in connection with the sale of the Registrable
Notes. The relative fault of the parties shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information
supplied by an Issuer or any Guarantor or such Participant and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission or alleged statement or omission. 
  
 (e) The parties agree that it would not be just and equitable if contribution
pursuant to this Section 7 were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to above. Notwithstanding the provisions of this Section 7, (i) in no case
shall any Participant be required to contribute any amount in excess of the amount by which the total discount and commissions received by such Participant in connection with the sale of the Registrable Notes exceeds the amount of any damages that
such Participant has otherwise been required to pay by reason of any untrue or alleged untrue statement or omission or alleged omission and (ii) no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. Any party entitled to contribution will, promptly after receipt of notice of commencement of any action against such party in respect of
which a claim for contribution may be made against another party or parties under this Section 7, notify such party or parties from whom contribution may be sought, but the omission to so notify such party or parties shall not relieve the party or
parties from whom contribution may be sought from any obligation it or they may have under this Section 7 or otherwise, except to the extent that it has been prejudiced in any material respect by such failure; provided, however, that
no additional notice shall be required with respect to any 
  

 -22- 

 action for which notice has been given under this Section 7 for purposes of indemnification. Anything in this section to
the contrary notwithstanding, no party shall be liable for contribution with respect to any action or claim settled without its written consent, provided, however, that such written consent was not unreasonably withheld. 
  
 Section 8. Rules 144 and 144A 
  
 The Issuers covenant that they will file the reports required, if any, to be
filed by them under the Securities Act and the Exchange Act and the rules and regulations adopted by the Commission thereunder in a timely manner in accordance with the requirements of the Securities Act and the Exchange Act and, if at any time the
Issuers are not required to file such reports, they will, upon the request of any Holder or beneficial owner of Registrable Notes, make available such information necessary to permit sales pursuant to Rule 144A under the Securities Act. The Issuers
further covenant that for so long as any Registrable Notes remain outstanding they will take such further action as any Holder of Registrable Notes may reasonably request from time to time to enable such Holder to sell Registrable Notes without
registration under the Securities Act within the limitation of the exemptions provided by (a) Rule 144(k) and Rule 144A under the Securities Act, as such Rules may be amended from time to time, or (b) any similar rule or regulation hereafter adopted
by the Commission. 
  
 Section 9. Underwritten
Registrations 
  
 If any of the Registrable Notes covered by
any Shelf Registration are to be sold in an underwritten offering, the investment banker or investment bankers and manager or managers that will manage the offering will be selected by the Holders of a majority in aggregate principal amount of such
Registrable Notes included in such offering and shall be reasonably acceptable to the Issuers. 
  
 No Holder of Registrable Notes may participate in any underwritten registration hereunder if such Holder does not (a) agree to sell such Holder’s Registrable Notes on the basis provided in any underwriting
arrangements approved by the Persons entitled hereunder to approve such arrangements and (b) complete and execute all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such
underwriting arrangements. 
  
 Section 10. Submission to
Jurisdiction; Waiver of Jury Trial. No proceeding related to this Agreement or the transactions contemplated hereby may be commenced, prosecuted or continued in any court other than the courts of the State of New York located in the City and
County of New York or in the United States District Court for the Southern District of New York, which courts shall have jurisdiction over the adjudication of such matters, and the Issuers hereby consent to the jurisdiction of such courts and
personal service with respect thereto. The Issuers shall irrevocably appoint CT Corporation System as an authorized agent pursuant to Section 8(l) of the Purchase Agreement, as their authorized agent in the City and County of New York upon which
process may be served in any such suit or proceeding, and agrees that service of process upon such agent, and written notice of said service to each Issuer, by the person serving the same to the address provided in Section 12, shall be deemed in
every respect effective service of process upon each Issuer, as applicable, in such suit or proceeding. The Issuers and each Guarantor hereby waive all right to trial by jury in any proceeding (whether based upon contract, tort or otherwise) in any
way arising out of or relating to this Agreement. 
  

 -23- 

 The Issuers and each Guarantor agree that a final judgment in any such proceeding brought in any such court shall be
conclusive and binding upon the Issuers and each Guarantor and may be enforced in any other courts in the jurisdiction of which any Issuer or any Guarantor is or may be subject, by suit upon such judgment. 
  
 Section 11. Judgment Currency. In respect of any judgment or order
given or made for any amount due hereunder that is expressed and paid in a currency (the “judgment currency”) other than United States dollars, the Issuer and the Guarantors, as applicable, will indemnify each Initial Purchaser, and
the Initial Purchasers will indemnify the Issuers and the Guarantors, against any loss incurred by such Initial Purchaser as a result of any variation as between (i) the rate of exchange at which the United States dollar amount is converted into the
judgment currency for the purpose of such judgment or order and (ii) the spot rate of exchange in The City of New York at which such party on the date of payment of such judgment or order is able to purchase United States dollars with the amount of
the judgment currency actually received by such party. The foregoing indemnity shall constitute a separate and independent obligation of each of the Issuers and the Initial Purchasers and shall continue in full force and effect notwithstanding any
such judgment or order as aforesaid. The term “rate of exchange” shall include any premiums and costs of exchange payable in connection with the purchase of or conversion into United States dollars. 
  
 Section 12. Miscellaneous 
  
 (a) No Inconsistent Agreements. The Issuers have not, as of the date
hereof, and shall not have, after the date of this Agreement, entered into any agreement with respect to any of their securities that is inconsistent with the rights granted to the Holders of Registrable Notes in this Agreement or otherwise
conflicts with the provisions hereof. The rights granted to the Holders hereunder do not conflict with and are not inconsistent with, in any material respect, the rights granted to the holders of any of the Issuers’ other issued and outstanding
securities under any such agreements. The Issuers have not entered and will not enter into any agreement with respect to any of their securities which will grant to any Person piggy-back registration rights with respect to any Registration
Statement. 
  
 (b) Adjustments Affecting Registrable Notes.
The Issuers shall not, directly or indirectly, take any action with respect to the Registrable Notes as a class that would adversely affect the ability of the Holders of Registrable Notes to include such Registrable Notes in a registration
undertaken pursuant to this Agreement. 
  
 (c) Amendments and
Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given except pursuant to a written agreement duly signed and delivered by (I) the
Issuers and (II)(A) the Holders of not less than a majority in aggregate principal amount of the then outstanding Registrable Notes and (B) in circumstances that would adversely affect the Participating Broker-Dealers, the Participating
Broker-Dealers holding not less than a majority in aggregate principal amount of the Exchange Notes held by all Participating Broker-Dealers; provided, however, that Section 7 and this Section 10(c) may not be amended, modified or
supplemented except pursuant to a written agreement duly signed and delivered by the Issuers and each Holder and each Participating 

  

 -24- 

 
Broker-Dealer (including any Person who was a Holder or Participating Broker-Dealer of Registrable Notes or Exchange Notes, as the case may be, disposed of
pursuant to any Registration Statement) affected by any such amendment, modification, supplement or waiver. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to
the rights of Holders of Registrable Notes whose securities are being sold pursuant to a Registration Statement and that does not directly or indirectly affect, impair, limit or compromise the rights of other Holders of Registrable Notes may be
given by Holders of at least a majority in aggregate principal amount of the Registrable Notes being sold pursuant to such Registration Statement. 
  
 (d) Notices. All notices and other communications (including, without limitation, any notices or other communications to the Trustee) provided for
or permitted hereunder shall be made in writing by hand-delivery, registered first-class mail, next-day air courier or telecopier: 
  
 (i) if to a Holder of the Registrable Notes or any Participating Broker-Dealer, at the most current address of such Holder or
Participating Broker-Dealer, as the case may be, set forth on the records of the registrar under the Indenture. 
  
 (ii) if to the Issuers, at the address as follows: 
  
 MagnaChip Semiconductor, Ltd. 
 1 Hyangjeong-dong 
 hungduk-gu, 
 Cheongju-si, 361-725 
 Korea 
 Telephone: 82-2-3459-3073 
 Fax: 82-2-3459-3674 
 Attention: General Counsel 
  
 With a copy to: 
  
 Dechert LLP 
 4000 Bell Atlantic Tower 
 1717 Arch Street 
 Philadelphia, Pennsylvania 19103 
 Attention: Geraldine Sinatra, Fax: (215) 994-2222 
 and Sang Park, Fax: (212) 314-0061;

  
 (iii) if to the Initial Purchasers, at the
address as follows: 
  
 UBS Securities LLC

 677 Washington Boulevard 
 Stamford, CT 06901 
 Telephone: (203) 719-8384 
 Fax number: (212) 719-5499 
 Attention: High Yield Capital Markets 
  
 With a copy at such address to the attention of Legal Department, fax number (203) 719-6177 
  

 -25- 

 All such notices and communications shall be deemed to have been duly given: when delivered by hand, if
personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt is acknowledged by the recipient’s telecopier machine, if telecopied; and on the next Business Day, if timely delivered to an
air courier guaranteeing overnight delivery (if to a U.S. destination); and on the third Business Day, if timely delivered to an air courier guaranteeing three-day delivery (if to a non-U.S. destination). 
  
 Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the address and in the manner specified in such Indenture. 
  
 (e) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties
hereto, the Holders and the Participating Broker-Dealers; provided, however, that this Agreement shall not inure to the benefit of or be binding upon a successor or assign of a Holder unless and to the extent such successor or assign
holds Registrable Notes. 
  
 (f) Counterparts. This
Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

  
 (g) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the meaning hereof. 
  
 (h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK.

  
 (i) Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and
shall in no way be affected, impaired or invalidated, and the parties hereto shall use their best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable. 
  
 (j) Securities
Held by the Issuers or Its Affiliates. Whenever the consent or approval of Holders of a specified percentage of Registrable Notes is required hereunder, Registrable Notes held by the Issuers or any of its affiliates (as such term is defined in
Rule 405 under the Securities Act) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage. 
  

 -26- 

 (k) Third-Party Beneficiaries. Holders and beneficial owners of Registrable Notes and
Participating Broker-Dealers are intended third-party beneficiaries of this Agreement, and this Agreement may be enforced by such Persons. No other Person is intended to be, or shall be construed as, a third-party beneficiary of this Agreement.

  
 (l) Attorneys’ Fees. As between the parties to
this Agreement, in any action or proceeding brought to enforce any provision of this Agreement, or where any provision hereof is validly asserted as a defense, the successful party shall be entitled to recover reasonable attorneys’ fees
actually incurred in addition to its costs and expenses and any other available remedy. 
  
 (m) Entire Agreement. This Agreement, together with the Purchase Agreement and the Indenture, is intended by the parties as a final and exclusive statement of the agreement and understanding of the parties
hereto in respect of the subject matter contained herein and therein and any and all prior oral or written agreements, representations, or warranties, contracts, understandings, correspondence, conversations and memoranda between the Holders on the
one hand and the Issuers on the other, or between or among any agents, representatives, parents, subsidiaries, affiliates, predecessors in interest or successors in interest with respect to the subject matter hereof and thereof are merged herein and
replaced hereby. 
  

 -27- 

 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

  

			
	 MagnaChip Semiconductor S.A.

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 
	
	 MagnaChip Semiconductor Finance Company

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 
	
	 MagnaChip Semiconductor LLC

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 
	
	 MagnaChip Semiconductor, Inc.

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 
	
	 MagnaChip Semiconductor Ltd (United Kingdom)

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 
	
	 MagnaChip Semiconductor Inc. (Japan)

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 

			
	 MagnaChip Semiconductor Ltd. (Hong Kong)

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 
	
	 MagnaChip Semiconductor Ltd. (Taiwan)

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 
	
	 MagnaChip Semiconductor B.V. (Netherlands)

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 
	
	 MagnaChip Semiconductor, Ltd. (Korea)

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 
	
	 MagnaChip Semiconductor SA Holdings LLC

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 

			
	 UBS SECURITIES, LLC,

	 CITIGROUP GLOBAL MARKETS INC.

	 GOLDMAN, SACHS & CO.

	 J.P. MORGAN SECURITIES INC.

	 DEUTSCHE BANK SECURITIES INC.

	
	 By: UBS Securities LLC

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 
		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 

 Schedule I 
  

			
	 Subsidiary

	  	 Jurisdiction
 of Organization

	 MagnaChip Semiconductor SA Holdings LLC (USA)
	  	Delaware
	 MagnaChip Semiconductor, Inc. (USA)
	  	Delaware
	 MagnaChip Semiconductor Inc. (Japan)
	  	Japan
	 MagnaChip Semiconductor Ltd. (United Kingdom)
	  	United Kingdom
	 MagnaChip Semiconductor Ltd. (Hong Kong)
	  	Hong Kong
	 MagnaChip Semiconductor Ltd. (Taiwan)
	  	Taiwan
	 MagnaChip Semiconductor, Ltd. (Korea)
	  	Korea
	 MagnaChip Semiconductor B.V. (Netherlands)
	  	Netherlands
	 MagnaChip Semiconductor SA Holdings LLC (USA)
	  	DelawareIndenture Dated as of December 23, 2004

 Exhibit 4.5 
  

MAGNACHIP SEMICONDUCTOR S.A. 
  
 AND 
  
 MAGNACHIP SEMICONDUCTOR FINANCE COMPANY 
  
 as Issuers, 
  
 AND 
  
 EACH OF THE GUARANTORS PARTY HERETO 
  
 8% SENIOR SUBORDINATED NOTES DUE 2014 
  

  
 INDENTURE 
  
 Dated as of December 23, 2004 
  

  
 THE BANK OF NEW YORK 
  
 Trustee 
  

  
  

 CROSS-REFERENCE TABLE* 
  

			
	 Trust Indenture
 Act
Section

	  	Indenture Section

	 310(a)(1)
	  	7.10
	       (a)(2)
	  	7.10
	       (a)(3)
	  	N.A.
	       (a)(4)
	  	N.A.
	       (a)(5)
	  	7.10
	       (b)
	  	7.10
	       (c)
	  	N.A.
	 311(a)
	  	7.11
	       (b)
	  	7.11
	       (c)
	  	N.A.
	 312(a)
	  	2.05
	       (b)
	  	12.03
	       (c)
	  	12.03
	 313(a)
	  	7.06
	       (b)(1)
	  	10.03
	       (b)(2)
	  	7.06; 7.07
	       (c)
	  	7.06; 10.03;14.02
	       (d)
	  	7.06
	 314(a)
	  	4.03;12.02; 14.05
	       (b)
	  	10.02
	       (c)(1)
	  	12.04
	       (c)(2)
	  	12.04
	       (c)(3)
	  	N.A.
	       (d)
	  	10.03; 10.04; 10.05
	       (e)
	  	12.05
	       (f)
	  	N.A.
	 315(a)
	  	7.01
	       (b)
	  	7.05; 14.02
	       (c)
	  	7.01
	       (d)
	  	7.01
	       (e)
	  	6.11
	 316(a) (last sentence)
	  	2.09
	       (a)(1)(A)
	  	6.05
	       (a)(1)(B)
	  	6.04
	       (a)(2)
	  	N.A.
	       (b)
	  	6.07
	       (c)
	  	2.12
	 317(a)(1)
	  	6.08
	       (a)(2)
	  	6.09
	       (b)
	  	2.04
	 318(a)
	  	12.01
	       (b)
	  	N.A.
	       (c)
	  	14.01

  
 N.A. means not applicable.

	*	This Cross Reference Table is not part of the Indenture. 

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page

	ARTICLE 1.
	DEFINITIONS AND INCORPORATION
	BY REFERENCE
			
	 Section 1.01
	  	 Definitions.
	  	1
	 Section 1.02
	  	 Other Definitions.
	  	25
	 Section 1.03
	  	 Incorporation by Reference of Trust Indenture Act.
	  	25
	 Section 1.04
	  	 Rules of Construction.
	  	26
	
	ARTICLE 2.
	THE NOTES
			
	 Section 2.01
	  	 Form and Dating.
	  	26
	 Section 2.02
	  	 Execution and Authentication.
	  	27
	 Section 2.03
	  	 Registrar and Paying Agent.
	  	28
	 Section 2.04
	  	 Paying Agent to Hold Money in Trust.
	  	28
	 Section 2.05
	  	 Holder Lists.
	  	28
	 Section 2.06
	  	 Transfer and Exchange.
	  	29
	 Section 2.07
	  	 Replacement Notes.
	  	42
	 Section 2.08
	  	 Outstanding Notes.
	  	42
	 Section 2.09
	  	 Treasury Notes.
	  	42
	 Section 2.10
	  	 Temporary Notes.
	  	42
	 Section 2.11
	  	 Cancellation.
	  	43
	 Section 2.12
	  	 Defaulted Interest.
	  	43
	
	ARTICLE 3.
	REDEMPTION AND PREPAYMENT
			
	 Section 3.01
	  	 Notices to Trustee.
	  	43
	 Section 3.02
	  	 Selection of Notes to Be Redeemed or Purchased.
	  	43
	 Section 3.03
	  	 Notice of Redemption.
	  	44
	 Section 3.04
	  	 Effect of Notice of Redemption.
	  	44
	 Section 3.05
	  	 Deposit of Redemption or Purchase Price.
	  	45
	 Section 3.06
	  	 Notes Redeemed or Purchased in Part.
	  	45
	 Section 3.07
	  	 Optional Redemption.
	  	45
	 Section 3.08
	  	 Mandatory Redemption.
	  	46
	 Section 3.09
	  	 Offer to Purchase by Application of Excess Proceeds.
	  	46
	 Section 3.10
	  	 Redemption for Changes in Taxes
	  	48
	
	ARTICLE 4.
	COVENANTS
			
	 Section 4.01
	  	 Payment of Notes.
	  	48
	 Section 4.02
	  	 Maintenance of Office or Agency.
	  	49
	 Section 4.03
	  	 Reports.
	  	49
	 Section 4.04
	  	 Compliance Certificate.
	  	50
	 Section 4.05
	  	 Taxes.
	  	51
	 Section 4.06
	  	 Stay, Extension and Usury Laws.
	  	51
	 Section 4.07
	  	 Restricted Payments.
	  	51
	 Section 4.08
	  	 Dividend and Other Payment Restrictions Affecting Subsidiaries.
	  	54
	 Section 4.09
	  	 Incurrence of Indebtedness and Issuance of Preferred Stock.
	  	56

  

 i 

					
	 Section 4.10
	  	 Asset Sales.
	  	60
	 Section 4.11
	  	 Transactions with Affiliates.
	  	62
	 Section 4.12
	  	 Liens.
	  	63
	 Section 4.13
	  	 Business Activities.
	  	63
	 Section 4.14
	  	 Corporate Existence.
	  	64
	 Section 4.15
	  	 Offer to Repurchase Upon Change of Control.
	  	64
	 Section 4.16
	  	 Additional Amounts.
	  	65
	 Section 4.17
	  	 [Reserved]
	  	67
	 Section 4.18
	  	 [Reserved]
	  	67
	 Section 4.19
	  	 Restriction on Activities of Finance Company.
	  	67
	 Section 4.20
	  	 Payments for Consent.
	  	67
	 Section 4.21
	  	 Additional Note Guarantees.
	  	68
	 Section 4.22
	  	 Designation of Restricted and Unrestricted Subsidiaries.
	  	68
	 Section 4.23
	  	 No Layering of Debt.
	  	69
	
	ARTICLE 5.
	SUCCESSORS
			
	 Section 5.01
	  	 Merger, Consolidation, or Sale of Assets.
	  	69
	 Section 5.02
	  	 Successor Corporation Substituted.
	  	70
	
	ARTICLE 6.
	DEFAULTS AND REMEDIES
			
	 Section 6.01
	  	 Events of Default.
	  	71
	 Section 6.02
	  	 Acceleration.
	  	72
	 Section 6.03
	  	 Other Remedies.
	  	72
	 Section 6.04
	  	 Waiver of Past Defaults.
	  	72
	 Section 6.05
	  	 Control by Majority.
	  	73
	 Section 6.06
	  	 Limitation on Suits.
	  	73
	 Section 6.07
	  	 Rights of Holders of Notes to Receive Payment.
	  	73
	 Section 6.08
	  	 Collection Suit by Trustee.
	  	74
	 Section 6.09
	  	 Trustee May File Proofs of Claim.
	  	74
	 Section 6.10
	  	 Priorities.
	  	74
	 Section 6.11
	  	 Undertaking for Costs.
	  	75
	
	ARTICLE 7.
	TRUSTEE
			
	 Section 7.01
	  	 Duties of Trustee.
	  	75
	 Section 7.02
	  	 Rights of Trustee.
	  	76
	 Section 7.03
	  	 Individual Rights of Trustee.
	  	77
	 Section 7.04
	  	 Trustee’s Disclaimer.
	  	77
	 Section 7.05
	  	 Notice of Defaults.
	  	78
	 Section 7.06
	  	 Reports by Trustee to Holders of the Notes.
	  	78
	 Section 7.07
	  	 Compensation and Indemnity.
	  	78
	 Section 7.08
	  	 Replacement of Trustee.
	  	79
	 Section 7.09
	  	 Successor Trustee by Merger, etc.
	  	80
	 Section 7.10
	  	 Eligibility; Disqualification.
	  	80
	 Section 7.11
	  	 Preferential Collection of Claims Against Issuers.
	  	80
	 Section 7.12
	  	 Conflicting Interests
	  	80

  

 ii 

					
	ARTICLE 8.
	LEGAL DEFEASANCE AND COVENANT DEFEASANCE
			
	 Section 8.01
	  	 Option to Effect Legal Defeasance or Covenant Defeasance.
	  	81
	 Section 8.02
	  	 Legal Defeasance and Discharge.
	  	81
	 Section 8.03
	  	 Covenant Defeasance.
	  	81
	 Section 8.04
	  	 Conditions to Legal or Covenant Defeasance.
	  	82
	 Section 8.05
	  	 Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions.
	  	83
	 Section 8.06
	  	 Repayment to the Issuers.
	  	83
	 Section 8.07
	  	 Reinstatement.
	  	84
	
	ARTICLE 9.
	AMENDMENT, SUPPLEMENT AND WAIVER
			
	 Section 9.01
	  	 Without Consent of Holders of Notes.
	  	84
	 Section 9.02
	  	 With Consent of Holders of Notes.
	  	85
	 Section 9.03
	  	 Compliance with Trust Indenture Act.
	  	86
	 Section 9.04
	  	 Revocation and Effect of Consents.
	  	86
	 Section 9.05
	  	 Notation on or Exchange of Notes.
	  	87
	 Section 9.06
	  	 Trustee to Sign Amendments, etc.
	  	87
	
	ARTICLE 10.
	SUBORDINATION
			
	 Section 10.01
	  	 Agreement to Subordinate.
	  	87
	 Section 10.02
	  	 Liquidation; Dissolution; Bankruptcy.
	  	87
	 Section 10.03
	  	 Default on Designated Senior Debt.
	  	88
	 Section 10.04
	  	 Acceleration of Notes.
	  	88
	 Section 10.05
	  	 When Distribution Must Be Paid Over.
	  	88
	 Section 10.06
	  	 Notice by Issuers.
	  	89
	 Section 10.07
	  	 Subrogation.
	  	89
	 Section 10.08
	  	 Relative Rights.
	  	89
	 Section 10.09
	  	 Subordination May Not Be Impaired by Company.
	  	90
	 Section 10.10
	  	 Distribution or Notice to Representative.
	  	90
	 Section 10.11
	  	 Rights of Trustee and Paying Agent.
	  	90
	 Section 10.12
	  	 Authorization to Effect Subordination.
	  	90
	 Section 10.13
	  	 Amendments.
	  	91
	
	ARTICLE 11.
	SATISFACTION AND DISCHARGE
			
	 Section 11.01
	  	 Satisfaction and Discharge.
	  	91
	 Section 11.02
	  	 Application of Trust Money.
	  	92
	
	ARTICLE 12.
	NOTE GUARANTEES
			
	 Section 12.01
	  	 Guarantee.
	  	92
	 Section 12.02
	  	 Limitation on Guarantor Liability.
	  	93
	 Section 12.03
	  	 Execution and Delivery of Note Guarantee.
	  	94
	 Section 12.04
	  	 Guarantors May Consolidate, etc., on Certain Terms.
	  	94
	 Section 12.05
	  	 Releases.
	  	95
	
	ARTICLE 13.
	[Reserved]

  

 iii 

					
	ARTICLE 14.
	MISCELLANEOUS
			
	 Section 14.01
	  	 Trust Indenture Act Controls.
	  	95
	 Section 14.02
	  	 Notices.
	  	95
	 Section 14.03
	  	 Communication by Holders of Notes with Other Holders of Notes.
	  	97
	 Section 14.04
	  	 Certificate and Opinion as to Conditions Precedent.
	  	97
	 Section 14.05
	  	 Statements Required in Certificate or Opinion.
	  	97
	 Section 14.06
	  	 Rules by Trustee and Agents.
	  	97
	 Section 14.07
	  	 No Personal Liability of Directors, Officers, Employees and Stockholders.
	  	97
	 Section 14.08
	  	 Governing Law; Jurisdiction.
	  	98
	 Section 14.09
	  	 No Adverse Interpretation of Other Agreements.
	  	98
	 Section 14.10
	  	 Successors.
	  	98
	 Section 14.11
	  	 Severability.
	  	98
	 Section 14.12
	  	 Counterpart Originals.
	  	98
	 Section 14.13
	  	 Table of Contents, Headings, etc.
	  	99

  
 EXHIBITS 
  

			
	 Exhibit A1
	  	 FORM OF NOTE

	 Exhibit A2
	  	 FORM OF REGULATION S TEMPORARY GLOBAL NOTE

	 Exhibit B
	  	 RESERVED

	 Exhibit C
	  	 FORM OF CERTIFICATE OF TRANSFER

	 Exhibit D
	  	 FORM OF CERTIFICATE OF EXCHANGE

	 Exhibit E
	  	 FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR

	 Exhibit E
	  	 FORM OF NOTATION OF GUARANTEE

	 Exhibit F
	  	 FORM OF SUPPLEMENTAL INDENTURE

  

 iv 

 INDENTURE dated as of December 23, 2004 among MAGNACHIP SEMICONDUCTOR S.A., a Luxembourg public limited
liability company (societe anonyme) (“MagnaChip”), MAGNACHIP SEMICONDUCTOR FINANCE COMPANY, a Delaware corporation (“Finance Company,” and together with MagnaChip, the “Issuers”), the
Guarantors (as defined), and THE BANK OF NEW YORK, as trustee (the “Trustee”). 
  
 The Issuers, the Guarantors and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders (as
defined) of the Issuers’ 8% Senior Subordinated Notes due 2014 (the “Notes”): 
  
 ARTICLE 1. 
 DEFINITIONS AND INCORPORATION 
 BY REFERENCE 
  
 Section 1.01 Definitions. 
  
 “144A Global Note” means a Global Note substantially in the form of Exhibit A1 hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of, and registered in the name of, the
Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount of the Notes, sold in reliance on Rule 144A. 
  
 “Acquired Debt” means, with respect to any specified Person: 
  
 (1) Indebtedness of any other Person existing at the time such other Person is merged with or into or became
a Subsidiary of such specified Person, whether or not such Indebtedness is incurred in connection with, or in contemplation of, such other Person merging with or into, or becoming a Restricted Subsidiary of, such specified Person; provided
that Indebtedness of such Person that is redeemed, defeased, retired or otherwise repaid at the time, or immediately upon consummation, of the transaction by which such other Person is merged with or into or became a Restricted Subsidiary of such
Person shall not be Acquired Debt; and 
  
 (2)
Indebtedness secured by a Lien encumbering any asset acquired by such specified Person; provided that the amount of such Indebtedness shall be deemed to be the lesser of the value of such asset and the amount of the obligation so secured.

  
 “Acquisition” means the purchase of the
Systems IC division from Hynix Semiconductor Inc. 
  
 “Additional Notes” means additional Notes (other than the Initial Notes) issued under this Indenture in accordance with Sections 2.02 and 4.09 hereof, as part of the same series as the Initial Notes. 
  
 “Advisory Agreements” means the advisory agreements dated as
of October 6, 2004, by and between US LLC, MagnaChip and each of (i) Francisco Partners Management, LLC, (ii) CVC Management LLC and (iii) CVC Capital Partners Asia Limited, as each may be amended, supplemented, modified, renewed, extended or
replaced from time to time. 
  
 “Affiliate” of
any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control,” as used with respect to any
Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise; provided that
beneficial ownership of 10% or more of the Voting Stock of a Person will be deemed to be control. For purposes of this definition, the terms “controlling,” “controlled by” and “under common control with” have
correlative meanings. 
  

 1 

 “Agent” means any Registrar or Paying Agent. 
  
 “Applicable Premium” means, with respect to any Note on any
redemption date, the greater of: 
  
 (1) 1.0% of
the principal amount of the Note; or 
  
 (2) the
excess of: 
  
 (a) the present value at the
redemption date of (i) the redemption price of the Note at December 15, 2009, (such redemption price being set forth in the table appearing in Section 3.07 hereof) plus (ii) all required interest payments due on the Note through December 15, 2009,
(excluding accrued but unpaid interest to the applicable redemption date), computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over 
  
 (b) the principal amount of the Note, if greater. 
  
 “Applicable Procedures” means, with respect to any transfer
or exchange of or for beneficial interests in any Global Note, the rules and procedures of the Depositary, Euroclear and Clearstream that apply to such transfer or exchange. 
  
 “Asset Sale” means: 
  
 (1) the sale, lease, conveyance or other disposition of any assets or rights; provided that the sale,
lease, conveyance or other disposition of all or substantially all of the assets of MagnaChip and its Restricted Subsidiaries taken as a whole will be governed by the provisions of Section 4.15 hereof and/or the provisions of Section 5.01 hereof and
not by the provisions of Section 4.10 hereof; and 
  
 (2) the issuance or sale of Equity Interests in any of MagnaChip’s Subsidiaries, other than directors’ qualifying shares or shares required by applicable law to be held by a Person other than MagnaChip or a Restricted Subsidiary.

  
 Notwithstanding the preceding, none of the following items will be deemed to
be an Asset Sale: 
  
 (1) any single transaction
or series of related transactions that involves assets having a Fair Market Value of less than $2.5 million; 
  
 (2) a transfer of assets between or among MagnaChip and its Restricted Subsidiaries (including to a Person that becomes a Restricted
Subsidiary upon such transfer); 
  
 (3) an
issuance of Equity Interests by a Restricted Subsidiary of MagnaChip to MagnaChip or to a Restricted Subsidiary of MagnaChip; 
  
 (4) the sale, lease, conveyance or other disposition of products, inventory, services or accounts receivable in the ordinary course of
business and any sale or other disposition of damaged, worn-out, uneconomical, surplus or obsolete assets in the ordinary course of business; 
  
 (5) the sale or other disposition of cash or Cash Equivalents; 
  

 2 

 (6) a Restricted Payment that does not violate Section 4.07 hereof or a Permitted
Investment; 
  
 (7) Permitted Liens; and

  
 (8) grants of licenses in intellectual
property on terms customary for the semiconductor industry. 
  
 “Bankruptcy Law” means Title 11, U.S. Code or any similar foreign, federal or state law for the relief of debtors. 
  
 “Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act. The terms
“Beneficially Owns” and “Beneficially Owned” have a corresponding meaning. 
  
 “Board of Directors” means: 
  
 (1) with respect to a corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board; 
  
 (2) with respect to a partnership, the Board of Directors of the general partner of the partnership;

  
 (3) with respect to a limited liability
company, the managing member or members or any controlling committee of managing members thereof; and 
  
 (4) with respect to any other Person, the board or committee of such Person serving a similar function. 
  
 “Broker-Dealer” means a broker or dealer registered under
the Exchange Act. 
  
 “Business Day” means any
day other than a Legal Holiday. 
  
 “Capital Lease
Obligation” means, at the time any determination is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized on a balance sheet prepared in accordance with GAAP, and the
Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be prepaid by the lessee without payment of a penalty. 
  
 “Capital Stock” means: 
  
 (1) in the case of a corporation, corporate stock;

  
 (2) in the case of an association or business
entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock; 
  
 (3) in the case of a partnership or limited liability company, partnership interests (whether general or limited) or membership interests;
and 
  
 (4) any other interest or participation
that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person, but excluding from all of the foregoing any debt securities convertible into Capital Stock, whether or not such
debt securities include any right of participation with Capital Stock. 
  

 3 

 “Cash Equivalents” means: 
  
 (1) United States dollars, Korean Won, Pound Sterling, Hong Kong Dollars, New Taiwan dollars, Euros and
Japanese Yen; 
  
 (2) securities issued or
directly and fully guaranteed or insured by the United States government, Korean government, EU member states with a sovereign credit rating of A or better, the Japanese government, the Taiwan government, the Hong Kong government, or any agency or
instrumentality of any such government (provided that the full faith and credit of any such government is pledged in support of those securities) having maturities of not more than one year from the date of acquisition; 
  
 (3) United States dollar denominated and Korean Won
denominated certificates of deposit, eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers’ acceptances with maturities not exceeding one year and overnight bank deposits, in each case, with any
lender party to the Senior Credit Agreement or with any domestic commercial bank having capital and surplus in excess of $500.0 million and a Thomson Bank Watch Rating of “B” or better or a comparable rating by a comparable rating agency
in the relevant jurisdiction if a Moody’s or S&P rating is unavailable; 
  
 (4) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (2) and (3)
above entered into with any financial institution meeting the qualifications specified in clause (3) above; 
  
 (5) commercial paper having one of the two highest ratings obtainable from Moody’s or one of the three highest ratings attainable
from S&P or a comparable rating by a comparable rating agency in the relevant jurisdiction if a Moody’s or S&P rating is unavailable and, in each case, maturing within one year after the date of acquisition; and 
  
 (6) money market funds at least 95% of the assets of which
constitute Cash Equivalents of the kinds described in clauses (1) through (5) of this definition. 
  
 “Change of Control” means the occurrence of any of the following: 
  
 (1) the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of US LLC and its Subsidiaries taken as a whole to any “person” (as that term is used in Section 13(d) of the
Exchange Act) other than a Principal or a Related Party of a Principal; 
  
 (2) the adoption of a plan relating to the liquidation or dissolution of MagnaChip; 
  
 (3) the consummation of any transaction (including, without limitation, any merger or consolidation), the result of which is that any
“person” (as defined above), other than the Principals and their Related Parties, becomes the Beneficial Owner, directly or indirectly, of more than 50% of the Voting Stock of MagnaChip, measured by voting power rather than number of
shares; or 
  

 4 

 (4) after an initial public offering of MagnaChip or any direct or indirect parent of
MagnaChip, the first day on which a majority of the members of the Board of Directors of such public company are not Continuing Directors. 
  
 “Clearstream” means Clearstream Banking, S.A. 
  
 “Consolidated Cash Flow” means, with respect to any specified Person for any period, the Consolidated Net Income of such Person for such
period plus, without duplication: 
  
 (1)
an amount equal to any extraordinary loss plus any net loss realized by such Person or any of its Restricted Subsidiaries in connection with an Asset Sale, to the extent such losses were deducted in computing such Consolidated Net Income;
plus 
  
 (2) provision for taxes based on
income or profits of such Person and its Restricted Subsidiaries for such period, to the extent that such provision for taxes was deducted in computing such Consolidated Net Income; plus 
  
 (3) the Fixed Charges of such Person and its Restricted
Subsidiaries for such period, to the extent that such Fixed Charges were deducted in computing such Consolidated Net Income; plus 
  
 (4) depreciation, amortization (including amortization of intangibles but excluding amortization of prepaid cash expenses that were paid
in a prior period) and other non-cash expenses (excluding any such non-cash expense to the extent that it represents an accrual of or reserve for cash expenses in any future period or amortization of a prepaid cash expense that was paid in a prior
period) of such Person and its Restricted Subsidiaries for such period to the extent that such depreciation, amortization and other non-cash expenses were deducted in computing such Consolidated Net Income; plus 
  
 (5) other expenses incurred in connection with the
Acquisition on or prior to the Issue Date; minus 
  
 (6) non-cash items increasing such Consolidated Net Income for such period, other than the accrual of revenue in the ordinary course of business, 
  
 in each case, on a consolidated basis and determined in accordance with GAAP. 
  
 Notwithstanding the preceding, the provision for taxes based on the income or profits of, and the depreciation and amortization and other
non-cash expenses of, a Restricted Subsidiary of MagnaChip will be added to Consolidated Net Income to compute Consolidated Cash Flow of MagnaChip only to the extent that a corresponding amount would be permitted at the date of determination to be
dividended to MagnaChip by such Restricted Subsidiary without prior governmental approval (that has not been obtained), and without direct or indirect restriction pursuant to the terms of its charter and all agreements, instruments, judgments,
decrees, orders, statutes, rules and governmental regulations applicable to that Restricted Subsidiary or its stockholders. 
  
 “Consolidated Net Income” means, with respect to any specified Person for any period, the aggregate of the Net Income of such Person and
its Restricted Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP; provided that: 
  
 (1) the Net Income (but not loss) of any Person that is not a Restricted Subsidiary or that is accounted for by the equity method of
accounting will be included only to the extent of the amount of dividends or similar distributions paid in cash to the specified Person or a Restricted Subsidiary of the Person; 
  

 5 

 (2) the Net Income of any Restricted Subsidiary will be excluded to the extent that the
declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or
indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders, except to the extent that any dividend
or similar distribution is actually and lawfully made and not otherwise included in Consolidated Net Income of such Person; 
  
 (3) the cumulative effect of a change in accounting principles will be excluded; 
  
 (4) any expenses associated with the Acquisition and the
transactions contemplated thereby will be excluded; 
  
 (5) any transaction gains and losses due to fluctuations in currency values and the related tax effect will be excluded; and 
  
 (6) notwithstanding clause (1) above, the Net Income of any Unrestricted Subsidiary will be excluded, whether or not distributed to the
specified Person or one of its Subsidiaries. 
  
 “Continuing Directors” means, as of any date of determination, any member of the Board of Directors of such Person who: 
  
 (1) was a member of such Board of Directors on the Issue Date; 
  
 (2) was nominated for election or elected to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board of Directors at the time of such nomination or election; or 
  
 (3) was elected to the Board of Directors under the Securityholders’ Agreement. 
  
 “Corporate Trust Office of the Trustee” means the office of
the Trustee at which at any particular time its corporate trust business shall be principally administered, which office as of the date of this instrument is located at 101 Barclay Street, 8W, New York, New York 10286; Attention: Corporate Trust
Division - Corporate Finance Unit, or such other address as the Trustee may designate from time to time by notice to the Holders and the Issuers. 
  
 “Credit Agreement Agent” means, at any time, the Person serving at such time as the “Agent” or “Administrative Agent”
under the Senior Credit Agreement or any other representative then most recently designated in accordance with the applicable provisions of the Senior Credit Agreement, together with its successors in such capacity. 
  
 “Credit Facilities” means, one or more debt facilities
(including, without limitation, the Senior Credit Agreement) or commercial paper facilities, in each case, with banks or other institutional lenders providing for revolving credit loans, term loans, receivables financing (including through the sale
of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or letters of credit, in each case, as amended, restated, modified, renewed, refunded, replaced (whether upon or after
termination or otherwise) or refinanced (including by means of sales of debt securities to institutional investors) in whole or in part from time to time. 
  

 6 

 “Custodian” means the Trustee, as custodian with respect to the Notes in global form, or
any successor entity thereto. 
  
 “Default” means
any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default. 
  
 “Definitive Note” means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 2.06
hereof, substantially in the form of Exhibit A1 hereto except that such Note shall not bear the Global Note Legend and shall not have the “Schedule of Exchanges of Interests in the Global Note” attached thereto. 
  
 “Depositary” means, with respect to the Notes issuable or
issued in whole or in part in global form, the Person specified in Section 2.03 hereof as the Depositary with respect to the Notes, and any and all successors thereto appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture. 
  
 “Designated
Senior Debt” means: 
  
 (1) Indebtedness
outstanding under the Credit Facilities; and 
  
 (2) after payment in full of all Obligations under the Senior Credit Agreement, any other Senior Debt permitted under this Indenture the principal amount of which is $25.0 million or more and that has been designated by the Issuers as
“Designated Senior Debt.” 
  
 “Disqualified
Stock” means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case, at the option of the holder of the Capital Stock), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder of the Capital Stock, in whole or in part, on or prior to the date that is 91 days after the date on which the
Notes mature. Notwithstanding the preceding sentence, any Capital Stock that would constitute Disqualified Stock solely because the holders of the Capital Stock have the right to require MagnaChip to repurchase such Capital Stock upon the occurrence
of a change of control or an asset sale will not constitute Disqualified Stock if the terms of such Capital Stock provide that MagnaChip may not repurchase or redeem any such Capital Stock pursuant to such provisions unless such repurchase or
redemption complies with Section 4.07 hereof. The amount of Disqualified Stock deemed to be outstanding at any time for purposes of this Indenture will be the maximum amount that MagnaChip and its Restricted Subsidiaries may become obligated to pay
upon the maturity of, or pursuant to any mandatory redemption provisions of, such Disqualified Stock, exclusive of accrued dividends. 
  
 “Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt
security that is convertible into, or exchangeable for, Capital Stock). 
  
 “Euroclear” means Euroclear Bank, S.A./N.V., as operator of the Euroclear system. 
  
 “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
  
 “Exchange Notes” means the Notes issued in the Exchange Offer pursuant to Section 2.06(f) hereof.

  
 “Exchange Offer” has the meaning set forth in
the Registration Rights Agreement. 
  

 7 

 “Exchange Offer Registration Statement” has the meaning set forth in the Registration
Rights Agreement. 
  
 “Existing Indebtedness”
means Indebtedness of US LLC and its Subsidiaries (other than Indebtedness under the Senior Credit Agreement) in existence on the Issue Date, until such amounts are repaid. 
  
 “Fair Market Value” means the value that would be paid by a willing buyer to an unaffiliated willing
seller, determined in good faith by the Board of Directors of MagnaChip (unless otherwise provided in this Indenture). 
  
 “Fixed Charge Coverage Ratio” means with respect to any specified Person and its Restricted Subsidiaries for any period, the ratio of the
Consolidated Cash Flow of such Person and its Restricted Subsidiaries for such period to the Fixed Charges of such Person and its Restricted Subsidiaries for such period. In the event that the specified Person or any of its Restricted Subsidiaries
incurs, assumes, Guarantees, repays, repurchases, redeems, defeases or otherwise discharges any Indebtedness (other than ordinary working capital borrowings) or issues, repurchases or redeems preferred stock subsequent to the commencement of the
period for which the Fixed Charge Coverage Ratio is being calculated and on or prior to the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “Calculation Date”), then the Fixed Charge
Coverage Ratio will be calculated giving pro forma effect to such incurrence, assumption, Guarantee, repayment, repurchase, redemption, defeasance or other discharge of Indebtedness, or such issuance, repurchase or redemption of preferred stock, and
the use of the proceeds therefrom, as if the same had occurred at the beginning of the applicable four-quarter reference period. 
  
 In addition, for purposes of calculating the Fixed Charge Coverage Ratio: 
  
 (1) acquisitions that have been made by the specified Person or any of its Restricted Subsidiaries, including through mergers or
consolidations, or any Person or any of its Restricted Subsidiaries acquired by the specified Person or any of its Restricted Subsidiaries, and including any related financing transactions and including increases in ownership of Restricted
Subsidiaries, during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date will be given pro forma effect (in accordance with Regulation S-X under the Securities Act) as if they had occurred
on the first day of the four-quarter reference period. 
  
 (2) the Consolidated Cash Flow attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses (and ownership interests therein) disposed of prior to the Calculation Date, will be excluded;

  
 (3) the Fixed Charges attributable to
discontinued operations, as determined in accordance with GAAP, and operations or businesses (and ownership interests therein) disposed of prior to the Calculation Date, will be excluded, but only to the extent that the obligations giving rise to
such Fixed Charges will not be obligations of the specified Person or any of its Restricted Subsidiaries following the Calculation Date; 
  
 (4) any Person that is a Restricted Subsidiary on the Calculation Date or that becomes a Restricted Subsidiary on the Calculation Date
will be deemed to have been a Restricted Subsidiary at all times during such four-quarter period; 
  

 8 

 (5) any Person that is not a Restricted Subsidiary on the Calculation Date or would cease
to be a Restricted Subsidiary on the Calculation Date will be deemed not to have been a Restricted Subsidiary at any time during such four-quarter period; and 
  

(6) if any Indebtedness bears a floating rate of interest, the interest expense on such Indebtedness will be calculated as if the rate
in effect on the Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligation applicable to such Indebtedness if such Hedging Obligation has a remaining term as at the Calculation Date in excess of
12 months). 
  
 “Fixed Charges” means, with
respect to any specified Person for any period, the sum, without duplication, of: 
  
 (1) the consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued, including,
without limitation, amortization of original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, commissions,
discounts and other fees and charges incurred in respect of letter of credit or bankers’ acceptance financings, and net of the effect of all payments made or received pursuant to Hedging Obligations in respect of interest rates; plus

  
 (2) the consolidated interest expense of such
Person and its Restricted Subsidiaries that was capitalized during such period; plus 
  
 (3) any interest on Indebtedness of another Person that is guaranteed by such Person or one of its Restricted Subsidiaries or secured by a
Lien on assets of such Person or one of its Restricted Subsidiaries, whether or not such Guarantee or Lien is called upon; plus 
  
 (4) the product of (a) all dividends, whether paid or accrued and whether or not in cash, on any series of preferred stock of such Person
or any of its Restricted Subsidiaries, other than dividends on Equity Interests payable solely in Equity Interests of MagnaChip (other than Disqualified Stock) or to MagnaChip or a Restricted Subsidiary of MagnaChip, times (b) a fraction, the
numerator of which is one and the denominator of which is one minus the then current combined federal, state and local statutory tax rate of such Person, expressed as a decimal, in each case, determined on a consolidated basis in accordance with
GAAP. 
  
 “GAAP” means generally accepted
accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such
other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect on the Issue Date. 
  
 “Global Note Legend” means the legend set forth in Section 2.06(g)(2) hereof, which is required to be placed on all Global Notes issued
under this Indenture. 
  
 “Global Notes” means,
individually and collectively, each of the Restricted Global Notes and the Unrestricted Global Notes deposited with or on behalf of and registered in the name of the Depository or its nominee, substantially in the form of Exhibit A1 hereto and that
bears the Global Note Legend and that has the “Schedule of Exchanges of Interests in the Global Note” attached thereto, issued in accordance with Section 2.01, 2.06(b)(3), 2.06(b)(4), 2.06(d)(2) or 2.06(f) hereof. 
  

 9 

 “Government Securities” means securities that are 
  
 (1) direct obligations of the United States of America for
the timely payment of which its full faith and credit is pledged, or 
  
 (2) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the timely payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, 
  
 which, in either case, are not
callable or redeemable at the option of the issuers thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act), as custodian with respect to any such Government Securities or a
specific payment of principal of or interest on any such Government Securities held by such custodian for the account of the holder of such depository receipt; provided that (except as required by law) such custodian is not authorized to make
any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the Government Securities or the specific payment of principal of or interest on the Government Securities
evidenced by such depository receipt. 
  
 “Governmental
Authority” shall mean the government of the United States of America or any other nation, or of any political subdivision thereof, whether state, provincial or local, and any agency, authority, instrumentality, regulatory body, court
central bank or other entity exercising executive, legislative, judicial taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central
Bank). 
  
 “Guarantee” means a guarantee other
than by endorsement of negotiable instruments for collection in the ordinary course of business, direct or indirect, in any manner including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements
in respect thereof, of all or any part of any Indebtedness (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take or pay or to maintain financial statement
conditions or otherwise). 
  
 “Guarantors” means
each of: 
  
 (1) MagnaChip Semiconductor LLC
(USA), MagnaChip Semiconductor, Inc. (USA), MagnaChip Semiconductor B.V. (Netherlands), MagnaChip Semiconductor SA Holdings LLC (USA), MagnaChip Semiconductor Ltd. (UK), MagnaChip Semiconductor Inc. (Japan), MagnaChip Semiconductor Ltd. (Hong Kong)
and MagnaChip Semiconductor Ltd. (Taiwan); and 
  
 (2) any other Subsidiary of MagnaChip that executes a Note Guarantee in accordance with the provisions of this Indenture, 
  
 and their respective successors and assigns, in each case, until the Note Guarantee of such Person has been released in accordance with the provisions of this Indenture.

  
 “Hedging Obligations” means, with respect to
any specified Person, the obligations of such Person under: 
  
 (1) interest rate swap agreements (whether from fixed to floating or from floating to fixed), interest rate cap agreements and interest rate collar agreements; 
  

 10 

 (2) other agreements or arrangements designed to manage interest rates or interest rate
risk; and 
  
 (3) other agreements or
arrangements designed to protect such Person against fluctuations in currency exchange rates or commodity prices, 
  
 in each case, in reasonable relation to the business of MagnaChip and the Restricted Subsidiaries, and not for speculative purposes. 
  
 “Holder” means a Person in whose name a Note is registered.

  
 “Hynix Agreements” means each of the
following as the same may be amended, restated, supplemented, modified, renewed, extended or replaced from time to time: 
  
 (1) Business Transfer Agreement dated as of June 12, 2004 by and between Hynix and MagnaChip Korea; 
  
 (2) First Amendment to Business Transfer Agreement dated as
of October 6, 2004 by and between Hynix and MagnaChip Korea; 
  
 (3) General Services Supply Agreement dated as of October 6, 2004 by and between Hynix and MagnaChip Korea; 
  
 (4) each of the Overseas Sales Services Agreements dated as of October 6, 2004 by and between a Subsidiary of Hynix and a Subsidiary of
MagnaChip; 
  
 (5) R&D Equipment Utilization
Agreement dated as of October 6, 2004 by and between Hynix and MagnaChip Korea; 
  
 (6) IT & FA Service Agreement dated as of October 6, 2004 by and between Hynix and MagnaChip Korea; 
  
 (7) Wafer Foundry Service Agreement dated as of October 6,
2004 by and between Hynix and MagnaChip Korea; 
  
 (8) Mask Production and Supply Agreement dated as of October 6, 2004 by and between Hynix and MagnaChip Korea; 
  
 (9) each of the Building Lease Agreements dated as of October 6, 2004 by and between Hynix and MagnaChip Korea; 
  
 (10) Trademark License Agreement dated as of October 6, 2004
by and between Hynix and MagnaChip Korea; and 
  
 (11) Intellectual Property Licensing Agreement dated as of October 6, 2004 by and between Hynix and MagnaChip Korea. 
  
 “IAI Global Note” means a Global Note substantially in the form of Exhibit A1 hereto bearing the Global Note Legend and the Private
Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount of the Notes sold to Institutional Accredited
Investors. 
  

 11 

 “Immaterial Subsidiary” means, as of any date, any Restricted Subsidiary whose total
assets, as of that date, are less than $250,000 and whose total revenues for the most recent 12-month period do not exceed $250,000; provided that a Restricted Subsidiary will not be considered to be an Immaterial Subsidiary if it, directly
or indirectly, guarantees or otherwise provides direct credit support for any Indebtedness of MagnaChip; provided, further, that the revenues and total assets of all such subsidiaries shall not exceed $2.5 million in the aggregate.

  
 “Indebtedness” means, with respect to any
specified Person, any indebtedness of such Person (excluding accrued expenses and trade payables), whether or not contingent: 
  
 (1) in respect of borrowed money; 
  
 (2) evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof);

  
 (3) in respect of banker’s acceptances;

  
 (4) representing Capital Lease Obligations;

  
 (5) representing the balance deferred and
unpaid of the purchase price of any property or services due more than six months after such property is acquired or such services are completed; or 
  
 (6) representing any Hedging Obligations, 
  
 if and to the extent any of the preceding items (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of the specified
Person prepared in accordance with GAAP. In addition, the term “Indebtedness” includes all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person
and the amount of such obligation being deemed to be the lesser of the value of such asset and the amount of the obligation so secured) and, to the extent not otherwise included, the Guarantee by the specified Person of any Indebtedness of any other
Person. 
  
 “Indenture” means this Indenture, as
amended or supplemented from time to time. 
  
 “Indirect
Participant” means a Person who holds a beneficial interest in a Global Note through a Participant. 
  
 “Initial Notes” means the first $500,000,000 aggregate principal amount of Notes issued under this Indenture on the date hereof.

  
 “Initial Purchasers” means UBS Securities
LLC, Seoul Branch, UBS Securities LLC, Citigroup Global Market Inc., Goldman, Sachs & Co., J.P. Morgan Securities Inc., and Deutsche Bank Securities LLC. 
  
 “Institutional Accredited Investor” means an institution that is an “accredited investor” as defined in Rule 501(a)(1), (2),
(3) or (7) under the Securities Act, who are not also QIBs. 
  
 “Investments” means, with respect to any Person, all direct or indirect investments by such Person in other Persons (including Affiliates) in the forms of loans (including Guarantees or other obligations), advances or
capital contributions (excluding (A) advances to customers in the ordinary course of business that are recorded as accounts receivable on the consolidated balance sheet of such 
  

 12 

 Person and (B) commission, travel, moving and similar advances to officers and employees made in the ordinary course of
business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. If
MagnaChip or any Subsidiary of MagnaChip sells or otherwise disposes of any Equity Interests of any direct or indirect Subsidiary of MagnaChip such that, after giving effect to any such sale or disposition, such Person is no longer a Subsidiary of
MagnaChip, MagnaChip will be deemed to have made an Investment on the date of any such sale or disposition equal to the Fair Market Value of MagnaChip’s Investments in such Subsidiary that were not sold or disposed of in an amount determined as
provided in the final paragraph of Section 4.07 hereof. The acquisition by MagnaChip or any Subsidiary of MagnaChip of a Person that holds an Investment in a third Person will be deemed to be an Investment by MagnaChip or such Subsidiary in such
third Person in an amount equal to the Fair Market Value of the Investments held by the acquired Person in such third Person in an amount determined as provided in the final paragraph of Section 4.07 hereof. Except as otherwise provided in this
Indenture, the amount of an Investment will be determined at the time the Investment is made and without giving effect to subsequent changes in value. 
  
 “Issue Date” means the date of this Indenture. 
  

“Legal Holiday” means a Saturday, a Sunday or a day on which banking institutions in The City of New York, Seoul, Korea or at a place
of payment of any payment due in respect of any Notes are authorized by law, regulation or executive order to remain closed. If a payment date is a Legal Holiday, payment may be made on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue on such payment for the intervening period. 
  
 “Letter of Transmittal” means the letter of transmittal to be prepared by the Issuers and sent to all Holders of the Notes for use by such Holders in connection with the Exchange Offer. 
  
 “Lien” means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the
nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction. 
  
 “Liquidated Damages” means all liquidated damages then owing
pursuant to the Registration Rights Agreement. 
  
 “Moody’s” means Moody’s Investors Service, Inc. 
  
 “Net Income” means, with respect to any specified Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of preferred stock dividends,
excluding, however: 
  
 (1) any gain (or loss),
together with any related provision for taxes on such gain (or loss), realized in connection with: (a) any Asset Sale; or (b) the disposition of any securities by such Person or any of its Restricted Subsidiaries or the extinguishment of any
Indebtedness of such Person or any of its Restricted Subsidiaries; and 
  
 (2) any extraordinary gain (or loss), together with any related provision for taxes on such extraordinary gain (or loss). 
  

 13 

 “Net Proceeds” means the aggregate cash proceeds received by MagnaChip or any of its
Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of the direct costs relating to such Asset Sale,
including, without limitation, legal, accounting and investment banking fees, and sales commissions, and any relocation expenses incurred as a result of the Asset Sale, taxes paid or payable as a result of the Asset Sale, and any repayment of
Indebtedness that was permitted to be secured by the assets sold in such Asset Sale, after taking into account any available tax credits or deductions and any tax sharing arrangements, and any reserve for adjustment in respect of the sale price of
such asset or assets established in accordance with GAAP. 
  
 “Non-Recourse Debt” means Indebtedness: 
  
 (1) as to which neither MagnaChip nor any of its Restricted Subsidiaries (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness), (b) is directly
or indirectly liable as a guarantor or otherwise, or (c) constitutes the lender; 
  
 (2) no default with respect to which (including any rights that the holders of the Indebtedness may have to take enforcement action
against an Unrestricted Subsidiary) would permit upon notice, lapse of time or both any holder of any other Indebtedness of MagnaChip or any of its Restricted Subsidiaries to declare a default on such other Indebtedness or cause the payment of the
Indebtedness to be accelerated or payable prior to its Stated Maturity; and 
  
 (3) as to which the lenders have been notified in writing that they will not have any recourse to the stock or assets of MagnaChip or any of its Restricted Subsidiaries. 
  
 “Non-U.S. Person” means a Person who is not a U.S. Person.

  
 “Note Guarantee” means the Guarantee by each
Guarantor of MagnaChip’s obligations under this Indenture and the Notes, executed pursuant to the provisions of this Indenture. 
  
 “Notes” has the meaning assigned to it in the preamble to this Indenture. The Initial Notes and the Additional Notes shall be treated as
a single class for all purposes under this Indenture, and unless the context otherwise requires, all references to the Notes shall include the Initial Notes and any Additional Notes. 
  
 “Obligations” means any principal (including reimbursement obligations with respect to letters of credit
whether or not drawn), interest, premium, if any, fees, indemnifications, reimbursements, expenses and other liabilities payable under the documentation governing any Indebtedness. 
  
 “Officer” means, with respect to any Person, the Chairman of the Board, the Chief Executive Officer, the
President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary, any Vice-President, any Director, any Manager, any Managing Director, or any Person authorized by any of the
foregoing as set forth in an Officers’ Certificate. 
  
 “Officers’ Certificate” means a certificate signed on behalf of MagnaChip by two Officers of MagnaChip, one of whom must be the principal executive officer, the principal financial officer, the treasurer or the
principal accounting officer of MagnaChip, that meets the requirements of Section 14.05 hereof and is delivered to the Trustee. 
  

 14 

 “Opinion of Counsel” means an opinion from legal counsel who is reasonably acceptable to
the Trustee, that meets the requirements of Section 14.05 hereof. The counsel may be an employee of or counsel to MagnaChip or any Restricted Subsidiary of MagnaChip. 
  
 “Participant” means, with respect to the Depositary, Euroclear or Clearstream, a Person who has an account
with the Depositary, Euroclear or Clearstream, respectively (and, with respect to DTC, shall include Euroclear and Clearstream). 
  
 “Permitted Business” means the businesses of MagnaChip, its direct and indirect parents, and their respective subsidiaries as of the
Issue Date and any other business ancillary or supplementary to the semiconductor business. 
  
 “Permitted Investments” means: 
  
 (1) any Investment in MagnaChip or in a Restricted Subsidiary of MagnaChip; 
  
 (2) any Investment in Cash Equivalents; 
  
 (3) any Investment by MagnaChip or any Restricted Subsidiary of MagnaChip in a Person, if as a result of
such Investment: 
  
 (a) such Person becomes a
Restricted Subsidiary of MagnaChip; or 
  
 (b)
such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, MagnaChip or a Restricted Subsidiary of MagnaChip; 
  
 (4) any Investment made as a result of the receipt of
non-cash consideration from an Asset Sale that was made pursuant to and in compliance with Section 4.10 hereof; 
  
 (5) any acquisition of assets or Capital Stock solely in exchange for the issuance of Equity Interests (other than Disqualified Stock) of
MagnaChip or any of its direct or indirect parents; 
  
 (6) any Investments received in compromise or resolution of (A) obligations that were incurred in the ordinary course of business of MagnaChip or any of its Restricted Subsidiaries, including pursuant to any plan of reorganization or
similar arrangement upon the bankruptcy or insolvency of any trade creditor or customer; or (B) litigation, arbitration or other disputes with Persons who are not Affiliates; 
  
 (7) Investments represented by Hedging Obligations; 
  
 (8) loans or advances to employees, directors, officers or
consultants made in the ordinary course of business of MagnaChip or any Restricted Subsidiary of MagnaChip in an aggregate principal amount not to exceed $5.0 million at any one time outstanding; 
  
 (9) repurchases of the Second Priority Notes and the Notes;

  
 (10) (A) advances to customers in the
ordinary course of business that are recorded as accounts receivable on the consolidated balance sheet of such Person and (B) payroll, travel and similar advances to cover matters that are expected at the time of the advances ultimately to be
treated as expenses for accounting purposes and that are made in the ordinary course of business; 
  

 15 

 (11) receivables owing to MagnaChip or any Restricted Subsidiary of MagnaChip if created
or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms; provided, however, that such trade terms may include the concessionaire trade terms as MagnaChip or the Restricted
Subsidiary deems reasonable under the circumstances; 
  
 (12) Investments in existence on the Issue Date; 
  
 (13) Investments in any Person to the extent such Investments consist of prepaid expenses, negotiable instruments held for collection and lease, utility and workers’ compensation, performance and other similar
deposits made in the ordinary course of business by MagnaChip or any Restricted Subsidiary; 
  
 (14) Investment in any Person where such Investment was acquired by MagnaChip or any of the Restricted Subsidiaries (A) in exchange for
any other Investment or accounts receivable held by MagnaChip or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts
receivable or (B) as a result of a foreclosure by MagnaChip or any of the Restricted Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default; and 
  
 (15) other Investments in any Person having an aggregate
Fair Market Value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (15) that are at the time outstanding that
does not exceed the greater of (A) $50.0 million and (B) 5.0% of Total Assets (with the fair market value of each Investment being measured at the time made and without giving effect to subsequent changes in value). Provided that any cash return on
capital in any such Permitted Investment (including through any dividend, distribution, repayment, redemption, payment of interest or other transfer) made pursuant to this clause (15) will reduce the amount of any such Permitted Investment for
purposes of calculating the amount of Permitted Investments under this clause (15) and will be excluded from clauses (3)(A), (D) and (E) of the first paragraph of Section 4.07(a); provided, that the total reduction may not exceed the amount of the
original investment. 
  
 “Permitted Junior
Securities” means: 
  
 (1) Equity
Interests in the Issuers or any Guarantor; or 
  
 (2) debt securities that are subordinated to all Senior Debt and any debt securities issued in exchange for Senior Debt to substantially the same extent as, or to a greater extent than, the Notes and the Note Guarantees are subordinated to
Senior Debt under this Indenture. 
  
 “Permitted
Liens” means: 
  
 (1) Liens on assets of
MagnaChip or any of its Restricted Subsidiaries securing Senior Debt that was permitted by the terms of this Indenture to be incurred; 
  
 (2) Liens in favor of MagnaChip or the Restricted Subsidiaries; 
  
 (3) Liens on property of a Person existing at the time such Person is merged with or into or consolidated
with MagnaChip or any Subsidiary of MagnaChip; provided that such Liens were in existence prior to the contemplation of such merger or consolidation and do not extend to any assets other than those of the Person merged into or consolidated
with MagnaChip or the Subsidiary; 
  

 16 

 (4) Liens on property (including Capital Stock) existing at the time of acquisition of
the property by MagnaChip or any Subsidiary of MagnaChip; provided that such Liens were in existence prior to, such acquisition, and not incurred in contemplation of, such acquisition; 
  
 (5) Liens to secure the performance of statutory
obligations, surety or appeal bonds, performance bonds or other obligations of a like nature incurred in the ordinary course of business; 
  
 (6) Liens to secure Indebtedness (including Capital Lease Obligations) permitted by Section 4.09(b)(5) hereof covering only the assets
acquired with or financed by such Indebtedness; 
  
 (7) Liens existing on the Issue Date; 
  
 (8) Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded; provided that any
reserve or other appropriate provision as is required in conformity with GAAP has been made therefor; 
  
 (9) Liens imposed by law, such as carriers’, warehousemen’s, landlord’s and mechanics’ Liens, in each case, incurred
in the ordinary course of business; 
  
 (10)
pledges or deposits by a Person under worker’s compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to
which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent, in each case incurred in the ordinary course of business; 
  
 (11) survey exceptions, easements or reservations of, or rights of others for, licenses, rights-of-way,
sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real property that were not incurred in connection with Indebtedness and that do not in the aggregate materially
adversely affect the value of said properties or materially impair their use in the operation of the business of such Person; 
  
 (12) Liens created for the benefit of (or to secure) the Notes (or the guarantees thereof); 
  
 (13) attachment or judgment Liens not giving rise to an
Event of Default; 
  
 (14) Liens arising solely
by virtue of any statutory or common law provision relating to banker’s Liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a creditor depository institution; provided, however,
that (A) such deposit account is not a dedicated cash collateral account and is not subject to restrictions against access by MagnaChip or any of its Restricted Subsidiaries in excess of those set forth by regulations promulgated by the Federal
Reserve Board and (B) such deposit account is not intended by MagnaChip or any Restricted Subsidiary to provide collateral to the depository institution; 
  
 (15) Liens securing Hedging Obligations so long as such Hedging Obligations relate to Indebtedness that is permitted to be incurred under
this Indenture; 
  

 17 

 (16) Liens arising from the filing of Uniform Commercial Code financing statements
regarding leases; 
  
 (17) Liens to secure any
Permitted Refinancing Indebtedness permitted to be incurred under this Indenture; provided, however, that: 
  
 (a) the new Lien shall be limited to all or part of the same property and assets that secured or, under the written agreements pursuant to
which the original Lien arose, could secure the original Lien (plus improvements and accessions to, such property or proceeds or distributions thereof); and 
  
 (b) the Indebtedness secured by the new Lien is not increased to any amount greater than the sum of (x) the
outstanding principal amount, or, if greater, committed amount, of the Permitted Refinancing Indebtedness and (y) an amount necessary to pay any fees and expenses, including premiums, related to such renewal, refunding, refinancing, replacement,
defeasance or discharge; 
  
 (18) Leases or
subleases granted to others that do not materially interfere with the ordinary course of business of MagnaChip and its Restricted Subsidiaries; 
  
 (19) Liens on deposits, in an aggregate amount not to exceed $250,000 at any one time outstanding, made in the ordinary course of business
to secure liability to insurance carriers; 
  
 (20) Liens under licensing agreements for use of intellectual property entered into in the ordinary course of business; 
  
 (21) Customary liens on deposits required in connection with the purchase of property, plant, equipment, inventory and other assets;

  
 (22) Liens to secure all loans which may not
be prepaid prior to one year following the date such loan is made under the Senior Credit Facility between MagnaChip Semiconductor, Ltd. (Korea) and certain institutional lenders with the Korean Exchange Bank, as agent, and liens on deposits made in
order to secure the payment of such debt when prepayment is permitted; 
  
 (23) Liens to secure Indebtedness permitted by Section 4.09(b)(2) and (17) hereof, provided, that with respect to such Section 4.09(b)(17), such Liens cover only the assets owned by the Subsidiary incurring such
Indebtedness; 
  
 (24) Liens incurred or deposits
made in the ordinary course of business in connection with worker’s compensation, unemployment insurance and other types of social security; 
  
 (25) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into by
MagnaChip or any of the Restricted Subsidiaries in the ordinary course of business; and 
  
 (26) Liens incurred in the ordinary course of business of MagnaChip or any Restricted Subsidiary of MagnaChip with respect to obligations
that do not exceed $5.0 million at any one time outstanding. 
  
 “Permitted Refinancing Indebtedness” means any Indebtedness of MagnaChip or any of its Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, extend,
defease or discharge other Indebtedness of MagnaChip or any of its Restricted Subsidiaries (other than intercompany Indebtedness); provided that: 
  
 (1) the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal
amount (or accreted value, if applicable) of the Indebtedness renewed, refunded, refinanced, replaced, extended, defeased or discharged (plus all accrued interest on the Indebtedness and the amount of all fees and expenses, including
premiums, incurred in connection therewith); 
  

 18 

 (2) such Permitted Refinancing Indebtedness has a final maturity date later than the
final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being renewed, refunded, refinanced, replaced, extended, defeased or discharged; 
  
 (3) if the Indebtedness being renewed, refunded, refinanced,
replaced, extended, defeased or discharged is subordinated in right of payment to the Notes, such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and is subordinated in right of payment to, the
Notes on terms at least as favorable to the holders of Notes as those contained in the documentation governing the Indebtedness being renewed, refunded, refinanced, replaced, extended, defeased or discharged; and 
  
 (4) such Indebtedness is incurred either by MagnaChip or by
the Restricted Subsidiary who is the obligor on the Indebtedness being renewed under Section 951 of the code, refunded, refinanced, replaced, extended, defeased or discharged. 
  
 “Permitted Tax Payments” means, for so long as US LLC is treated as a partnership for U.S. federal income
tax purposes, payments in respect of tax liabilities of US LLC’s investors arising from direct or indirect ownership of US LLC’s equity interests under Section 951 of the Code. Permitted Tax Payments shall be calculated by reference to the
amount of US LLC’s and its Subsidiaries’ income determined to be an amount required to be included in income under section 951 of the Code times 35%. A nationally recognized accounting firm chosen by US LLC shall determine the amount of
Permitted Tax Payments. 
  
 “Person” means any
individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company or government or other entity. 
  
 “Principals” means 
  
 (1) (A) Francisco Partners, L.P. (“FP”), any FP fund or co-investment partnership, (B) any
general partner of any FP fund or co-investment partnership (collectively, an “FP Partner”), and any corporation, partnership or other entity that is an Affiliate of any FP Partner (collectively “FP Affiliates”),
(C) any managing director, general partner, director, officer or employee of an FP fund, any FP Partner or any FP Affiliate, or any spouse, lineal descendant, sibling, parent, heir, executor, administrator, testamentary trustee, legatee or
beneficiary of any of the foregoing persons described in this clause (1)(A) (collectively, “FP Associates”) and (D) any trust, the beneficiaries of which, any charitable trust, the grantor of which, or any corporation, limited
liability company or partnership, the stockholders, members or general or limited partners of which include only FP, FP Partners, FP Affiliates, FP Associates, their spouses or their lineal descendants; 
  
 (2) (A) Citigroup Venture Capital Equity Partners, L.P.
(“CVC”), CVC/SSB Employee Fund, L.P., CVC Executive Fund LLC, Natasha Foundation, Citicorp Venture Capital Ltd., any CVC fund or co-investment partnership, Citigroup, any affiliate of Citigroup or any general partner of any CVC fund
or co-investment partnership (collectively, a “CVC Partner”), and any corporation, partnership or other entity that is an Affiliate of Citigroup or any CVC 
  

 19 

 Partner (collectively “CVC Affiliates”), (B) any managing director, general partner,
director, officer or employee of any CVC fund, any CVC Partner or any CVC Affiliate, or any spouse, lineal descendant, sibling, parent, heir, executor, administrator, testamentary trustee, legatee or beneficiary of any of the foregoing persons
described in this clause (B) (collectively, “CVC Associates”) and (C) any trust, the beneficiaries of which, any charitable trust, the grantor of which, or any corporation, limited liability company or partnership, the stockholders,
members or general or limited partners of which include only CVC, CVC Partners, CVC Affiliates, CVC Associates, their spouses or their lineal descendants; 
  
 (3) (A) CVC Capital Partners Asia II Limited (“CVC Asia Pacific”), CVC Capital Partners Asia Pacific LP, Asia Investors
LLC, any CVC Asia Pacific fund or co-investment partnership, or any general partner of any CVC Asia Pacific fund or co-investment partnership (collectively, a “CVC Asia Pacific Partner”), and any corporation, partnership or other
entity that is an Affiliate of any CVC Asia Pacific Partner (collectively “CVC Asia Pacific Affiliates”), (B) any managing director, general partner, director, officer or employee of any CVC Asia Pacific fund, any CVC Asia Pacific
Partner or any CVC Asia Pacific Affiliate, or any spouse, lineal descendant, sibling, parent, heir, executor, administrator, testamentary trustee, legatee or beneficiary of any of the foregoing persons described in this clause (B) (collectively,
“CVC Asia Pacific Associates”) and (C) any trust, the beneficiaries of which, any charitable trust, the grantor of which, or any corporation, limited liability company or partnership, the stockholders, members or general or limited
partners of which include only CVC Asia Pacific, CVC Asia Pacific Partners, CVC Asia Pacific Affiliates, CVC Asia Pacific Associates, their spouses or their lineal descendants; and 
  
 (4) officers and directors of US LLC or its Subsidiaries on the Issue Date. 
  
 Except for a Principal specifically identified by name, in determining whether Voting Stock
is owned by a Principal, only Voting Stock acquired by a Principal in its described capacity shall be treated as “beneficially owned” by such Principal. 
  
 “Private Placement Legend” means the legend set forth in Section 2.06(g)(1) hereof to be placed on all
Notes issued under this Indenture except where otherwise permitted by the provisions of this Indenture. 
  
 “Public Equity Offering” means an offer and sale of Capital Stock (other than Disqualified Stock) of MagnaChip or any of its direct or
indirect parents pursuant to a registration statement that has been declared effective by the SEC pursuant to the Securities Act (other than a registration statement on Form S-8 or otherwise relating to equity securities issuable under any employee
benefit plan of MagnaChip). 
  
 “QIB” means a
“qualified institutional buyer” as defined in Rule 144A. 
  
 “Registration Rights Agreement” means the Registration Rights Agreement, dated as of December 23, 2004, among the Issuers, the Guarantors and the other parties named on the signature pages thereof, as such agreement may be
amended, modified or supplemented from time to time and, with respect to any Additional Notes, one or more registration rights agreements among the Issuers, the Guarantors and the other parties thereto, as such agreement(s) may be amended, modified
or supplemented from time to time, relating to rights given by the Issuers to the purchasers of Additional Notes to register such Additional Notes under the Securities Act. 
  
 “Regulation S” means Regulation S promulgated under the Securities Act. 
  

 20 

 “Regulation S Global Note” means a Regulation S Temporary Global Note or Regulation S
Permanent Global Note, as appropriate. 
  
 “Regulation S
Permanent Global Note” means a permanent Global Note in the form of Exhibit A1 hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its
nominee, issued in a denomination equal to the outstanding principal amount of the Regulation S Temporary Global Note upon expiration of the Restricted Period. 
  

“Regulation S Temporary Global Note” means a temporary Global Note in the form of Exhibit A2 hereto deposited with or on behalf of and
registered in the name of the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Notes initially sold in reliance on Rule 903 of Regulation S. 
  
 “Related Party” means: 
  
 (1) any controlling stockholder, 80% (or more) owned
Subsidiary, or immediate family member (in the case of an individual) of any Principal; or 
  
 (2) any trust, corporation, partnership, limited liability company or other entity, the beneficiaries, stockholders, partners, members,
owners or Persons beneficially holding an 80% or more controlling interest of which consist of any one or more Principals and/or such other Persons referred to in the immediately preceding clause (1). 
  
 “Requirements of Law” means, collectively, any and all
requirements of any Government Authority including any and all laws, judgments, orders, decrees, ordinances, rules, regulations, statutes of case law. 
  
 “Responsible Officer,” when used with respect to the Trustee, means any officer within the Corporate Trust Division - Corporate Finance
Unit of the Trustee (or any successor unit or department of the Trustee) located at the Corporate Trust Office of the Trustee who has direct responsibility for the administration of this Indenture and, for the purposes of Section 7.01(c)(2) and
Section 7.05 (for the purposes of Section 315(b) of the TIA), shall also include any officer of the Trustee to whom any corporate trust matter is referred because of his knowledge of and familiarity with the particular subject. 
  
 “Restricted Definitive Note” means a Definitive Note bearing
the Private Placement Legend. 
  
 “Restricted Global
Note” means a Global Note bearing the Private Placement Legend. 
  
 “Restricted Investment” means an Investment other than a Permitted Investment. 
  
 “Restricted Period” means the 40-day distribution compliance period as defined in Regulation S. 
  

“Restricted Subsidiary” of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary;
provided, that each of US LLC, MagnaChip Semiconductor SA Holdings LLC (USA) and MagnaChip Semiconductor, Inc. (USA) shall be deemed to be a Restricted Subsidiary of MagnaChip. 
  
 “Rule 144” means Rule 144 promulgated under the Securities Act. 
  
 “Rule 144A” means Rule 144A promulgated under the Securities
Act. 
  

 21 

 “Rule 903” means Rule 903 promulgated under the Securities Act. 
  
 “Rule 904” means Rule 904 promulgated under the Securities
Act. 
  
 “S&P” means Standard &
Poor’s Ratings Group. 
  
 “SEC” means the
Securities and Exchange Commission. 
  
 “Securities
Act” means the Securities Act of 1933, as amended. 
  
 “Second Priority Notes” means the Issuers’ Floating Rate Second Priority Senior Secured Notes due 2011 and Fixed Rate Second Priority Senior Secured Notes due 2011 to be issued on the Issue Date. 
  
 “Second Priority Notes Indenture” means the indenture
governing the Issuers’ Second Priority Notes. 
  
 “Securityholders’ Agreement” means the Amended and Restated Securityholders’ Agreement dated as of October 6, 2004 by and among US LLC and the other parties thereto, as the same may be amended, restated,
supplemented, modified or replaced from time to time. 
  
 “Senior Credit Agreement” means that certain Credit Agreement, to be dated as of December 23, 2004, by and among MagnaChip and the lenders thereto, providing for up to $100.0 million of revolving credit borrowings,
including any related notes, Guarantees, collateral documents, instruments and agreements executed in connection therewith, and, in each case, as amended, restated, modified, extended, renewed, refunded, replaced (whether upon or after termination
or otherwise) or refinanced (including by means of sales of debt securities to institutional investors) in whole or in part from time to time. 
  
 “Senior Debt” means: 
  
 (1) all Indebtedness of the Issuers or any Guarantor outstanding under Credit Facilities and all Hedging Obligations with respect thereto;

  
 (2) any other Indebtedness of the Issuers or
any Guarantor permitted to be incurred under the terms of this Indenture, unless the instrument under which such Indebtedness is incurred expressly provides that it is on a parity with or subordinated in right of payment to the Notes or any Note
Guarantee; and 
  
 (3) all Obligations with
respect to the items listed in the preceding clauses (1) and (2). 
  
 Notwithstanding anything to the contrary in the preceding, Senior Debt will not include: 
  
 (1) any liability for federal, state, local or other taxes owed or owing by the Issuers; 
  
 (2) any intercompany Indebtedness of the Issuers or any of
their Subsidiaries or direct or indirect parents or to the Issuers or any of its Affiliates; 
  
 (3) any trade payables; 
  
 (4) the portion of any Indebtedness that is incurred in violation of this Indenture; or 
  

 22 

 (5) Indebtedness which is classified as non-recourse in accordance with GAAP or any
unsecured claim arising in respect thereof by reason of the application of section 1111(b)(1) of the Bankruptcy Code. 
  
 “Shelf Registration Statement” means the Shelf Registration Statement as defined in the Registration Rights Agreement. 
  
 “Significant Subsidiary” means any Subsidiary that would be
a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the Issue Date. 
  
 “Stated Maturity” means, with respect to any installment of interest or principal on any series of
Indebtedness, the date on which the payment of interest or principal was scheduled to be paid in the documentation governing such Indebtedness as of the Issue Date, and will not include any contingent obligations to repay, redeem or repurchase any
such interest or principal prior to the date originally scheduled for the payment thereof. 
  
 “Subordinated Obligations” means any Indebtedness of MagnaChip, whether outstanding on the Issue Date or thereafter incurred, which is subordinate or junior in right of payment to, in the case of the
Issuers, the Notes or, in the case of any Subsidiary Guarantor, its Guarantee, under a written agreement to that effect. 
  
 “Subsidiary” means, with respect to any specified Person: 
  
 (1) any corporation, association or other business entity of which more than 50% of the total voting power
of shares of Capital Stock entitled (without regard to the occurrence of any contingency and after giving effect to any voting agreement or stockholders’ agreement that effectively transfers voting power) to vote in the election of directors,
managers or trustees of the corporation, association or other business entity is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and

  
 (2) any partnership (a) the sole general
partner or the managing general partner of which is such Person or a Subsidiary of such Person or (b) the only general partners of which are that Person or one or more Subsidiaries of that Person (or any combination thereof). 
  
 “Tax” means any tax, duty, levy, impost, assessment or other
governmental charge (including penalties and interest related thereto). 
  
 “Taxes” and “Taxation” shall be construed to have corresponding meanings to Tax. 
  
 “TIA” means the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb), as in effect on the date on which this Indenture is
qualified under the TIA. 
  
 “Total Assets” means
the total amount of all assets of a Person, determined on a consolidated basis in accordance with GAAP as shown on such Person’s most recent consolidated balance sheet prepared in accordance with GAAP. 
  
 “Treasury Rate” means, as of any redemption date, the yield
to maturity as of such redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two
business days prior to the redemption date (or, if such Statistical Release is no longer published, any 
  

 23 

 publicly available source of similar market data)) most nearly equal to the period from the redemption date to December
15, 2014; provided, however, that if the period from the redemption date to December 15, 2014, is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year
will be used. 
  
 “Trustee” means The Bank of New
York until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder. 
  
 “Unrestricted Definitive Note” means a Definitive Note that does not bear and is not required to bear the Private Placement Legend.

  
 “Unrestricted Global Note” means a Global
Note that does not bear and is not required to bear the Private Placement Legend. 
  
 “Unrestricted Subsidiary” means any Subsidiary of US LLC (other than the Issuers or any successor to them) that is designated by the Board of Directors of MagnaChip as an Unrestricted Subsidiary
pursuant to a resolution of the Board of Directors, but only to the extent that such Subsidiary: 
  
 (1) has no Indebtedness other than Non-Recourse Debt; 
  
 (2) except as permitted by Section 4.11 hereof, on the date of such designation, is not party to any
agreement, contract, arrangement or understanding with MagnaChip or any Restricted Subsidiary of MagnaChip unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to MagnaChip or such Restricted
Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of MagnaChip; 
  
 (3) is a Person with respect to which neither MagnaChip nor any of its Restricted Subsidiaries has any direct or indirect obligation (a)
to subscribe for additional Equity Interests or (b) to maintain or preserve such Person’s financial condition or to cause such Person to achieve any specified levels of operating results; and 
  
 (4) has not guaranteed or otherwise directly or indirectly
provided credit support for any Indebtedness of MagnaChip or any of its Restricted Subsidiaries. 
  
 “US LLC” refers to MagnaChip Semiconductor LLC (USA), the direct parent company of MagnaChip, and any successor thereto. 
  
 “U.S. Person” means a U.S. Person as defined in Rule 902(k)
promulgated under the Securities Act. 
  
 “Voting
Stock” of any specified Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person. 
  
 “Weighted Average Life to Maturity” means, when applied to
any Indebtedness at any date, the number of years obtained by dividing: 
  
 (1) the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in
respect of the Indebtedness, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by 
  

 24 

 (2) the then outstanding principal amount of such Indebtedness. 
  
 “Wholly-Owned Restricted Subsidiary” of any specified Person
means a Subsidiary of such Person all of the outstanding Capital Stock or other ownership interests of which (other than directors’ qualifying shares) will at the time be owned by such Person or by one or more Wholly-Owned Restricted
Subsidiaries of such Person. 
  
 Section 1.02 Other Definitions.

  

			
	 Term

	  	 Defined
in
 Section

	 “Affiliate Transaction”
	  	4.11
	 “Asset Sale Offer”
	  	3.09
	 “Authentication Order”
	  	2.02
	 “Change of Control Offer”
	  	4.15
	 “Change of Control Payment”
	  	4.15
	 “Change of Control Payment Date”
	  	4.15
	 “Covenant Defeasance”
	  	8.03
	 “DTC”
	  	2.03
	 “Event of Default”
	  	6.01
	 “Excess Proceeds”
	  	4.10
	 “incur”
	  	4.09
	 “Legal Defeasance”
	  	8.02
	 “Offer Amount”
	  	3.09
	 “Offer Period”
	  	3.09
	 “Paying Agent”
	  	2.03
	 “Permitted Debt”
	  	4.09
	 “Payment Default”
	  	6.01
	 “Purchase Date”
	  	3.09
	 “Redemption Date”
	  	3.10
	 “Registrar”
	  	2.03
	 “Restricted Payments”
	  	4.07

  
 Section 1.03 Incorporation by
Reference of Trust Indenture Act. 
  
 Whenever this Indenture
refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. 
  
 The following TIA terms used in this Indenture have the following meanings: 
  
 “indenture securities” means the Notes; 
  
 “indenture security Holder” means a Holder of a Note; 
  
 “indenture to be qualified” means this Indenture;

  
 “indenture trustee” or “institutional
trustee” means the Trustee; and 
  
 “obligor” on the Notes and the Note Guarantees means the Issuers and the Guarantors, respectively, and any successor obligor upon the Notes and the Note Guarantees, respectively. 
  

 25 

 All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another
statute or defined by SEC rule under the TIA have the meanings so assigned to them. 
  
 Section 1.04 Rules of Construction. 
  
 Unless
the context otherwise requires: 
  
 (1) a term
has the meaning assigned to it; 
  
 (2) an
accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; 
  
 (3) “or” is not exclusive; 
  
 (4) words in the singular include the plural, and in the plural include the singular; 
  
 (5) “will” shall be interpreted to express a
command; 
  
 (6) provisions apply to successive
events and transactions; and 
  
 (7) references
to sections of or rules under the Securities Act will be deemed to include substitute, replacement of successor sections or rules adopted by the SEC from time to time. 
  
 ARTICLE 2. 
 THE NOTES 
  
 Section 2.01 Form and Dating. 
  
 (a) General. The Notes and Trustee’s certificate of
authentication will be substantially in the form of Exhibit A hereto. The Notes may have notations, legends or endorsements required by law, stock exchange rule or usage. The Issuer shall reasonably approve the form of the Notes and any notation,
legend or endorsement on them. Each Note will be dated the date of its authentication. The Notes shall be in denominations of $1,000 and integral multiples thereof. 
  
 The terms and provisions contained in the Notes will constitute, and are hereby expressly made, a part of this Indenture and
the Issuers, the Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Note conflicts with the express
provisions of this Indenture, the provisions of this Indenture shall govern and be controlling. 
  
 (b) Global Notes. Notes issued in global form will be substantially in the form of Exhibits A1 or A2 hereto (including the Global Note Legend
thereon and the “Schedule of Exchanges of Interests in the Global Note” attached thereto). Notes issued in definitive form will be substantially in the form of Exhibit A1 hereto (but without the Global Note Legend thereon and without the
“Schedule of Exchanges of Interests in the Global Note” attached thereto). Each Global Note will represent such of the outstanding Notes as will be specified therein and each shall provide that it represents the aggregate principal amount
of outstanding Notes, from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions. Any
endorsement of a Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Notes represented thereby will be made by the Trustee or the Custodian, at the direction of the Trustee, in accordance
with instructions given by the Holder thereof as required by Section 2.06 hereof. 
  

 26 

 (c) Temporary Global Notes. Notes offered and sold in reliance on Regulation S will be issued
initially in the form of the Regulation S Temporary Global Notes, which will be deposited on behalf of the purchasers of the Notes represented thereby with the Trustee, at its New York Corporate Trust Office, as custodian for the Depositary, and
registered in the name of the Depositary or the nominee of the Depositary for the accounts of designated agents holding on behalf of Euroclear or Clearstream, duly executed by the Issuers and authenticated by the Trustee as hereinafter provided. The
Restricted Period with respect to the Regulation S Temporary Global Notes will be terminated upon the receipt by the Trustee of: 
  
 (1) a written certificate from the Depositary, together with copies of certificates from Euroclear and Clearstream certifying that they
have received certification of non-United States beneficial ownership of 100% of the aggregate principal amount of the relevant Regulation S Temporary Global Note (except to the extent of any beneficial owners thereof who acquired an interest
therein during the Restricted Period pursuant to another exemption from registration under the Securities Act and who will take delivery of a beneficial ownership interest in a 144A Global Note or an IAI Global Note bearing a Private Placement
Legend, all as contemplated by Section 2.06(b) hereof); and 
  
 (2) an Officers’ Certificate from the Issuers. 
  
 Following the termination of the Restricted Period, beneficial interests in the Regulation S Temporary Global Note will be exchanged for beneficial interests in the Regulation S Permanent Global Note, pursuant to the
Applicable Procedures. Simultaneously with the authentication of any Regulation S Permanent Global Note, the Trustee will cancel the relevant Regulation S Temporary Global Note. The aggregate principal amount of the Regulation S Permanent Global
Note and the Regulation S Temporary Global Note may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depositary or its nominee, as the case may be, in connection with transfers of interest as
hereinafter provided. 
  
 (d) Euroclear and Clearstream
Procedures Applicable. The provisions of the “Operating Procedures of the Euroclear System” and “Terms and Conditions Governing Use of Euroclear” and the “General Terms and Conditions of Clearstream Banking” and
“Customer Handbook” of Clearstream will be applicable to transfers of beneficial interests in the Regulation S Temporary Global Notes and the Regulation S Permanent Global Notes that are held by Participants through Euroclear or
Clearstream. 
  
 Section 2.02 Execution and Authentication. 
  
 At least one Officer must sign the Notes for the Issuers by manual or
facsimile signature. 
  
 If an Officer whose signature is on a
Note no longer holds that office at the time a Note is authenticated, the Note will nevertheless be valid. 
  
 A Note will not be valid until authenticated by the manual signature of the Trustee. The signature will be conclusive evidence that the Note has been
authenticated under this Indenture. 
  
 The Trustee will, upon
receipt of a written order of the Issuers signed by one Officer of each Issuer (an “Authentication Order”), authenticate Notes for original issue that may be validly issued under this Indenture, including any Additional Notes from
time to time as permitted under this Indenture. The 
  

 27 

 aggregate principal amount of Notes outstanding at any time may not exceed the aggregate principal amount of Notes
authorized for issuance by the Issuers pursuant to one or more Authentication Orders, except as provided in Section 2.07 hereof. 
  
 The Trustee may appoint an authenticating agent acceptable to the Issuers to authenticate Notes. An authenticating agent may authenticate Notes whenever
the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with Holders or an Affiliate of the Issuers. 

 
 Section 2.03 Registrar and Paying Agent.

  
 The Issuers will maintain or cause to be maintained an office
or agency where Notes may be presented for registration of transfer or for exchange (“Registrar”) and an office or agency where Notes may be presented for payment (“Paying Agent”). The Registrar will keep a register
of the Notes and of their transfer and exchange. The Issuers may appoint one or more co-registrars and one or more additional paying agents. The term “Registrar” includes any co-registrar and the term “Paying Agent” includes any
additional paying agent. The Issuers may change any Paying Agent or Registrar without notice to any Holder. The Issuers will notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Issuers fail to
appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. The Issuers or any of their Subsidiaries may act as Paying Agent or Registrar. 
  
 The Issuers initially appoint The Depository Trust Company (“DTC”) to act as Depositary with respect to the
Global Notes. 
  
 The Issuers initially appoints the Trustee to
act as the Registrar and Paying Agent and to act as Custodian with respect to the Global Notes. 
  
 Section 2.04 Paying Agent to Hold Money in Trust. 
  
 The Issuers will require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in
trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal, premium or Liquidated Damages, if any, or interest on the Notes, and will notify the Trustee of any default by the Issuers in making any
such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Issuers at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to
the Trustee, the Paying Agent (if other than the Issuers, MagnaChip Semiconductor LLC or a Subsidiary) will have no further liability for the money. If the Issuers, MagnaChip Semiconductor LLC or a Subsidiary acts as Paying Agent, it will segregate
and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Issuers, the Trustee will serve as Paying Agent for the Notes. 
  
 Section 2.05 Holder Lists. 
  
 The Trustee will preserve in as current a form as is reasonably practicable
the most recent list available to it of the names and addresses of all Holders and shall otherwise comply with TIA § 312(a). If the Trustee is not the Registrar, the Issuers will furnish to the Trustee at least seven Business Days before each
interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders of Notes and the Issuers shall otherwise
comply with TIA § 312(a). 
  

 28 

 Section 2.06 Transfer and Exchange. 
  
 (a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred except as a whole by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to a successor Depositary or a nominee
of such successor Depositary. All Global Notes will be exchanged by the Issuers for Definitive Notes if: 
  
 (1) the Issuers deliver to the Trustee notice from the Depositary that it is unwilling or unable to continue to act as Depositary or that
it is no longer a clearing agency registered under the Exchange Act and, in either case, a successor Depositary is not appointed by the Issuers within 120 days after the date of such notice from the Depositary; 
  
 (2) the Issuers in their sole discretion determine that the
Global Notes (in whole but not in part) should be exchanged for Definitive Notes and delivers a written notice to such effect to the Trustee; provided that in no event shall the Regulation S Temporary Global Note be exchanged by the Issuers
for Definitive Notes prior to (A) the expiration of the Restricted Period and (B) the receipt by the Registrar of any certificates required pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act; or 
  
 (3) there has occurred and is continuing a Default or Event
of Default with respect to the Notes. 
  
 Upon the occurrence of
either of the preceding events in (1), (2) or (3) above, Definitive Notes shall be issued in such names as the Depositary shall instruct the Trustee. Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.07
and 2.10 hereof. Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form of, and
shall be, a Global Note. A Global Note may not be exchanged for another Note other than as provided in this Section 2.06(a), however, beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.06(b), (c) or (f)
hereof. 
  
 (b) Transfer and Exchange of Beneficial Interests
in the Global Notes. The transfer and exchange of beneficial interests in the Global Notes will be effected through the Depositary, in accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial interests in the
Restricted Global Notes will be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Transfers of beneficial interests in the Global Notes also will require compliance with either
subparagraph (1) or (2) below, as applicable, as well as one or more of the other following subparagraphs, as applicable: 
  
 (1) Transfer of Beneficial Interests in the Same Global Note. Beneficial interests in any Restricted Global Note may be transferred
to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in the Private Placement Legend; provided, however, that prior to the
expiration of the Restricted Period, transfers of beneficial interests in the Regulation S Temporary Global Note may not be made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Beneficial interests
in any Unrestricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. No written orders or instructions shall be required to be delivered to the Registrar to
effect the transfers described in this Section 2.06(b)(1). 
  

 29 

 (2) All Other Transfers and Exchanges of Beneficial Interests in Global Notes. In
connection with all transfers and exchanges of beneficial interests that are not subject to Section 2.06(b)(1) above, the transferor of such beneficial interest must deliver to the Registrar either: 
  
 (A) both: 
  
 (i) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred
or exchanged; and 
  
 (ii) instructions given in
accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase; or 
  
 (B) both: 
  
 (i) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures
directing the Depositary to cause to be issued a Definitive Note in an amount equal to the beneficial interest to be transferred or exchanged; and 
  
 (ii) instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Note
shall be registered to effect the transfer or exchange referred to in (1) above; 
  
 provided that in no event shall Definitive Notes be issued upon the transfer or exchange of beneficial interests in the Regulation S Temporary Global Note prior to (A) the expiration of the Restricted Period
and (B) the receipt by the Registrar of any certificates required pursuant to Rule 903 or Rule 904 under the Securities Act. 
  
 Upon consummation of an Exchange Offer by the Issuers in accordance with Section 2.06(f) hereof, the requirements of this Section 2.06(b)(2) shall be deemed to have been
satisfied upon receipt by the Registrar of the instructions contained in the Letter of Transmittal delivered by the Holder of such beneficial interests in the Restricted Global Notes. Upon satisfaction of all of the requirements for transfer or
exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Note(s) pursuant to Section 2.06(h)
hereof. 
  
 (3) Transfer of Beneficial
Interests to Another Restricted Global Note. A beneficial interest in any Restricted Global Note may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.06(b)(2) above and the Registrar receives the following: 
  
 (A) if the transferee will take delivery in the form of a beneficial interest in the 144A Global Note, then the transferor must deliver a
certificate in the form of Exhibit C hereto, including the certifications in item (1) thereof; 
  

 30 

 (B) if the transferee will take delivery in the form of a beneficial interest in the
Regulation S Temporary Global Note or the Regulation S Permanent Global Note, then the transferor must deliver a certificate in the form of Exhibit C hereto, including the certifications in item (2) thereof; and 
  
 (C) if the transferee will take delivery in the form of a
beneficial interest in the IAI Global Note, then the transferor must deliver a certificate in the form of Exhibit C hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable. 
  
 (4) Transfer and Exchange of Beneficial Interests in a
Restricted Global Note for Beneficial Interests in an Unrestricted Global Note. A beneficial interest in any Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a
Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of Section 2.06(b)(2) above and: 
  
 (A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement and the holder of the beneficial interest to be transferred, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of
Transmittal that it is not (i) a Broker-Dealer, (ii) a Person participating in the distribution of the Exchange Notes or (iii) a Person who is an affiliate (as defined in Rule 144) of either Issuer; 
  
 (B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights Agreement; 
  
 (C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or 
  
 (D) the Registrar receives the following: 
  
 (i) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit D hereto, including the certifications in item (1)(a) thereof; or

  
 (ii) if the holder of such beneficial
interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit
B hereto, including the certifications in item (4) thereof; 
  
 and, in each such case set forth in this subparagraph (D), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act. 
  

 31 

 If any such transfer is effected pursuant to subparagraph (B) or (D) above at a time when an Unrestricted
Global Note has not yet been issued, the Issuers shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount
equal to the aggregate principal amount of beneficial interests transferred pursuant to subparagraph (B) or (D) above. 
  
 Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a
beneficial interest in a Restricted Global Note. 
  
 (c) Transfer
or Exchange of Beneficial Interests for Definitive Notes. 
  
 (1) Beneficial Interests in Restricted Global Notes to Restricted Definitive Notes. If any holder of a beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a
Restricted Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Restricted Definitive Note, then, upon receipt by the Registrar of the following documentation: 
  
 (A) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note, a certificate from such holder in the form of Exhibit D hereto, including the certifications in item (2)(a) thereof; 
  
 (B) if such beneficial interest is being transferred to a
QIB in accordance with Rule 144A, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof; 
  
 (C) if such beneficial interest is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule
904, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof; 
  
 (D) if such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in
accordance with Rule 144, a certificate to the effect set forth in Exhibit C hereto, including the certifications in item (3)(a) thereof; 
  
 (E) if such beneficial interest is being transferred to an Institutional Accredited Investor in reliance on an exemption from the
registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth in Exhibit C hereto, including the certifications, certificates and Opinion of Counsel required by
item (3) thereof, if applicable; 
  
 (F) if such
beneficial interest is being transferred to an Issuer or any of its Subsidiaries, a certificate to the effect set forth in Exhibit C hereto, including the certifications in item (3)(b) thereof; or 
  
 (G) if such beneficial interest is being transferred
pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in Exhibit C hereto, including the certifications in item (3)(c) thereof, 
  
 the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h)
hereof, and the Issuers shall execute and the Trustee shall 
  

 32 

 authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal
amount. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be registered in such name or names and in such authorized denomination or denominations as the holder of
such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall deliver such Definitive Notes to the Persons in whose names such Notes are so registered.
Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c)(1) shall bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein.

  
 (2) Beneficial Interests in Regulation S
Temporary Global Note to Definitive Notes. Notwithstanding Sections 2.06(c)(1)(A) and (C) hereof, a beneficial interest in the Regulation S Temporary Global Note may not be exchanged for a Definitive Note or transferred to a Person who takes
delivery thereof in the form of a Definitive Note prior to (A) the expiration of the Restricted Period and (B) the receipt by the Registrar of any certificates required pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act, except in the case
of a transfer pursuant to an exemption from the registration requirements of the Securities Act other than Rule 903 or Rule 904. 
  
 (3) Beneficial Interests in Restricted Global Notes to Unrestricted Definitive Notes. A holder of a beneficial interest in a
Restricted Global Note may exchange such beneficial interest for an Unrestricted Definitive Note or may transfer such beneficial interest to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note only if: 
  
 (A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement and the holder of such beneficial interest, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is
not (i) a Broker-Dealer, (ii) a Person participating in the distribution of the Exchange Notes or (iii) a Person who is an affiliate (as defined in Rule 144) of either Issuer; 
  
 (B) such transfer is effected pursuant to the Shelf Registration Statement in accordance with the
Registration Rights Agreement; 
  
 (C) such
transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or 
  
 (D) the Registrar receives the following: 
  
 (i) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for an
Unrestricted Definitive Note, a certificate from such holder in the form of Exhibit D hereto, including the certifications in item (1)(b) thereof; or 
  
 (ii) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who
shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (4) thereof; 
  

 33 

 and, in each such case set forth in this subparagraph (D), if the Registrar so requests or if the
Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and
in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act. 
  
 (4) Beneficial Interests in Unrestricted Global Notes to Unrestricted Definitive Notes. If any holder of a beneficial interest in
an Unrestricted Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon satisfaction of the
conditions set forth in Section 2.06(b)(2) hereof, the Trustee will cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Issuers will execute and the Trustee will
authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(4) will be registered in
such name or names and in such authorized denomination or denominations as the holder of such beneficial interest requests through instructions to the Registrar from or through the Depositary and the Participant or Indirect Participant. The Trustee
will deliver such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(4) will not bear the Private Placement Legend.

  
 Transfers and exchanges of Global Notes for Definitive Notes
pursuant to this Section 2.06(c) shall be made if, and only if, such transfer or exchange is permitted pursuant to Section 2.06(a) hereof. 
  
 (d) Transfer and Exchange of Definitive Notes for Beneficial Interests. 
  
 (1) Restricted Definitive Notes to Beneficial Interests in Restricted Global Notes. If any Holder of
a Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note or to transfer such Restricted Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in a
Restricted Global Note, then, upon receipt by the Registrar of the following documentation: 
  
 (A) if the Holder of such Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note,
a certificate from such Holder in the form of Exhibit D hereto, including the certifications in item (2)(b) thereof; 
  
 (B) if such Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A, a certificate to the effect set forth
in Exhibit C hereto, including the certifications in item (1) thereof; 
  
 (C) if such Restricted Definitive Note is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate to the effect set forth in Exhibit C hereto, including
the certifications in item (2) thereof; 
  
 (D)
if such Restricted Definitive Note is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(a) thereof; 
  

 34 

 (E) if such Restricted Definitive Note is being transferred to an Institutional
Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth in Exhibit C hereto, including the
certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable; 
  
 (F) if such Restricted Definitive Note is being transferred to an Issuer or any of its Subsidiaries, a certificate to the effect set forth
in Exhibit C hereto, including the certifications in item (3)(b) thereof; or 
  
 (G) if such Restricted Definitive Note is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in Exhibit C hereto, including the
certifications in item (3)(c) thereof, 
  
 the Trustee will
cancel the Restricted Definitive Note, increase or cause to be increased the aggregate principal amount of, in the case of clause (A) above, the appropriate Restricted Global Note, in the case of clause (B) above, the 144A Global Note, in the case
of clause (C) above, the Regulation S Global Note, and in all other cases, the IAI Global Note. 
  
 (2) Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if: 

 
 (A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (i) a Broker-Dealer, (ii)
a Person participating in the distribution of the Exchange Notes or (iii) a Person who is an affiliate (as defined in Rule 144) of the Issuers; 
  
 (B) such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement;

  
 (C) such transfer is effected by a
Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or 
  
 (D) the Registrar receives the following: 
  
 (i) if the Holder of such Definitive Notes proposes to exchange such Notes for a beneficial interest in the Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit D hereto, including the certifications in item (1)(c) thereof; or 
  
 (ii) if the Holder of such Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of a
beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (4) thereof; 
  

 35 

 and, in each such case set forth in this subparagraph (D), if the Registrar so requests or if the
Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and
in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act. 
  
 Upon satisfaction of the conditions of any of the subparagraphs in this Section 2.06(d)(2), the Trustee will cancel the Definitive Notes
and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Note. 
  
 (3) Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note
may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note at any time. Upon receipt of
a request for such an exchange or transfer, the Trustee will cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Notes. 
  
 If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (2)(B), (2)(D) or (3) above at a time when an Unrestricted Global Note has not yet been issued, the Issuers will issue and, upon receipt of an Authentication Order in accordance with Section
2.02 hereof, the Trustee will authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of Definitive Notes so transferred. 
  
 (e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon request by a Holder of Definitive Notes and
such Holder’s compliance with the provisions of this Section 2.06(e), the Registrar will register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange, the requesting Holder must present or surrender
to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such Holder or by its attorney, duly authorized in writing. In addition, the requesting
Holder must provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.06(e). 
  
 (1) Restricted Definitive Notes to Restricted Definitive Notes. Any Restricted Definitive Note may be
transferred to and registered in the name of Persons who take delivery thereof in the form of a Restricted Definitive Note if the Registrar receives the following: 
  
 (A) if the transfer will be made pursuant to Rule 144A, then the transferor must deliver a certificate in
the form of Exhibit C hereto, including the certifications in item (1) thereof; 
  
 (B) if the transfer will be made pursuant to Rule 903 or Rule 904, then the transferor must deliver a certificate in the form of Exhibit C
hereto, including the certifications in item (2) thereof; and 
  
 (C) if the transfer will be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver a certificate in the form of Exhibit C hereto, including the
certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable. 
  

 36 

 (2) Restricted Definitive Notes to Unrestricted Definitive Notes. Any Restricted
Definitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Note if: 
  
 (A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (i) a Broker-Dealer, (ii)
a Person participating in the distribution of the Exchange Notes or (iii) a Person who is an affiliate (as defined in Rule 144) of the Issuers; 
  
 (B) any such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement;

  
 (C) any such transfer is effected by a
Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or 
  
 (D) the Registrar receives the following: 
  
 (i) if the Holder of such Restricted Definitive Notes proposes to exchange such Notes for an Unrestricted Definitive Note, a certificate
from such Holder in the form of Exhibit D hereto, including the certifications in item (1)(d) thereof; or 
  
 (ii) if the Holder of such Restricted Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the
form of an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (4) thereof; 
  
 and, in each such case set forth in this subparagraph (D), if the Registrar so requests, an Opinion of Counsel in form reasonably acceptable to the
Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with
the Securities Act. 
  
 (3) Unrestricted
Definitive Notes to Unrestricted Definitive Notes. A Holder of Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note. Upon receipt of a request to register
such a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the Holder thereof. 
  
 (f) Exchange Offer. Upon the occurrence of the Exchange Offer in accordance with the Registration Rights Agreement, the Issuers will issue and,
upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee will authenticate: 
  
 (1) one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of the beneficial interests in
the Restricted Global Notes accepted for exchange in the Exchange Offer by Persons that certify in the applicable Letters of Transmittal that (A) they are not Broker-Dealers, (B) they are not participating in a distribution of the Exchange Notes and
(C) they are not affiliates (as defined in Rule 144) of the Issuers; and 
  

 37 

 (2) Unrestricted Definitive Notes in an aggregate principal amount equal to the principal
amount of the Restricted Definitive Notes accepted for exchange in the Exchange Offer by Persons that certify in the applicable Letters of Transmittal that (A) they are not Broker-Dealers, (B) they are not participating in a distribution of the
Exchange Notes and (C) they are not affiliates (as defined in Rule 144) of the Issuers. 
  
 Concurrently with the issuance of such Notes, the Trustee will cause the aggregate principal amount of the applicable Restricted Global Notes to be reduced accordingly, and the Issuers will execute and the Trustee
will authenticate and deliver to the Persons designated by the Holders of Definitive Notes so accepted Unrestricted Definitive Notes in the appropriate principal amount. 
  
 (g) Legends. The following legends will appear on the face of all Global Notes and Definitive Notes issued under this
Indenture unless specifically stated otherwise in the applicable provisions of this Indenture. 
  
 (1) Private Placement Legend. 
  
 (A) Except as permitted by subparagraph (B) below, each Global Note and each Definitive Note (and all Notes issued in exchange therefor or
substitution thereof) shall bear the legend in substantially the following form: 
  
 “THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR
THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) (A “QIB”), (B) IT IS NOT A U.S. PERSON, IS NOT ACQUIRING THIS NOTE FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER
THE SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL “ACCREDITED INVESTOR” (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN “IAI”), (2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD
REFERRED TO UNDER RULE 144(k) (TAKING INTO ACCOUNT THE PROVISIONS OF RULE 144(d) UNDER THE SECURITIES ACT, IF APPLICABLE) UNDER THE SECURITIES ACT AS IN EFFECT ON THE DATE OF THE TRANSFER OF THIS NOTE, RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT
(A) TO THE ISSUERS OR ANY SUBSIDIARY THEREOF, (B) TO A PERSON WHOM THE HOLDER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER,
FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE REGISTRATION OF TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN
AGGREGATE PRINCIPAL AMOUNT OF NOTES AT THE TIME OF TRANSFER OF LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUERS THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH APPLICABLE 
  

 38 

 STATE SECURITIES LAWS, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE OR ANY INTEREST HEREIN WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF
RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF
REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS.” 
  
 (B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraphs (b)(4), (c)(3), (c)(4), (d)(2), (d)(3), (e)(2), (e)(3) or (f) of this Section 2.06 (and all Notes issued in exchange therefor or substitution thereof) will not bear the Private Placement Legend.

  
 (2) Global Note Legend. Each Global
Note will bear a legend in substantially the following form: 
  
 “THIS
GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE
TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS GLOBAL NOTE MAY BE DELIVERED
TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUERS. 
  
 UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE
MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR
A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE ISSUERS OR THEIR AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS
MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.”

  

 39 

 (3) Regulation S Temporary Global Note Legend. The Regulation S Temporary Global
Note will bear a Legend in substantially the following form: 
  
 “THE RIGHTS
ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS
REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON.” 
  
 (h) Cancellation and/or Adjustment of Global Notes. At such time as all beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note will be returned to or retained and canceled by the Trustee in accordance with Section 2.11 hereof. At any time
prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal
amount of Notes represented by such Global Note will be reduced accordingly and an endorsement will be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial
interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note will be increased accordingly and an endorsement will be made on such
Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase. 
  
 (i) General Provisions Relating to Transfers and Exchanges. 
  
 (1) To permit registrations of transfers and exchanges, the Issuers will execute and the Trustee will authenticate Global Notes and
Definitive Notes upon receipt of an Authentication Order in accordance with Section 2.02 hereof or at the Registrar’s request. 
  
 (2) No service charge will be made to a Holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Issuers may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge
payable upon exchange or transfer pursuant to Sections 2.10, 3.06, 3.09, 4.10, 4.15 and 9.05 hereof). 
  
 (3) The Registrar will not be required to register the transfer of or exchange of any Note selected for redemption in whole or in part,
except the unredeemed portion of any Note being redeemed in part. 
  
 (4) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes will be the valid obligations of the Issuers, evidencing the same debt, and entitled
to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange. 
  
 (5) Neither the Registrar nor the Issuers will be required: 
  
 (A) to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening
of business 15 days before the day of any selection of Notes for redemption under Section 3.02 hereof and ending at the close of business on the day of selection; 
  
 (B) to register the transfer of or to exchange any Note selected for redemption in whole or in part, except
the unredeemed portion of any Note being redeemed in part; or 
  

 40 

 (C) to register the transfer of or to exchange a Note between a record date and the next
succeeding interest payment date. 
  
 (6) Prior
to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Issuers may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of
principal of and interest on such Notes and for all other purposes, and none of the Trustee, any Agent or the Issuers shall be affected by notice to the contrary. 
  
 (7) The Trustee will authenticate Global Notes and Definitive Notes in accordance with the provisions of
Section 2.02 hereof. 
  
 (8) All certifications,
certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.06 to effect a registration of transfer or exchange may be submitted by facsimile. 
  
 (9) None of the Trustee or any Agent shall have any
responsibility or obligation to any beneficial owner in a Global Note, a member of, or a participant in the Depository or other Person with respect to the accuracy of the records of the Depository or its nominee or of any participant or member
thereof, with respect to any ownership interest in the Notes or with respect to the delivery to any participant, member, beneficial owner or other Person (other than the Depository) of any notice (including any notice of redemption) or the payment
of any amount, under or with respect to such Notes. All notices and communications to be given to the Holders and all payments to be made to Holders under the Notes shall be given or made only to or upon the order of the registered Holders (which
shall be the Depository or its nominee in the case of Global Notes). The rights of beneficial owners in the Global Notes shall be exercised only through the Depository subject to the applicable rules and procedures of the Depository. The Trustee,
any Paying Agent and the Registrar may rely and shall be fully protected in relying upon information furnished by the Depository with respect to its members, participants and any beneficial owners. The Trustee, each Paying Agent and the Registrar
shall be entitled to deal with any depositary (including the Depository), and any nominee thereof, that is the Holder of any Global Note for all purposes of this Indenture relating to such Global Note (including the payment of principal, premium, if
any, and interest and additional amounts, if any, and the giving of instructions or directions by or to the owner or holder of a beneficial ownership interest in such Global Note) as the sole Holder of such Global Note and shall have no obligations
to the beneficial owners thereof. None of the Trustee, any Paying Agent or the Registrar shall have any responsibility or liability for any acts or omissions of any such depositary with respect to such Global Note, for the records of any such
depositary, including records in respect of beneficial ownership interests in respect of any such Global Note, for any transactions between such depositary and any participant in such depositary or between or among any such depositary, any such
participant and/or any holder or owner of a beneficial interest in such Global Note or for any transfers of beneficial interests in any such Global Note. 
  
 The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed
under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Depository participants, members or beneficial owners in the Global Notes) other than to make any
required delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to
form with the express requirements hereof. 
  

 41 

 Section 2.07 Replacement Notes. 
  
 If any mutilated Note is surrendered to the Trustee or the Issuers and the
Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, the Issuers will issue and the Trustee, upon receipt of an Authentication Order, will authenticate a replacement Note if the Trustee’s requirements are
met. If required by the Trustee or the Issuers, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Issuers to protect the Issuers, the Trustee, any Agent and any authenticating agent from any
loss that any of them may suffer if a Note is replaced. The Issuers may charge for its expenses in replacing a Note, including reasonable fees and expenses of counsel and of the Trustee and its counsel. 
  
 Every replacement Note is an additional obligation of the Issuers and will be
entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder. 
  
 Section 2.08 Outstanding Notes. 
  
 The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation,
those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section 2.08 as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not cease to be
outstanding because the Issuers or an Affiliate of the Issuers holds the Note; however, Notes held by an Issuer or a Subsidiary of an Issuer shall not be deemed to be outstanding for purposes of Section 3.07(a) hereof. 
  
 If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a protected purchaser. 
  
 If the principal amount of any Note is considered paid under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.

  
 If the Paying Agent (other than MagnaChip or any of its
Subsidiaries or MagnaChip Semiconductor LLC or an Affiliate of any thereof) holds, on a redemption date or maturity date, money sufficient to pay Notes payable on that date, then on and after that date such Notes will be deemed to be no longer
outstanding and will cease to accrue interest. 
  
 Section 2.09 Treasury Notes. 
  
 In determining
whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Issuers or any Guarantor, or by any Person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Issuers or any Guarantor, will be considered as though not outstanding, except that for the purposes of determining whether the Trustee will be protected in relying on any such direction, waiver or consent, only
Notes that the Trustee knows are so owned will be so disregarded. 
  
 Section 2.10
Temporary Notes. 
  
 Until certificates representing Notes
are ready for delivery, the Issuers may prepare and the Trustee, upon receipt of an Authentication Order, will authenticate temporary Notes. Temporary Notes will be substantially in the form of certificated Notes but may have variations that the
Issuers considers appropriate for temporary Notes and as may be reasonably acceptable to the Trustee. Without unreasonable delay, the Issuers will prepare and the Trustee will authenticate definitive Notes in exchange for temporary Notes.

  

 42 

 Holders of temporary Notes will be entitled to all of the benefits of this Indenture. 
  
 Section 2.11 Cancellation. 
  
 The Issuers at any time may deliver Notes to the Trustee for cancellation.
The Registrar and Paying Agent will forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else will cancel all Notes surrendered for registration of transfer, exchange,
payment, replacement or cancellation and will destroy canceled Notes (subject to the record retention requirement of the Exchange Act). Certification of the disposition of all canceled Notes will be delivered to the Issuers upon request. The Issuers
may not issue new Notes to replace Notes that it has paid or that have been delivered to the Trustee for cancellation. 
  
 Section 2.12 Defaulted Interest. 
  
 If the Issuers default in a payment of interest on the Notes, it will pay the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Persons who are Holders on a subsequent special record date, in each case at the rate provided in the Notes and in Section 4.01 hereof. The Issuers will notify the Trustee in writing of the amount
of defaulted interest proposed to be paid on each Note and the date of the proposed payment. The Issuers will fix or cause to be fixed each such special record date and payment date; provided that no such special record date may be less than
10 days prior to the related payment date for such defaulted interest. At least 15 days before the special record date, the Issuers (or, upon the written request of the Issuers, the Trustee in the name and at the expense of the Issuers) will mail or
cause to be mailed to Holders a notice that states the special record date, the related payment date and the amount of such interest to be paid. 
  
 ARTICLE 3. 
 REDEMPTION AND PREPAYMENT

  
 Section 3.01 Notices to Trustee.

  
 If the Issuers elect to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, they must furnish to the Trustee, at least 30 days but not more than 60 days before a redemption date, an Officers’ Certificate setting forth: 
  
 (1) the clause of this Indenture pursuant to which the
redemption shall occur; 
  
 (2) the redemption
date; 
  
 (3) the principal amount of Notes to be
redeemed; and 
  
 (4) the redemption price.

  
 Section 3.02 Selection of Notes to Be
Redeemed or Purchased. 
  
 If less than all of the Notes are
to be redeemed or purchased in an offer to purchase at any time, the Trustee will select Notes for redemption or purchase on a pro rata basis unless otherwise required by law or applicable stock exchange requirements. 
  
 The Trustee will promptly notify the Issuers in writing of the Notes selected
for redemption or purchase and, in the case of any Note selected for partial redemption or purchase, the principal amount thereof to be redeemed or purchased. Notes and portions of Notes selected will be in amounts equal to 
  

 43 

 $1,000 or an integral multiple of $1,000 in excess of $1,000; except that if all of the Notes of a Holder are to be
redeemed or purchased, the entire outstanding amount of Notes held by such Holder, even if not a multiple of $1,000, shall be redeemed or purchased. Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes
called for redemption or purchase also apply to portions of Notes called for redemption or purchase. 
  
 Section 3.03 Notice of Redemption. 
  
 Subject to the provisions of Section 3.09 hereof, at least 30 days but not more than 60 days before a redemption date, the Issuers will mail or cause to
be mailed, by first class mail, a notice of redemption to each Holder whose Notes are to be redeemed at its registered address, except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in
connection with a defeasance of the Notes or a satisfaction and discharge of this Indenture pursuant to Articles 8 or 11, respectively, hereof. 
  
 The notice will identify the Notes to be redeemed and will state: 
  
 (1) the redemption date; 
  
 (2) the redemption price; 
  
 (3) if any Note is being redeemed in part, the portion of the principal amount of such Note to be redeemed
and that, after the redemption date upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion will be issued upon cancellation of the original Note; 
  
 (4) the name and address of the Paying Agent; 
  
 (5) that Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price; 
  
 (6) that, unless the Issuers default in making such redemption payment, interest on Notes called for redemption ceases to accrue on and after the redemption date; 
  
 (7) the paragraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for
redemption are being redeemed; and 
  
 (8) that
no representation is made as to the correctness or accuracy of the CUSIP or ISIN number, if any, listed in such notice or printed on the Notes. 
  
 At the Issuers’ request, the Trustee will give the notice of redemption in the Issuers’ name and at its expense; provided, however, that
the Issuers have delivered to the Trustee, at least 45 days prior to the redemption date, an Officers’ Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the
preceding paragraph. 
  
 Section 3.04 Effect
of Notice of Redemption. 
  
 Once notice of redemption is
mailed in accordance with Section 3.03 hereof, Notes called for redemption become irrevocably due and payable on the redemption date at the redemption price. A notice of redemption may not be conditional. 
  

 44 

 Section 3.05 Deposit of Redemption or Purchase Price. 
  
 One Business Day prior to the redemption or purchase date, the Issuers will
deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption or purchase price of and accrued interest and Liquidated Damages, if any, on all Notes to be redeemed or purchased on that date. The Trustee or the Paying Agent
will promptly return to the Issuers any money deposited with the Trustee or the Paying Agent by the Issuers in excess of the amounts necessary to pay the redemption or purchase price of, and accrued interest and Liquidated Damages, if any, on, all
Notes to be redeemed or purchased. 
  
 If the Issuers comply with
the provisions of the preceding paragraph, on and after the redemption or purchase date, interest will cease to accrue on the Notes or the portions of Notes called for redemption or purchase. If a Note is redeemed or purchased on or after an
interest record date but on or prior to the related interest payment date, then any accrued and unpaid interest shall be paid to the Person in whose name such Note was registered at the close of business on such record date. If any Note called for
redemption or purchase is not so paid upon surrender for redemption or purchase because of the failure of the Issuers to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the redemption or purchase date until
such principal is paid, and to the extent lawful on any interest not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof. 
  
 Section 3.06 Notes Redeemed or Purchased in Part. 
  
 Upon surrender of a Note that is redeemed or purchased in part, the Issuers
will issue and, upon receipt of an Authentication Order, the Trustee will authenticate for the Holder at the expense of the Issuers a new Note equal in principal amount to the unredeemed or unpurchased portion of the Note surrendered. 
  
 Section 3.07 Optional Redemption. 
  
 (a) At any time prior to December 15, 2007, MagnaChip may on any one or more
occasions redeem up to 35% of the aggregate principal amount of Notes issued under this Indenture (including any Additional Notes issued after the Issue Date) at a redemption price of 108% of the principal amount thereof, plus accrued and
unpaid interest and Liquidated Damages, if any, to the redemption date, with the net cash proceeds of one or more Public Equity Offerings or a contribution to MagnaChip’s common equity capital made with the net cash proceeds of a concurrent
Public Equity Offering of US LLC or any of its Subsidiaries; provided that: 
  
 (1) at least 65% of the aggregate principal amount of Notes originally issued under this Indenture (including any Additional Notes issued
after the Issue Date) (excluding Notes held by MagnaChip and its Subsidiaries) remains outstanding immediately after the occurrence of such redemption; and 
  
 (2) the redemption occurs within 90 days of the date of the closing of such Public Equity Offering or equity contributions. 
  
 (b) On or after December 15, 2009, MagnaChip may redeem all or a part of the
Notes, upon not less than 30 nor more than 60 days’ prior notice mailed by first-class mail to each holder’s registered address, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued
and unpaid interest and Liquidated Damages, if any, on the Notes redeemed, to the applicable redemption date, if redeemed during the twelve-month period beginning on December 15 of the years indicated below, subject to the rights of holders of Notes
on the relevant record date to receive interest due on the relevant interest payment date: 
  

				
	 Year

	  	Percentage

	 
	 2009
	  	104.000	%
	 2010
	  	102.667	%
	 2011
	  	101.333	%
	 2012 and thereafter
	  	100.000	%

  

 45 

 Notwithstanding the foregoing, at any time prior to December 15, 2009, MagnaChip may also redeem all or a
part of the Notes (including any Additional Notes issued after the Issue Date), upon not less than 30 nor more than 60 days’ prior notice mailed by first-class mail to each holder’s registered address, at a redemption price equal to 100%
of the principal amount of Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest and Liquidated Damages, if any, to the redemption date, subject to the rights of holders of Notes on the relevant record date to
receive interest due on the relevant interest payment date. 
  
 Unless MagnaChip defaults in the payment of the redemption price, interest will cease to accrue on the Notes or portions thereof called for redemption on the applicable redemption date. 
  
 (c) Any redemption pursuant to this Section 3.07 shall be made pursuant to
the provisions of Sections 3.01 through 3.06 hereof. 
  
 Section 3.08 Mandatory Redemption. 
  
 The
Issuers are not required to make mandatory redemption or sinking fund payments with respect to the Notes. 
  
 Section 3.09 Offer to Purchase by Application of Excess Proceeds. 
  
 In the event that, pursuant to Section 4.10 hereof, the Issuers are required to commence an offer to all Holders to purchase
Notes (an “Asset Sale Offer”), it will follow the procedures specified below. 
  
 The Asset Sale Offer shall be made to all Holders and all holders of other pari passu Indebtedness containing provisions similar to those set forth in this Indenture with respect to offers to purchase or redeem
with the proceeds of sales of assets casualty or condemnation events. The Asset Sale Offer will remain open for a period of at least 20 Business Days following its commencement and not more than 30 Business Days, except to the extent that a longer
period is required by applicable law (the “Offer Period”). No later than three Business Days after the termination of the Offer Period (the “Purchase Date”), the Issuers will apply all Excess Proceeds remaining
after any required application of such Excess Proceeds (such remaining amount, the “Offer Amount”) to the purchase of Notes and such other pari passu Indebtedness (on a pro rata basis, if applicable) or, if less than
the Offer Amount has been tendered, all Notes and other pari passu Indebtedness tendered in response to the Asset Sale Offer. Payment for any Notes so purchased will be made in the same manner as interest payments are made. 
  
 If the Purchase Date is on or after an interest record date and on or before
the related interest payment date, any accrued and unpaid interest and Liquidated Damages, if any, will be paid to the Person in whose name a Note is registered at the close of business on such record date, and no additional interest will be payable
to Holders who tender Notes pursuant to the Asset Sale Offer. 
  
 Upon the commencement of an Asset Sale Offer, the Issuers will send, by first class mail, a notice to the Trustee and each of the Holders, with a copy to the Trustee. The notice will contain all instructions and materials necessary to
enable such Holders to tender Notes pursuant to the Asset Sale Offer. The notice, which will govern the terms of the Asset Sale Offer, will state: 
  
 (1) that the Asset Sale Offer is being made pursuant to this Section 3.09 and Section 4.10 hereof and the length of time the Asset Sale
Offer will remain open; 
  

 46 

 (2) the Offer Amount, the purchase price and the Purchase Date; 
  
 (3) that any Note not tendered or accepted for payment will
continue to accrue interest; 
  
 (4) that, unless
the Issuers default in making such payment, any Note accepted for payment pursuant to the Asset Sale Offer will cease to accrue interest after the Purchase Date; 
  
 (5) that Holders electing to have a Note purchased pursuant to an Asset Sale Offer may elect to have Notes
purchased in integral multiples of $1,000 only; 
  
 (6) that Holders electing to have Notes purchased pursuant to any Asset Sale Offer will be required to surrender the Note, with the form entitled “Option of Holder to Elect Purchase” attached to the Notes completed, or transfer by
book-entry transfer, to the Issuers, a Depositary, if appointed by the Issuers, or a Paying Agent at the address specified in the notice at least three days before the Purchase Date; 
  
 (7) that Holders will be entitled to withdraw their election if the Issuers, the Depositary or the Paying
Agent, as the case may be, receives, not later than the expiration of the Offer Period, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and
a statement that such Holder is withdrawing his election to have such Note purchased; 
  
 (8) that, if the aggregate principal amount of Notes or other pari passu Indebtedness surrendered by holders thereof exceeds the
Offer Amount, the Issuers will select the Notes and other pari passu Indebtedness to be purchased on a pro rata basis based on the principal amount of Notes and such other pari passu Indebtedness surrendered (with such
adjustments as may be deemed appropriate by the Issuers so that only Notes in denominations of $1,000, or integral multiples thereof, will be purchased); and 
  

(9) that Holders whose Notes were purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion
of the Notes surrendered (or transferred by book-entry transfer). 
  
 On or before the Purchase Date, the Issuers will, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Offer Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer, or if
less than the Offer Amount has been tendered, all Notes tendered, and will deliver or cause to be delivered to the Trustee the Notes properly accepted with an Officers’ Certificate stating that such Notes or portions thereof were accepted for
payment by the Issuers in accordance with the terms of this Section 3.09. The Issuers, the Depositary or the Paying Agent, as the case may be, will promptly (but in any case not later than five days after the Purchase Date) mail or deliver to each
tendering Holder an amount equal to the purchase price of the Notes tendered by such Holder and accepted by the Issuers for purchase, and the Issuers will promptly issue a new Note, and the Trustee, upon written request from the Issuers, will
authenticate and mail or deliver (or cause to be transferred by book entry) such new Note to such Holder, in a principal amount equal to any unpurchased portion of the Note surrendered. Any Note not so accepted shall be promptly mailed or delivered
by the Issuers to the Holder thereof. The Issuers will publicly announce the results of the Asset Sale Offer on the Purchase Date. 
  

 47 

 Other than as specifically provided in this Section 3.09, any purchase pursuant to this Section 3.09
shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof. 
  
 Section 3.10 Redemption for Changes in Taxes. The Issuers may redeem the Notes, in whole but not in part, at their discretion at any time at a redemption price equal to the principal amount thereof, together with accrued and unpaid
interest and Liquidated Damages, if any, to the date fixed by the Issuers for redemption (a “Tax Redemption Date”) and all Additional Amounts (if any) then due and which will become due on the Tax Redemption Date as a result of the
redemption or otherwise (subject to the right of Holders on the relevant record date to receive interest due on the relevant Interest Payment Date and Additional Amounts (if any) in respect thereof), if on the next date on which any amount would be
payable in respect of the Notes, the Issuers have or would be required to pay Additional Amounts, and the Issuers cannot avoid any such payment obligation taking reasonable measures available to them, as a result of: 
  
 (1) any change in, or amendment to, the laws or treaties (or
any regulations, or rulings promulgated thereunder) of the relevant Tax Jurisdiction affecting taxation which change or amendment has not been publicly announced as formally adopted and which becomes effective on or after the Issue Date (or, if the
relevant Tax Jurisdiction has changed since the Issue Date, the date on which the then current Tax Jurisdiction became the applicable Tax Jurisdiction under this Indenture); or 
  
 (2) any change in, or amendment to, the existing official position or the introduction of an official
position regarding the application, administration or interpretation of such laws, treaties, regulations or rulings (including a holding, judgment or order by a court of competent jurisdiction or a change in published practice), which change,
amendment, application or interpretation has not been publicly announced as formally adopted and becomes effective on or after the Issue Date (or, if the relevant Tax Jurisdiction has changed since the Issue Date, the date on which the then current
Tax Jurisdiction became the applicable Tax Jurisdiction under this Indenture). 
  
 The Issuers will not give any such notice of redemption earlier than 90 days prior to the earliest date on which the Issuers would be obligated to make such payment or withholding if a payment in respect of the Notes
were then due. Prior to the publication or, where relevant, mailing of any notice of redemption of the Notes pursuant to the foregoing, the Issuers will deliver the Trustee an opinion of counsel, the choice of such counsel to be subject to the prior
written approval of the Trustee (such approval not to be unreasonably withheld) to the effect that there has been such change or amendment which would entitle the Issuers to redeem the Notes hereunder and the Issuers cannot avoid any obligation to
pay Additional Amounts taking reasonable measures available. 
  
 ARTICLE 4. 
 COVENANTS 
  
 Section 4.01 Payment of Notes. 
  
 The Issuers will pay or cause to be paid the principal of, premium, if any, and interest and Liquidated Damages, if any, on, the Notes on the dates and in
the manner provided in the Notes. Principal, premium, if any, and interest and Liquidated Damages, if any will be considered paid on the date due if the Paying Agent, if other than MagnaChip or any Subsidiary thereof, holds as of 10:00 a.m. Eastern
Time on the due date money deposited by the Issuers in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and interest then due. The Issuers will pay all Liquidated Damages, if any, in the same
manner on the dates and in the amounts set forth in the Registration Rights Agreement. 
  

 48 

 The Issuers will pay interest (including post-petition interest in any proceeding under any Bankruptcy
Law) on overdue principal at the rate equal to 1% per annum in excess of the then applicable interest rate on the Notes to the extent lawful; it will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue installments of interest and Liquidated Damages (without regard to any applicable grace period) at the same rate to the extent lawful. 
  
 Section 4.02 Maintenance of Office or Agency. 
  
 The Issuers will maintain in the Borough of Manhattan, the City of New York, an office or agency (which may be an office of
the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Issuers in respect of the Notes and this Indenture may be
served. The Issuers will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Issuers fail to maintain any such required office or agency or fails to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee. 
  
 The Issuers may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission will in any manner relieve the Issuers of their obligation to maintain an office or agency in the Borough of Manhattan,
the City of New York for such purposes. The Issuers will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. 
  
 The Issuers hereby designate the Corporate Trust Office of the Trustee as one
such office or agency of the Issuers in accordance with Section 2.03 hereof. 
  
 Section 4.03 Reports. 
  
 (a) Whether or not required by the rules and regulations of the SEC, so long as any Notes are outstanding, MagnaChip will furnish to the Holders of Notes and the Initial Purchasers or cause to be furnished to the Holders of Notes and the
Initial Purchasers, within the time periods specified in the SEC’s rules and regulations: 
  
 (1) all quarterly and annual reports that would be required to be filed with the SEC on Forms 10-Q and 10-K if MagnaChip were required to
file such reports; and 
  
 (2) all current
reports that would be required to be filed with the SEC on Form 8-K if MagnaChip were required to file such reports. 
  
 All such reports will be prepared in all material respects in accordance with all of the rules and regulations applicable to such reports. Each annual
report on Form 10-K will include a report on US LLC’s consolidated financial statements by US LLC’s certified independent accountants. In addition, following the consummation of the Exchange Offer contemplated by the Registration Rights
Agreement, MagnaChip will file a copy of each of the reports referred to in clauses (1) and (2) above with the SEC for public availability within the time periods specified in the rules and regulations applicable to such reports (unless the SEC will
not accept such a filing) and will post the reports on its website within those time periods. US LLC’s reporting obligations with respect to clauses (1) and (2) above shall be deemed satisfied in the event the Issuers file such reports with the
SEC on EDGAR and deliver a copy of such reports to the Trustee. 
  

 49 

 If, at any time after consummation of the Exchange Offer contemplated by the Registration Rights
Agreement, MagnaChip is no longer subject to the periodic reporting requirements of the Exchange Act for any reason, MagnaChip will nevertheless continue filing the reports specified in the preceding paragraphs of this covenant with the SEC within
the time periods specified above unless the SEC will not accept such a filing. MagnaChip will not take any action for the purpose of causing the SEC not to accept any such filings. If, notwithstanding the foregoing, the SEC will not accept
MagnaChip’s filings for any reason, MagnaChip will post the reports referred to in the preceding paragraphs on its website within the time periods that would apply if MagnaChip were required to file those reports with the SEC. 
  
 (b) In addition, MagnaChip and the Guarantors agree that, for so long as any
Notes remain outstanding, if at any time they are not required to file with the SEC the reports required by the preceding paragraphs, they will furnish to the Holders of Notes and to securities analysts and prospective investors, upon their request,
the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act. 
  
 (c) The Issuers shall file with the Trustee, within 15 days after the date that the Issuers are required to file same with the SEC, copies of all reports, information and documents which the Issuers are required to
file with the SEC pursuant to Section 314(a) of the TIA. Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of same shall not constitute constructive notice of any
information contained therein or determinable from information contained therein, including the Issuers’ compliance with any of their covenants hereunder (as to the which the Trustee is entitled to rely exclusively on Officers’
Certificates). 
  
 Section 4.04 Compliance
Certificate. 
  
 (a) The Issuers and each Guarantor (to the
extent that such Guarantor is so required under the TIA) shall deliver to the Trustee, within 90 days after the end of each fiscal year, an Officers’ Certificate stating that a review of the activities of the Issuers and its Subsidiaries during
the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Issuers have kept, observed, performed and fulfilled its obligations under this Indenture, and further stating, as to each
such Officer signing such certificate, that to the best of their knowledge the Issuers have kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions of this Indenture (or, if a Default or Event of Default has occurred, describing all such Defaults or Events of Default of which he or she may have knowledge and what action the Issuers are taking or propose to
take with respect thereto) and that to the best of his or her knowledge no event has occurred and remains in existence by reason of which payments on account of the principal of or interest, if any, on the Notes is prohibited or if such event has
occurred, a description of the event and what action the Issuers are taking or propose to take with respect thereto. 
  
 (b) So long as not contrary to the then current recommendations of the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03 above shall be accompanied by a written statement of MagnaChip’s independent public accountants (who shall be a firm of established national reputation) that in making the examination necessary for
certification of such financial statements, nothing has come to their attention that would lead them to believe that MagnaChip has violated any provisions of Article 4 or Article 5 hereof or, if any such violation has occurred, specifying the nature
and period of existence thereof, it being understood that such accountants shall not be liable directly or indirectly to any Person for any failure to obtain knowledge of any such violation. 
  

 50 

 (c) So long as any of the Notes are outstanding, the Issuers will deliver to the Trustee, forthwith upon
any Officer becoming aware of any Default or Event of Default, an Officers’ Certificate specifying such Default or Event of Default and what action the Issuers are taking or propose to take with respect thereto. 
  
 Section 4.05 Taxes. 
  
 The Issuers will pay, and will cause each of their Subsidiaries and
MagnaChip Semiconductor LLC to pay, prior to delinquency, all material taxes, assessments, and governmental levies except such as are contested in good faith and by appropriate proceedings or where the failure to effect such payment is not adverse
in any material respect to the Holders of the Notes. 
  
 Section 4.06 Stay, Extension and Usury Laws. 
  
 The Issuers and each of the Guarantors covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury
law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Issuers and each of the Guarantors (to the extent that they may lawfully do so) hereby expressly waive all
benefit or advantage of any such law, and covenants that they will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as
though no such law has been enacted. 
  
 Section
4.07 Restricted Payments. 
  
 (a) MagnaChip will not, and
will not permit any of its Restricted Subsidiaries to, directly or indirectly: 
  
 (1) declare or pay any dividend or make any other payment or distribution on account of MagnaChip’s or any of its Restricted
Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving MagnaChip or any of its Restricted Subsidiaries) or to the direct or indirect holders of MagnaChip’s or any
of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends, payments, or distributions payable in Equity Interests (other than Disqualified Stock) of MagnaChip, any of its direct or indirect parent entities
or any of its Restricted Subsidiaries and other than dividends, payments, or distributions payable to MagnaChip, any of its direct or indirect parent entities or a Restricted Subsidiary of MagnaChip); 
  
 (2) purchase, redeem or otherwise acquire or retire for
value (including, without limitation, in connection with any merger or consolidation involving MagnaChip) any Equity Interests of US LLC; 
  
 (3) make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness of
MagnaChip or any Restricted Subsidiary that is contractually subordinated to the Notes or to any Note Guarantee (excluding any intercompany Indebtedness between or among MagnaChip, any of its direct or indirect parent entities and any of its
Restricted Subsidiaries), except a payment of interest or principal at the Stated Maturity thereof; or 
  

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 (4) make any Restricted Investment (all such payments and other actions set forth in
these clauses (1) through (4) above being collectively referred to as “Restricted Payments”), 
  
 unless, at the time of and after giving effect to such Restricted Payment: 
  
 (1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such
Restricted Payment; 
  
 (2) MagnaChip would, at
the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a) hereof; and 
  
 (3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by MagnaChip and its Restricted
Subsidiaries since the Issue Date (excluding Restricted Payments permitted by clauses (2), (5), (6), (8), (9), (10) and (11) of paragraph (b) of this Section 4.07), is less than the sum, without duplication of: 
  
 (A) 50% of the Consolidated Net Income of US LLC for the
period (taken as one accounting period) from the beginning of the first fiscal quarter commencing after the Issue Date to the end of US LLC’s most recently ended fiscal quarter for which internal financial statements are available at the time
of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit); plus 
  
 (B) 100% of the aggregate net cash proceeds or Fair Market Value of assets (as to which an opinion or appraisal issued by an accounting,
appraisal or investment bank firm of national standing shall be required if the Fair Market Value exceeds $15.0 million) received by MagnaChip or any of the Restricted Subsidiaries since the Issue Date as a contribution to its common equity capital
or from the issue or sale of Equity Interests of MagnaChip or any of the Restricted Subsidiaries (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt
securities of MagnaChip or any of the Restricted Subsidiaries that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of US LLC); plus

  
 (C) to the extent that any Restricted
Investment that was made after the Issue Date is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the
initial amount of such Restricted Investment; plus 
  
 (D) to the extent that any Unrestricted Subsidiary of MagnaChip designated as such after the Issue Date is redesignated as a Restricted Subsidiary after the Issue Date, the lesser of (i) the Fair Market Value of
MagnaChip’s Investment in such Subsidiary as of the date of such redesignation or (ii) such Fair Market Value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary after the Issue Date; plus

  
 (E) 100% of any dividends received by
MagnaChip or a Restricted Subsidiary of MagnaChip after the Issue Date from an Unrestricted Subsidiary of US LLC, to the extent that such dividends were not otherwise included in the Consolidated Net Income of US LLC for such period. 
  

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 (b) The provisions of Section 4.07(a) hereof will not prohibit: 
  
 (1) the payment of any dividend or the consummation of any
irrevocable redemption within 60 days after the date of declaration of the dividend or giving of the redemption notice, as the case may be, if at the date of declaration or notice, the dividend or redemption payment would have complied with the
provisions of this Indenture; 
  
 (2) dividends
or advances made with the proceeds of the Notes to any direct or indirect parent of MagnaChip, the proceeds of which are used by such Person to redeem its preferred equity interests as described in the offering memorandum and made within 90 days of
the Issue Date; provided, that such dividends or advances shall be excluded from the calculation of the amount of Restricted Payments; 
  
 (3) upon the occurrence of a Change of Control and within 60 days after the completion of the offer to repurchase the Notes pursuant to
Section 4.15 hereof, any purchase or redemption of Subordinated Obligations required pursuant to the terms thereof as a result of such Change of Control at a purchase or redemption price not to exceed the outstanding principal amount thereof,
plus any accrued and unpaid interest; provided, however, that (A) at the time of such purchase or redemption no Event of Default shall have occurred and be continuing (or would result therefrom); (B) MagnaChip would be able to incur an
additional $1.00 of Indebtedness pursuant to Section 4.09(a) hereof after giving pro forma effect to such Restricted Payment and the Change of Control; and (C) such purchase or redemption shall be included in the calculation of the amount of
Restricted Payments; 
  
 (4) any purchase or
redemption of Disqualified Stock of MagnaChip or a Restricted Subsidiary made by exchange for, or out of the proceeds of the substantially concurrent sale of, Disqualified Stock of MagnaChip or a Restricted Subsidiary which is permitted to be
incurred pursuant to Section 4.09 hereof; provided, however, that such purchase or redemption shall be excluded in the calculation of the amount of Restricted Payments; 
  
 (5) the making of any Restricted Payment in exchange for, or out of the net cash proceeds of the
substantially concurrent sale (other than to a Subsidiary of MagnaChip) of, Equity Interests of MagnaChip (other than Disqualified Stock) or from the substantially concurrent contribution of common equity capital to MagnaChip; provided that
the amount of any such net cash proceeds that are utilized for any such Restricted Payment will be excluded from clause (3)(B) of the first paragraph of Section 4.07(a); 
  
 (6) the repurchase, redemption, defeasance or other acquisition or retirement for value of Indebtedness of
MagnaChip or any Restricted Subsidiary that is contractually subordinated to the Notes or to any Note Guarantee with the net cash proceeds from a substantially concurrent incurrence of Permitted Refinancing Indebtedness; 
  
 (7) payments to fund the repurchase, redemption or other
acquisition or retirement for value of any Equity Interests of MagnaChip, any Restricted Subsidiary of MagnaChip, or any direct or indirect parent of MagnaChip held by any current or former officer, director or employee of MagnaChip or any of its
Restricted Subsidiaries or any direct or indirect Parent of MagnaChip pursuant to any equity subscription agreement, stock option agreement, shareholders’ agreement or similar agreement; provided that the aggregate price paid for all
such repurchased, redeemed, 
  

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 acquired or retired Equity Interests may not exceed $7,000,000 plus the amount of cash proceeds
from any key man life insurance; provided, further, that such amount may be increased by an amount not to exceed the cash proceeds from the sale of Equity Interests of MagnaChip and, to the extent contributed to MagnaChip, Equity
Interests of any of MagnaChip’s direct or indirect parent corporations, in each case to current or former members of management, directors, managers or consultants of MagnaChip, any of its Subsidiaries or any of its direct or indirect parent
corporations that occurs after the Issue Date, to the extent the cash proceeds from the sale of such Equity Interests have not otherwise been applied to the payment of Restricted Payments by virtue of clause (3)(B) of the first paragraph of Section
4.07(a); 
  
 (8) the repurchase of Equity
Interests deemed to occur upon the exercise of stock options to the extent such Equity Interests represent a portion of the exercise price of those stock options; 
  
 (9) the declaration and payment of regularly scheduled or accrued dividends to holders of any class or
series of Disqualified Stock of MagnaChip or any Restricted Subsidiary issued on or after the Issue Date in accordance with the Fixed Charge Coverage Ratio test set forth in Section 4.09(a) hereof; 
  
 (10) any purchase or redemption of Subordinated Obligations
from Net Proceeds upon completion of an Asset Sale Offer; provided, however, that the purchase or redemption shall be excluded in the calculation of the amount of Restricted Payments; provided, further, that MagnaChip could, on
the date of such transaction after giving pro forma effect thereto as if the same had occurred at the beginning of the applicable four-quarter period, be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in Section 4.09(a) hereof; 
  
 (11) Permitted Tax Payments; 
  
 (12) the repurchase of, or payments in lieu of, fractional shares of Equity Interests in an amount not to exceed $200,000 in the aggregate; and 
  
 (13) other Restricted Payments in an aggregate amount not to exceed $15.0 million since the Issue Date.

  
 The amount of all Restricted Payments (other than cash) will
be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by MagnaChip or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The Fair Market
Value of any assets or securities that are required to be valued by this Section 4.07 will be determined by the Board of Directors of MagnaChip whose resolution with respect thereto will be delivered to the Trustee. For purposes of determining
compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the exceptions described in (1) through (13) above or is entitled to be made pursuant to Section 4.07(a), MagnaChip shall be permitted,
in its sole discretion to classify (but not later reclassify) such Restricted Payment in any manner that complies with this Section 4.07. 
  
 Section 4.08 Dividend and Other Payment Restrictions Affecting Subsidiaries. 
  
 (a) MagnaChip will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or permit
to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary to: 
  
 (1) pay dividends or make any other distributions on its Capital Stock to MagnaChip or any of its Restricted Subsidiaries, or with respect
to any other interest or participation in, or measured by, its profits, or pay any indebtedness owed to MagnaChip or any of its Restricted Subsidiaries; 
  

 54 

 (2) make loans or advances to MagnaChip or any of its Restricted Subsidiaries; or

  
 (3) sell, lease or transfer any of its
properties or assets to MagnaChip or any of its Restricted Subsidiaries. 
  
 (b) The restrictions in Section 4.08(a) hereof will not apply to encumbrances or restrictions existing under or by reason of: 
  

(1) agreements governing Existing Indebtedness and any other agreements, including the Senior Credit Agreement, as in effect on the
Issue Date and any amendments, restatements, modifications, renewals, increases, supplements, refundings, replacements or refinancings of those agreements; provided that the amendments, restatements, modifications, renewals, increases,
supplements, refundings, replacements or refinancings are not materially more restrictive, taken as a whole, with respect to such dividend and other payment restrictions than those contained in those agreements on the Issue Date; 
  
 (2) this Indenture, the Notes and the Note Guarantees, the
Second Priority Notes, and the intercreditor agreement and security documents with respect to the Second Priority Notes; 
  
 (3) applicable law, rule, regulation or order; 
  

(4) any instrument governing Indebtedness or Capital Stock of a Person acquired by MagnaChip or any of its Restricted Subsidiaries as
in effect at the time of such acquisition (except to the extent such Indebtedness or Capital Stock was incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired; provided that, in the case of Indebtedness, such Indebtedness was permitted by the terms of this Indenture to be incurred;

  
 (5) customary non-assignment provisions in
contracts and licenses entered into in the ordinary course of business; 
  
 (6) purchase money obligations for property acquired in the ordinary course of business and Capital Lease Obligations that impose restrictions on the property purchased or leased of the nature described in clause (3)
of Section 4.08(a); 
  
 (7) any agreement for the
sale or other disposition of a Restricted Subsidiary that restricts distributions by that Restricted Subsidiary pending the sale or other disposition; 
  
 (8) Permitted Refinancing Indebtedness; provided that the restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are not materially more restrictive, taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced; 
  

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 (9) restrictions contained in security agreements or mortgages securing Indebtedness of a
Restricted Subsidiary permitted to be incurred under this Indenture so long as the restrictions solely restrict the transfer of the property governed by the security agreements or mortgages; 
  
 (10) Liens permitted to be incurred under the provisions of
Section 4.12 hereof that limit the right of the debtor to dispose of the assets subject to such Liens; 
  
 (11) provisions limiting the disposition or distribution of assets or property in joint venture agreements, asset sale agreements,
sale-leaseback agreements, stock sale agreements and other similar agreements entered into with the approval of MagnaChip’s Board of Directors, which limitation is applicable only to the assets that are the subject of such agreements;

  
 (12) restrictions on cash or other deposits
or net worth imposed by customers under contracts entered into in the ordinary course of business; and 
  
 (13) any restriction in any agreement that is not more restrictive than the restrictions under the terms of the Senior Credit Agreement as
in effect on the Issue Date. 
  
 Section 4.09 Incurrence of Indebtedness and
Issuance of Preferred Stock. 
  
 (a) MagnaChip will not, and
will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively,
“incur”) any Indebtedness (including Acquired Debt), and MagnaChip and US LLC will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries (other than US LLC) to issue any shares of preferred stock;
provided, however, that MagnaChip and US LLC may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed
Charge Coverage Ratio for US LLC’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock
or such preferred stock is issued, as the case may be, would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the
Disqualified Stock or the preferred stock had been issued, as the case may be, at the beginning of such four-quarter period. 
  
 (b) The provisions of Section 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively,
“Permitted Debt”): 
  
 (1) the
incurrence by MagnaChip and any Restricted Subsidiary of additional revolving credit Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of
credit being deemed to have a principal amount equal to the maximum potential liability of MagnaChip and its Restricted Subsidiaries thereunder) not to exceed the greater of (x) $100.0 million or (y) as of the date of the incurrence, the aggregate
of (i) 85% of the book value, net of reserves, of all accounts receivable owned by MagnaChip and its Restricted Subsidiaries, as shown on US LLC’s most recent consolidated balance sheet prepared in accordance with GAAP, as of the end of the
most recent fiscal quarter preceding such date, plus (ii) 50% of the book value of all inventory, net of reserves, owned by MagnaChip and its Restricted Subsidiaries, as shown on US LLC’s most recent consolidated balance sheet prepared
in accordance with GAAP, as of the end of the most recent fiscal quarter preceding such date, plus (iii) $20.0 million; less the aggregate amount of all Net Proceeds of Asset Sales applied by MagnaChip or any of the Restricted
Subsidiaries after the 
  

 56 

 Issue Date to repay any term Indebtedness under a Credit Facility or to repay any revolving credit
Indebtedness under a Credit Facility and effect a corresponding commitment reduction thereunder, in each case as to Indebtedness incurred under this clause (1) of the definition of Permitted Debt and as to Net Proceeds applied pursuant to Section
4.10(b)(1) hereof; 
  
 (2) the incurrence by
MagnaChip and any Restricted Subsidiary of up to $100.0 million under one or more debt facilities or commercial paper facilities, in each case, with banks or other institutional lenders providing for revolving credit loans, term loans, receivables
financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or letters of credit, in each case, as amended, restated, modified, renewed, refunded,
replaced (whether upon or after termination or otherwise) or refinanced (but not including by means of sales of debt securities to institutional investors) in whole or in part from time to time; less the aggregate amount of all Net Proceeds
of Asset Sales applied by MagnaChip or any of the Restricted Subsidiaries after the Issue Date to repay any term Indebtedness under debt facilities or commercial paper facilities or to repay any revolving credit Indebtedness under a Credit Facility
and effect a corresponding commitment reduction thereunder, in each case as to Indebtedness incurred under this clause (2) of the definition of Permitted Debt and as to Net Proceeds applied pursuant to Section 4.10(b)(1) hereof; 
  
 (3) the incurrence by MagnaChip and its Restricted
Subsidiaries of the Existing Indebtedness; 
  
 (4) the incurrence on the Issue Date by MagnaChip and the Restricted Subsidiaries of 
  
 (A) Indebtedness represented by the Notes and this Indenture and guarantees thereof by the Guarantors and the related Exchange Notes to be
issued pursuant to the Registration Rights Agreement; and 
  
 (B) Indebtedness represented by the Second Priority Notes and the Second Priority Notes Indenture and guarantees thereof by MagnaChip’s Restricted Subsidiaries and the related exchange notes to be issued pursuant
to the registration rights agreement with respect to the Second Priority Notes; 
  
 (5) the incurrence by MagnaChip or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage
financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property (real or personal), plant or equipment used
in the business of MagnaChip or any of its Restricted Subsidiaries (whether through the direct purchase of assets or the Equity interests of any Person owning such assets), in an aggregate principal amount, including all Permitted Refinancing
Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (5), not to exceed the greater of (a) $25.0 million at any time outstanding and (b) 5% of Total Assets as shown on US
LLC’s most recent consolidated balance sheet prepared in accordance with GAAP; 
  
 (6) the incurrence by MagnaChip or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net
proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (3), (4), (5), (6) or
(14) of this Section 4.09(b); 
  

 57 

 (7) the incurrence by MagnaChip or any of its Restricted Subsidiaries of intercompany
Indebtedness between or among MagnaChip and any of its Restricted Subsidiaries; provided, however, that: 
  
 (A) if MagnaChip or any Restricted Subsidiary is the obligor on such Indebtedness and the payee is not MagnaChip or a Restricted
Subsidiary, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of MagnaChip, or the Note Guarantee, in the case of a Guarantor; and 
  
 (B) (1) any subsequent issuance or transfer of Equity
Interests that results in any such Indebtedness being held by a Person other than MagnaChip or a Restricted Subsidiary of MagnaChip and (2) any sale or other transfer of any such Indebtedness to a Person that is not either MagnaChip or a Restricted
Subsidiary of MagnaChip, will be deemed, in each case, to constitute an incurrence of such Indebtedness by MagnaChip or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (7); 
  
 (8) the issuance by any Restricted Subsidiary to MagnaChip
or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that: 
  
 (A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than
MagnaChip or a Restricted Subsidiary; and 
  
 (B)
any sale or other transfer of any such preferred stock to a Person that is not either MagnaChip or a Restricted Subsidiary, 
  
 will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (8);

  
 (9) the incurrence by MagnaChip or any
Restricted Subsidiaries of Hedging Obligations in the ordinary course of business; 
  
 (10) the guarantee by MagnaChip or any Restricted Subsidiary of Indebtedness of MagnaChip or a Restricted Subsidiary that was permitted to
be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to
the same extent as the Indebtedness guaranteed; 
  
 (11) the incurrence of Indebtedness by MagnaChip or any of its Restricted Subsidiaries in the form of performance bonds, completion guarantees and surety or appeal bonds entered into by MagnaChip or any of its Restricted Subsidiaries in the
ordinary course of their business; 
  
 (12) the
incurrence of Indebtedness by MagnaChip or any of its Restricted Subsidiaries owed to any Person in connection with worker’s compensation, self-insurance, health, disability or other employee benefits or property, casualty or liability
insurance provided by such Person to MagnaChip or such Restricted Subsidiary, pursuant to reimbursement or indemnification obligations to such person, in each case incurred in the ordinary course of business; 
  

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 (13) the incurrence by MagnaChip or any of the Restricted Subsidiaries of Indebtedness
arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five business days; 
  
 (14) Indebtedness of MagnaChip or any Restricted Subsidiary
issued to any of its directors, employees, officers or consultants or a Restricted Subsidiary in connection with the redemption or purchase of Capital Stock that, by its terms, is subordinated to the Notes, is not secured by any of the assets of
MagnaChip or the Restricted Subsidiaries and does not require cash payments prior to the Stated Maturity of the Notes and Refinancing Indebtedness of the Indebtedness, in an aggregate principal amount which, when added with the amount of
Indebtedness Incurred under this clause (14) and then outstanding, does not exceed $5.0 million; 
  
 (15) the incurrence by MagnaChip or any of the Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or
accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (15), not to exceed $25.0
million; 
  
 (16) the incurrence of Indebtedness
by MagnaChip or any of the Restricted Subsidiaries arising from agreements of MagnaChip or any of the Restricted Subsidiaries providing for adjustment of purchase price or other similar obligations, in each case, incurred or assumed in connection
with the acquisition or disposition of any business, assets or a Restricted Subsidiary of MagnaChip LLC; 
  
 (17) Indebtedness of a Restricted Subsidiary organized outside the United States or Korea incurred to finance the working capital of such
Restricted Subsidiary, in an aggregate principal amount at any time outstanding not to exceed $30.0 million; and 
  
 (18) Indebtedness incurred by MagnaChip or any of the Restricted Subsidiaries constituting reimbursement obligations under letters of
credit issued in the ordinary course of business, including, without limitation, letters of credit to procure raw materials or relating to workers’ compensation claims or self-insurance, or other Indebtedness relating to reimbursement-type
obligations regarding workers’ compensation claims. 
  
 MagnaChip will not incur, and will not permit any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of MagnaChip or such Guarantor unless such
Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in
right of payment to any other Indebtedness of MagnaChip solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. 
  
 (c) For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness (or any portion thereof) meets the
criteria of more than one of the categories of Permitted Debt described in clauses (1) through (18) above, or is entitled to be incurred pursuant to Section 4.09(a), MagnaChip, in its sole discretion, will be permitted to classify such item of
Indebtedness (or any portion thereof) on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09 and will only be required to include the amount and type of
such Indebtedness in one of the above clauses. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of 
  

 59 

 additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in
accounting principles, and the payment of dividends on Disqualified Stock or preferred stock in the form of additional shares of the same class of Disqualified Stock or preferred stock, and the accrual of dividends on Disqualified Stock or preferred
stock, will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this Section 4.09; provided, in each such case, that the amount of any such accrual, accretion or payment is
included in Fixed Charges of US LLC as accrued. Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that MagnaChip or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to
be exceeded solely as a result of fluctuations in exchange rates or currency values. 
  
 (d) The amount of any Indebtedness outstanding as of any date will be: 
  
 (1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount; 
  
 (2) the principal amount of the Indebtedness, in the case of
any other Indebtedness; and 
  
 (3) in respect of
Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of: 
  
 (A) the Fair Market Value of such assets at the date of determination; and 
  
 (B) the amount of the Indebtedness of the other Person. 
  
 Section 4.10 Asset Sales. 
  
 (a) MagnaChip will not, and will not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless: 
  
 (1) MagnaChip (or the Restricted Subsidiary, as the case may be) receives consideration at the time of the Asset Sale at least equal to the Fair Market Value of the assets or Equity Interests issued or sold or otherwise disposed of; and

  
 (2) at least 75% of the consideration
received in the Asset Sale by MagnaChip or such Restricted Subsidiary is in the form of cash or Cash Equivalents. For purposes of this provision, each of the following will be deemed to be cash: 
  
 (A) any liabilities, as shown on US LLC’s most recent
consolidated balance sheet, of MagnaChip or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the Notes or any Note Guarantee) that are assumed by the transferee of any such assets
pursuant to a customary arrangement that releases MagnaChip or such Restricted Subsidiary from further liability; 
  
 (B) any securities, notes or other obligations received by MagnaChip or any such Restricted Subsidiary from such transferee that are
contemporaneously, subject to ordinary settlement periods, converted by MagnaChip or such Restricted Subsidiary into cash or Cash Equivalents, to the extent of the cash or Cash Equivalents received in that conversion; and 
  

 60 

 (C) any stock or assets of the kind referred to in Section 4.10(b)(2) or (4) hereof.

  
 (b) Within 365 days after the receipt of any Net Proceeds from
an Asset Sale, MagnaChip (or the applicable Restricted Subsidiary, as the case may be) may apply such Net Proceeds at its option: 
  
 (1) to repay Senior Debt and, if the Senior Debt repaid is revolving credit Indebtedness, to correspondingly reduce commitments with
respect thereto; 
  
 (2) to acquire all or
substantially all of the assets of, or any Capital Stock of, a Person engaged in a Permitted Business, if, after giving effect to any such acquisition of Capital Stock, the Permitted Business is or becomes a Restricted Subsidiary of US LLC;

  
 (3) to make a capital expenditure;

  
 (4) to acquire other assets that are not
classified as current assets under GAAP and that are used or useful in a Permitted Business; or 
  
 (5) any combination of (1) – (4) of this Section 4.10(b). 
  
 In the case of clauses (2) and (4) MagnaChip will also comply with its obligations above if it enters into a binding
commitment to acquire such assets or Capital Stock within the required time frame above, provided that such binding commitment shall be subject only to customary conditions and such acquisition shall be consummated within six months from the date of
signing such binding commitment. Pending the final application of any Net Proceeds pursuant to this paragraph, MagnaChip and the Restricted Subsidiaries may apply such Net Proceeds to temporarily reduce Indebtedness outstanding under a revolving
credit facility or otherwise invest such Net Proceeds in any manner that is not prohibited by this Indenture. 
  
 (c) Any Net Proceeds from Asset Sales that are not applied or invested as provided in the second and third paragraphs of this Section 4.10 will constitute
“Excess Proceeds.” When the aggregate amount of Excess Proceeds exceeds $10 million, within 30 days thereof, MagnaChip will make an Asset Sale Offer to all holders of Notes and all holders of other Indebtedness that is pari
passu with the Notes containing provisions similar to those set forth in this Indenture with respect to offers to purchase or redeem with the proceeds of sales of assets to purchase the maximum principal amount of Notes and such other pari
passu Indebtedness that may be purchased out of the Excess Proceeds. The offer price in any Asset Sale Offer will be equal to 100% of the principal amount plus accrued and unpaid interest and Liquidated Damages, if any, to the date of
purchase (or, in respect of such other pari passu Indebtedness of MagnaChip, such lesser price, if any, as may be provided for by the terms of such pari passu Indebtedness), and will be payable in cash. If any Excess Proceeds remain
after consummation of an Asset Sale Offer, MagnaChip may use those Excess Proceeds for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount of Notes and other pari passu Indebtedness tendered into such
Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee will select the Notes and such other pari passu Indebtedness to be purchased on a pro rata basis. Upon completion of each Asset Sale Offer, the amount of Excess Proceeds will
be reset at zero. 
  
 (d) MagnaChip will comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with each repurchase of Notes pursuant to an Asset Sale Offer. To the
extent that the provisions of any securities laws or regulations conflict with the provisions of Section 3.09 hereof or this section 4.10, MagnaChip will comply with the Asset Sale provisions of this Indenture, MagnaChip will comply with the
applicable securities laws and regulations and will not be deemed to have breached its obligations under Section 3.09 hereof or this Section 4.10 by virtue of such compliance. 
  

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 Section 4.11 Transactions with Affiliates. 
  
 (a) MagnaChip will not, and will not permit any of its Restricted Subsidiaries to, make any payment to, or sell, lease,
transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of,
any Affiliate of MagnaChip (each, an “Affiliate Transaction”), unless: 
  
 (1) the Affiliate Transaction is on terms that are no less favorable to MagnaChip or the relevant Restricted Subsidiary than those that
would have been obtained in a comparable transaction by MagnaChip or such Restricted Subsidiary with an unrelated Person; and 
  
 (2) MagnaChip delivers to the Trustee: 
  
 (A) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of
$10.0 million, a resolution of the Board of Directors of MagnaChip set forth in an Officers’ Certificate certifying that such Affiliate Transaction complies with this Section 4.11(a) and that such Affiliate Transaction has been approved by a
majority of the disinterested members of the Board of Directors of MagnaChip; and 
  
 (B) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of
$20.0 million, an opinion by (A) a nationally recognized investment banking firm that such Affiliate Transaction is fair, from a financial standpoint, to MagnaChip and the Restricted Subsidiaries or (B) an accounting or appraisal firm nationally
recognized in making determinations of this kind that such Affiliate Transaction is on terms that are not less favorable to MagnaChip and the Restricted Subsidiaries than the terms that could be obtained in an arms-length transaction from a Person
that is not an Affiliate. 
  
 (b) The following items will not be
deemed to be Affiliate Transactions and, therefore, will not be subject to the provisions of Section 4.11(a) hereof: 
  
 (1) any employment agreement, employee benefit plan, stock options, stock ownership plans, officer or director indemnification agreement
or any similar arrangement entered into by MagnaChip or any of its Restricted Subsidiaries in the ordinary course of business and payments pursuant thereto; 
  
 (2) transactions between or among MagnaChip and/or the Restricted Subsidiaries; 
  
 (3) transactions with a Person (other than an Unrestricted
Subsidiary of MagnaChip) that is an Affiliate of MagnaChip solely because MagnaChip owns, directly or through a Restricted Subsidiary, an Equity Interest in, or controls, such Person; 
  
 (4) payment of reasonable directors’ fees; 
  
 (5) any issuance of Equity Interests (other than
Disqualified Stock) of US LLC or any of its Subsidiaries to Affiliates of such Person; 
  

 62 

 (6) Restricted Payments that do not violate Section 4.07 hereof; 
  
 (7) transactions pursuant to any contract or agreement with
MagnaChip or any of the Restricted Subsidiaries in effect on the Issue Date, as the same may be amended, modified or replaced from time to time so long as any such amendment, modification or replacement is not less favorable in any material respect
to MagnaChip and the Restricted Subsidiaries than the original agreement as in effect on the Issue Date; 
  
 (8) the Note Guarantees; 
  
 (9) transactions pursuant to or under the Securityholders’ Agreement, The MagnaChip LLC Equity Incentive Plan, the Restricted Unit
Agreements or Option Agreements as in effect on the Issue Date or any similar agreement or any amendment, modification or replacement of the Securityholders’ Agreement, The MagnaChip LLC Equity Incentive Plan, the Restricted Unit Agreements or
the Option Agreements or similar agreement; provided that the terms of such amendment, modification or replacement are not more disadvantageous to the holders of the Notes in any material respect than the terms contained in the Securityholders’
Agreement, The MagnaChip LLC Equity Incentive Plan, the Restricted Unit Agreements or the Option Agreements, as the case may be, as in effect on the Issue Date; 
  
 (10) the payment of management, consulting and advisory fees and related expenses made pursuant to the
Advisory Agreements and the payment of other customary management, consulting and advisory fees and related expenses to the Principals and any of their respective Affiliates in connection with transactions of US LLC or its Subsidiaries or pursuant
to any management, consulting, financial advisory, financing, underwriting or placement agreement or in respect of other investment banking activities, including in connection with acquisitions or divestitures, which fees and expenses are made
pursuant to arrangements approved by the Board of Directors of US LLC or such Subsidiary in good faith; 
  
 (11) the provision by an Affiliate of commercial banking or lending services or other similar services on terms that are no less favorable
to MagnaChip or the relevant Restricted Subsidiary than those that would have been obtained by an unaffiliated party and that are approved in good faith by the Board of Directors; 
  
 (12) loans or advances to employees, directors, officers or consultants (i) in the ordinary course of
business or (ii) otherwise not to exceed $5.0 million in the aggregate at any one time outstanding; and 
  
 (13) Permitted Tax Payments. 
  
 Section 4.12 Liens. 
  
 MagnaChip will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly create, incur, assume or suffer to exist any Lien of
any kind on any asset now owned or hereafter acquired, except Permitted Liens. 
  
 Section 4.13 Business Activities. 
  
 MagnaChip
will not, and will not permit any of its Restricted Subsidiaries to, engage in any business other than Permitted Businesses, except to such extent as would not be material to MagnaChip and its Restricted Subsidiaries taken as a whole. 
  

 63 

 Section 4.14 Corporate Existence. 
  
 Subject to Article 5 hereof, the Issuers shall do or cause to be done all things necessary to preserve and keep in full
force and effect: 
  
 (1) its corporate
existence, and the corporate, partnership or other existence of each of, MagnaChip Semiconductor LLC and its Subsidiaries, in accordance with the respective organizational documents (as the same may be amended from time to time) of the Issuers or
any such Subsidiary; and 
  
 (2) the rights
(charter and statutory), licenses and franchises of the Issuers and its Subsidiaries; provided, however, that the Issuers shall not be required to preserve any such right, license or franchise, or the corporate, partnership or other existence
of any of, MagnaChip Semiconductor LLC and its Subsidiaries, if the Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Issuers, MagnaChip Semiconductor LLC and its
Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any material respect to the Holders of the Notes. 
  
 Section 4.15 Offer to Repurchase Upon Change of Control. 
  
 (a) If a Change of Control occurs, the Issuers will make an offer (a “Change of Control Offer”) to each Holder to repurchase all or any
part (equal to $1,000 or an integral multiple of $1,000 in excess of $1,000) of that Holder’s Notes at a purchase price in cash equal to 101% of the aggregate principal amount of Notes repurchased plus accrued and unpaid interest and
Liquidated Damages, if any, on the Notes repurchased to the date of purchase, subject to the rights of Holders on the relevant record date to receive interest due on the relevant interest payment date (the “Change of Control
Payment”). Within 30 days following any Change of Control, the Issuers will mail a notice to each Holder describing the transaction or transactions that constitute the Change of Control and stating: 
  
 (1) that the Change of Control Offer is being made pursuant
to this Section 4.15 and that all Notes tendered will be accepted for payment; 
  
 (2) the purchase price and the purchase date, which shall be no earlier than 30 days and no later than 60 days from the date such notice
is mailed (the “Change of Control Payment Date”); 
  
 (3) that any Note not tendered will continue to accrue interest; 
  
 (4) that, unless the Issuers defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the
Change of Control Offer will cease to accrue interest and Liquidated Damages after the Change of Control Payment Date; 
  
 (5) that Holders electing to have any Notes purchased pursuant to a Change of Control Offer will be required to surrender the Notes, with
the form entitled “Option of Holder to Elect Purchase” attached to the Notes completed, or transfer by book-entry transfer, to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day
preceding the Change of Control Payment Date; 
  
 (6) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the close of business on the second Business Day preceding the Change of Control Payment Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal amount of Notes delivered for purchase, and a statement that such Holder is withdrawing his election to have the Notes purchased; and 
  

 64 

 (7) that Holders whose Notes are being purchased only in part will be issued new Notes
equal in principal amount to the unpurchased portion of the Notes surrendered, which unpurchased portion must be equal to $1,000 in principal amount or an integral multiple thereof. 
  
 The Issuers will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and
regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the Notes as a result of a Change in Control. To the extent that the provisions of any securities laws or regulations conflict with
the provisions of Sections 3.09 or 4.15 hereof, the Issuers will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under Section 3.09 hereof or this Section 4.15 by virtue of such
compliance. 
  
 (b) On the Change of Control Payment Date, the
Issuers will, to the extent lawful: 
  
 (1)
accept for payment all Notes or portions of Notes properly tendered pursuant to the Change of Control Offer; 
  
 (2) deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions of Notes properly
tendered; and 
  
 (3) deliver or cause to be
delivered to the Trustee the Notes properly accepted together with an Officers’ Certificate stating the aggregate principal amount of Notes or portions of Notes being purchased by the Issuers. 
  
 The Paying Agent will promptly mail to each Holder of Notes properly tendered
the Change of Control Payment for such Notes, and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if
any. MagnaChip will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date. 
  
 (c) Prior to complying with any of the provisions of this Section 4.15, but in any event within 90 days following a Change of Control, the Issuers will
either repay all outstanding Senior Debt or obtain the requisite consents, if any, under all agreements governing outstanding Senior Debt to permit the repurchase of Notes required by this Section 4.15. 
  
 (d) Notwithstanding anything to the contrary in this Section 4.15, the
Issuers will not be required to make a Change of Control Offer upon a Change of Control if (1) a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Section
4.15 and Section 3.09 hereof and purchases all Notes properly tendered and not withdrawn under the Change of Control Offer, or (2) notice of redemption has been given pursuant to Section 3.07 hereof, unless and until there is a default in payment of
the applicable redemption price. 
  
 Section 4.16 Additional Amounts.

  
 (a) All payments made by the Issuers under or with respect to
the Notes or any of the Guarantors on its Guarantee will be made without withholding or deduction for, or on account of, any present or future Taxes unless the withholding or deduction of such Taxes is then required by law. If any deduction or
withholding for, or on account of, any Taxes imposed or levied by or on behalf of any 
  

 65 

 jurisdiction in which the Issuers or any Guarantor (including any successor entity), is then incorporated, engaged in
business or resident for tax purposes or any political subdivision thereof or therein or any jurisdiction by or through which payment is made (each, a “Tax Jurisdiction”), will at any time be required to be made from or Taxes
imposed directly on any Holder or beneficial owner of the Notes on any payments made by the Issuers under or with respect to the Notes or any of the Guarantors with respect to any Guarantee, including payments of principal, redemption price,
purchase price, interest or premium, the Issuers or the relevant Guarantor, as applicable, will pay such additional amounts (the “Additional Amounts”) as may be necessary in order that the net amounts received in respect of such
payments by each Holder (including Additional Amounts) after such withholding or deduction will equal the respective amounts which would have been received in respect of such payments in the absence of such withholding, deduction or imposition;
provided, however, that no Additional Amounts will be payable with respect to: 
  
 (1) any Tax imposed by the United States or by any political subdivision or taxing authority thereof or therein; 
  
 (2) any Taxes which would not have been imposed but for any
present or former connection between the Holder or the beneficial owner of the Notes, such as being a citizen or resident or national of, incorporated in or carrying on a business, and the relevant Taxing Jurisdiction in which such Taxes are imposed
(other than by the mere holding of such note or enforcement of rights thereunder or the receipt of payments in respect thereof) or any other connection arising as a result of the holding of the Notes; 
  
 (3) any Taxes that are imposed or withheld as a result of
the failure of the Holder or beneficial owner of the Notes to comply with any written request, made to that Holder or beneficial owner in writing at least 30 days before any such withholding or deduction would be payable, by the Issuers or any of
the Guarantors or any other Person through whom payment may be made to provide timely or accurate information concerning the nationality, residence or identity of such Holder or beneficial owner or to make any valid or timely declaration or similar
claim or satisfy any certification information or other reporting requirement, which is required or imposed by a statute, treaty, regulation or administrative practice of the relevant Tax Jurisdiction as a precondition to exemption from all or part
of such Taxes; 
  
 (4) any Note presented for
payment (where a Note is in the form of a definitive Note and presentation is required) more than 30 days after the relevant payment is first made available for payment to the Holder (except to the extent that the Holder would have been entitled to
Additional Amounts had the note been presented on the last day of such 30 day period); 
  
 (5) any estate, inheritance, gift, sale, transfer, personal property or similar tax or assessment; 
  
 (6) any Taxes withheld, deducted or imposed on a payment to
an individual and which are required to be made pursuant to European Council Directive 2003/48/EC or any other directive implementing the conclusions of the ECOFIN Council meeting of 26 and 27 November 2000 on the taxation of savings income or any
law implementing or complying with or introduced in order to conform to, such Directive; or 
  
 (7) any combination of items (1) through (6) above. 
  
 (b) The Issuers and the Guarantors will also pay and indemnify the holder for any present or future stamp, issue,
registration, transfer, court or documentary taxes, or any other excise or property 
  

 66 

 taxes, charges or similar levies or Taxes which are levied by any jurisdiction in which the Issuers or any Guarantor
(including any successor entity) is then incorporated, engaged in business or resident for tax purposes or any political subdivision thereof or therein on the execution, delivery, registration or enforcement of any of the Notes, this Indenture, any
Guarantee, or any other document or instrument referred to therein, or the receipt of any payments with respect to the Notes or the Guarantees. 
  
 (c) If either Issuer or any Guarantor, as the case may be, becomes aware that it will be obligated to pay Additional Amounts with respect to any payment
under or with respect to the Notes or any Guarantee, the relevant Issuer or the relevant Guarantor, as the case may be, will deliver to the Trustee on a date which is at least 30 days prior to the date of that payment (unless the obligation to pay
Additional Amounts arises after the 30th day prior to that payment date, in which case the relevant Issuer or the relevant Guarantor shall notify the Trustee promptly thereafter) an Officers’ Certificate stating the fact that Additional Amounts
will be payable and the amount estimated to be so payable. The Officers’ Certificate must also set forth any other information reasonably necessary to enable the Paying Agent to pay Additional Amounts to Holders on the relevant payment date.
The relevant Issuer or the relevant Guarantor will provide the Trustee with documentation reasonably satisfactory to the Trustee evidencing the payment of Additional Amounts. 
  
 (d) The relevant Issuer or the relevant Guarantor will make all withholdings and deductions required by law and will remit
the full amount deducted or withheld to the relevant Tax authority in accordance with applicable law. The relevant Issuer or the relevant Guarantor will use its reasonable efforts to obtain Tax receipts from each Tax authority evidencing the payment
of any Taxes so deducted or withheld. The relevant Issuer or the relevant Guarantor will furnish to the Holders, within 60 days after the date the payment of any Taxes so deducted or withheld is made, certified copies of Tax receipts evidencing
payment by the relevant Issuer or a Guarantor, as the case may be, or if, notwithstanding such entity’s efforts to obtain receipts, receipts are not obtained, other evidence of payments by such entity. 
  
 (e) Whenever in this Indenture there is mentioned, in any context, the
payment of amounts based upon the principal amount of the Notes or of principal, interest or of any other amount payable under, or with respect to, any of the Notes, such mention shall be deemed to include mention of the payment of Additional
Amounts to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof. 
  
 Section 4.17 [Reserved] 
  
 Section 4.18 [Reserved] 
  
 Section 4.19
Restriction on Activities of Finance Company. 
  
 Finance
Company will not hold any material assets, become liable for any material obligations or engage in any significant business activities; provided, that Finance Company may be a co-obligor or guarantor with respect to Indebtedness if MagnaChip
is an obligor on such Indebtedness and the net proceeds of such Indebtedness are received by MagnaChip, Finance Company or one or more Restricted Subsidiaries. 
  

Section 4.20 Payments for Consent. 
  
 MagnaChip will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration to or for
the benefit of any holder of Notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Notes unless such consideration is offered to be paid and is paid to all holders of the Notes
that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement. 
  

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 Section 4.21 Additional Note Guarantees. 
  
 If MagnaChip or any of its Restricted Subsidiaries acquires or creates another Subsidiary after the Issue Date, then that
newly acquired or created Subsidiary will become a Guarantor and execute a supplemental indenture and deliver an opinion of counsel satisfactory to the Trustee within 10 business days of the date on which it was acquired or created; provided
that any Subsidiary that constitutes an Immaterial Subsidiary need not become a Guarantor until such time as it ceases to be an Immaterial Subsidiary; provided, further, in the event MagnaChip or a Restricted Subsidiary forms or otherwise
acquires, directly or indirectly, a Subsidiary organized under the laws of a jurisdiction other than the United States and such jurisdiction prohibits by law, regulation or order such Subsidiary from becoming a Guarantor, MagnaChip shall use all
commercially reasonable efforts (including pursuing required waivers) over a period up to one year, to have such Subsidiary become a Guarantor; provided, however, that MagnaChip shall not be required to use such commercially reasonable
efforts with respect to such Subsidiaries for more than a one-year period or such shorter period as it shall determine in good faith that it has used all commercially reasonable efforts and if MagnaChip or such Subsidiary is unable during such
period to obtain an enforceable Guarantee in such jurisdiction, then such Subsidiary shall not be required to provide a Guarantee of the Notes pursuant to the Note Guarantee so long as such Subsidiary does not Guarantee any other Indebtedness of
MagnaChip and its Restricted Subsidiaries. The form of such Note Guarantee is attached as Exhibit E hereto. 
  
 Section 4.22 Designation of Restricted and Unrestricted Subsidiaries. 
  
 The Board of Directors of MagnaChip may designate any Restricted Subsidiary to be an Unrestricted Subsidiary if that designation would not cause a
Default; provided that in no event will the business currently operated by MagnaChip Semiconductor Ltd. be transferred to or held by an Unrestricted Subsidiary. If a Restricted Subsidiary is designated as an Unrestricted Subsidiary, the
aggregate Fair Market Value of all outstanding Investments owned by MagnaChip and its Restricted Subsidiaries in the Subsidiary designated as Unrestricted will be deemed to be an Investment made as of the time of the designation and will reduce the
amount available for Restricted Payments under Section 4.07 hereof or under one or more clauses of the definition of Permitted Investments, as determined by MagnaChip. That designation will only be permitted if the Investment would be permitted at
that time and if the Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. The Board of Directors of MagnaChip may redesignate any Unrestricted Subsidiary to be a Restricted Subsidiary if that redesignation would not
cause a Default. 
  
 Any designation of a Subsidiary of MagnaChip
as an Unrestricted Subsidiary will be evidenced to the Trustee by filing with the Trustee a certified copy of a resolution of the Board of Directors giving effect to such designation and an Officers’ Certificate certifying that such designation
complied with the preceding conditions and was permitted by Section 4.07 hereof. If, at any time, any Unrestricted Subsidiary would fail to meet the preceding requirements as an Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such Subsidiary will be deemed to be incurred by a Restricted Subsidiary of MagnaChip as of such date and, if such Indebtedness is not permitted to be incurred as of such date under
Section 4.09 hereof, MagnaChip will be in default of such Section. The Board of Directors of MagnaChip may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary of MagnaChip; provided that such designation will be
deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of MagnaChip of any outstanding Indebtedness of such Unrestricted Subsidiary, and such designation will only be permitted if (1) such Indebtedness is permitted under Section 4.09
hereof, calculated on a pro forma basis as if such designation had occurred at the beginning of the four-quarter reference period; and (2) no Default or Event of Default would be in existence and be continuing following such designation. 

 

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 Section 4.23 No Layering of Debt. 
  
 The Issuers will not incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is
contractually subordinate or junior in right of payment to any Senior Debt of the Issuers and senior in right of payment to the Notes. No Guarantor will incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is
contractually subordinate or junior in right of payment to the Senior Debt of such Guarantor and senior in right of payment to such Guarantor’s Note Guarantee. No such Indebtedness will be considered to be senior by virtue of being secured on a
first or junior priority basis. 
  
 ARTICLE 5. 

SUCCESSORS 
  
 Section 5.01 Merger, Consolidation, or Sale of Assets. 
  
 (a) MagnaChip will not, directly or indirectly: (1) consolidate or merge with or into another Person (whether or not MagnaChip is the surviving Person); or (2) sell, lease, assign, transfer, convey or otherwise
dispose of all or substantially all of the properties or assets of MagnaChip and its Restricted Subsidiaries taken as a whole, in one or more related transactions, to another Person, unless: 
  
 (1) either: (A) MagnaChip is the surviving Person; or (B)
the Person formed by or surviving any such consolidation or merger (if other than MagnaChip) or to which such sale, assignment, transfer, conveyance or other disposition has been made is a Person organized or existing under the laws of South Korea,
Luxembourg, the Netherlands, Bermuda, the United States, any state of the United States or the District of Columbia; 
  
 (2) the Person formed by or surviving any such consolidation or merger (if other than MagnaChip) or the Person to which such sale,
assignment, transfer, conveyance or other disposition has been made assumes all the obligations of MagnaChip under the Notes, this Indenture and the Registration Rights Agreement; 
  
 (3) immediately after such transaction, no Default or Event of Default shall have occurred and be
continuing; 
  
 (4) MagnaChip or the Person
formed by or surviving any such consolidation or merger (if other than MagnaChip), or to which such sale, assignment, transfer, conveyance or other disposition has been made would, on the date of such transaction after giving pro forma effect
thereto and any related financing transactions as if the same had occurred at the beginning of the applicable four-quarter period, be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set
forth in Section 4.09(a) hereof; 
  
 (5) if the
merging corporation is organized and existing under the laws of South Korea and the Successor Company is organized and existing under the laws of the United States of America, any State thereof or the District of Columbia or if the merging
corporation is organized and existing under the laws of the United States of America, any State thereof or the District of Columbia and the Successor Company is organized and existing under the laws of South Korea (any such event, a “Foreign
Jurisdiction Merger”), MagnaChip shall have delivered to the Trustee an opinion of counsel that the holders of Notes will not recognize income, gain or 
  

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 loss for U.S. federal income tax purposes as a result of the transaction and will be taxed in the same
manner and on the same amounts and at the same times as would have been the case if the transaction had not occurred; and 
  
 (6) in the event of a Foreign Jurisdiction Merger, MagnaChip shall have delivered to the Trustee an opinion of counsel from South Korea or
other applicable jurisdiction that (A) any payment of interest or principal under or relating to the Notes or the Note Guarantees will, after the consolidation, merger, conveyance, transfer or lease of assets, be exempt from Section 3.10 hereof and
(B) no other taxes on income, including capital gains, will be payable by holders of the Notes under the laws of South Korea or any other jurisdiction where the Successor Company is or becomes organized, resident or engaged in business for tax
purposes relating to the acquisition, ownership or disposition of the Notes, including the receipt of interest or principal thereon, provided that the holder does not use or hold, and is not deemed to use or hold the Notes in carrying on a
business in South Korea or other jurisdiction where the Successor Company is or becomes organized, resident or engaged in business for tax purposes. 
  
 Section 5.02 Successor Corporation Substituted. 
  
 Upon any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the properties
or assets of MagnaChip in a transaction that is subject to, and that complies with the provisions of, Section 5.01 hereof, the successor Person formed by such consolidation or into or with which MagnaChip is merged or to which such sale, assignment,
transfer, lease, conveyance or other disposition is made shall succeed to, and be substituted for (so that from and after the date of such consolidation, merger, sale, assignment, transfer, lease, conveyance or other disposition, the provisions of
this Indenture referring to the “Company” shall refer instead to the successor Person and not to MagnaChip), and may exercise every right and power of MagnaChip under this Indenture with the same effect as if such successor Person had been
named as MagnaChip herein; provided, however, that the predecessor MagnaChip shall not be relieved from the obligation to pay the principal of and interest on the Notes except in the case of a sale of all of MagnaChip’s assets in a
transaction that is subject to, and that complies with the provisions of, Section 5.01 hereof. 
  
 ARTICLE 6. 
 DEFAULTS AND REMEDIES 
  
 Section 6.01 Events of Default. 
  
 Each of the following is an “Event of Default”: 
  

(1) default for 30 days in the payment when due of interest on, or Liquidated Damages, if any, with respect to the Notes, whether or
not prohibited by the subordination provisions of this Indenture; 
  
 (2) default in the payment when due (at maturity, upon redemption or otherwise) of the principal of, or premium, if any, on, the Notes, whether or not prohibited by the subordination provisions of this Indenture;

  
 (3) failure by MagnaChip or any of its
Restricted Subsidiaries to comply with the provisions of Sections 4.10, 4.15 or 5.01 hereof; 
  
 (4) failure by MagnaChip or any of its Restricted Subsidiaries for 60 days after notice to MagnaChip by the Trustee or the Holders of at
least 25% in aggregate principal amount of the Notes then outstanding voting as a single class to comply with any of the other agreements in this Indenture; 
  

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 (5) default under any mortgage, indenture or instrument under which there may be issued
or guaranteed or by which there may be secured or evidenced any Indebtedness for money borrowed by MagnaChip or any of its Restricted Subsidiaries (or the payment of which is guaranteed by MagnaChip or any of its Restricted Subsidiaries), whether
such Indebtedness or Guarantee now exists, or is created after the Issue Date, if that default: 
  
 (A) is caused by a failure to pay principal of, or interest or premium, if any, on, such Indebtedness prior to the expiration of the grace
period provided in such Indebtedness on the date of such default (a “Payment Default”); or 
  
 (B) results in the acceleration of such Indebtedness prior to its express maturity, 
  
 and, in each case, the principal amount of any such Indebtedness, together
with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $25.0 million or more; 
  
 (6) failure by MagnaChip or any of its Restricted Subsidiaries to pay final judgments entered by a court or
courts of competent jurisdiction aggregating in excess of $25.0 million (net of any amounts covered by insurance), which judgments are not paid, discharged or stayed for a period of 60 days; 
  
 (7) MagnaChip or any of its Restricted Subsidiaries that is
a Significant Subsidiary or any group of Restricted Subsidiaries of MagnaChip that, taken together, would constitute a Significant Subsidiary pursuant to or within the meaning of Bankruptcy Law: 
  
 (A) commences a voluntary case, 
  
 (B) consents to the entry of an order for relief against it
in an involuntary case, 
  
 (C) consents to the
appointment of a custodian of it or for all or substantially all of its property, 
  
 (D) makes a general assignment for the benefit of its creditors, or 
  
 (E) generally is not paying its debts as they become due; 
  
 (8) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that: 
  
 (A) is
for relief against MagnaChip or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries of MagnaChip that, taken together, would constitute a Significant Subsidiary in an involuntary case;

  
 (B) appoints a custodian of MagnaChip or any
of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries of MagnaChip that, taken together, would constitute a Significant Subsidiary or for all or substantially all of the property of MagnaChip or any
of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries of MagnaChip that, taken together, would constitute a Significant Subsidiary; or 
  

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 (C) orders the liquidation of MagnaChip or any of its Restricted Subsidiaries that is a
Significant Subsidiary or any group of Restricted Subsidiaries of MagnaChip that, taken together, would constitute a Significant Subsidiary; 
  
 and the order or decree remains unstayed and in effect for 60 consecutive days; and 
  
 (9) except as permitted by this Indenture, any Note Guarantee is held in any judicial proceeding to be
unenforceable or invalid or ceases for any reason to be in full force and effect, or any Guarantor, or any Person acting on behalf of any Guarantor, denies or disaffirms its obligations under its Note Guarantee. 
  
 Section 6.02 Acceleration. 
  
 In the case of an Event of Default specified in clause (7) or (8) of Section
6.01 hereof, with respect to MagnaChip, any Restricted Subsidiary of MagnaChip that is a Significant Subsidiary or any group of Restricted Subsidiaries of MagnaChip that, taken together, would constitute a Significant Subsidiary, all outstanding
Notes will become due and payable immediately without further action or notice. If any other Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding may
declare all the Notes to be due and payable immediately. 
  
 Upon
any such declaration, the Notes shall become due and payable immediately. 
  
 The Holders of a majority in aggregate principal amount of the then outstanding Notes by written notice to the Trustee may, on behalf of all of the Holders, rescind an acceleration and its consequences, if the
rescission would not conflict with any judgment or decree and if all existing Events of Default (except nonpayment of principal, interest or premium or Liquidated Damages, if any, that has become due solely because of the acceleration) have been
cured or waived. 
  
 Section 6.03 Other Remedies. 
  
 If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of principal, premium and Liquidated Damages, if any, and interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture. 
  
 The Trustee may maintain a proceeding even if it does not possess any of the
Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of a Note in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or
acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law. 
  
 Section 6.04 Waiver of Past Defaults. 
  
 Holders of not less than a majority in aggregate principal amount of the then outstanding Notes by notice to the Trustee may on behalf of the Holders of all of the Notes waive an existing Default or Event of Default
and its consequences hereunder, except a continuing Default or Event of Default in the payment of the principal of, premium and Liquidated Damages, if any, or interest on, the Notes (including in connection with an offer to purchase); provided,
however, that the Holders of a majority in aggregate 
  

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 principal amount of the then outstanding Notes may rescind an acceleration and its consequences, including any related
payment default that resulted from such acceleration. Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver
shall extend to any subsequent or other Default or impair any right consequent thereon. 
  
 Section 6.05 Control by Majority. 
  
 Holders of
a majority in aggregate principal amount of the then outstanding Notes may direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee or exercising any trust or power conferred on it. However,
the Trustee may refuse to follow any direction that conflicts with law or this Indenture that the Trustee determines may be unduly prejudicial to the rights of other Holders of Notes or that may involve the Trustee in personal liability. 

 
 Section 6.06 Limitation on Suits. 
  
 Except to enforce the right to receive payment of principal, premium, if
any, or interest or Liquidated Damages, if any, when due, a Holder may pursue a remedy with respect to this Indenture or the Notes only if: 
  
 (1) such Holder gives to the Trustee written notice that an Event of Default is continuing; 
  
 (2) Holders of at least 25% in aggregate principal amount of
the then outstanding Notes make a written request to the Trustee to pursue the remedy; 
  
 (3) such Holder or Holders offer and, if requested, provide to the Trustee security or indemnity reasonably satisfactory to the Trustee
against any loss, liability or expense; 
  
 (4)
the Trustee does not comply with the request within 60 days after receipt of the request and the offer of security or indemnity; and 
  
 (5) during such 60-day period, Holders of a majority in aggregate principal amount of the then outstanding Notes do not give the Trustee a
direction inconsistent with such request. 
  
 A Holder of a Note
may not use this Indenture to prejudice the rights of another Holder of a Note or to obtain a preference or priority over another Holder of a Note. 
  
 Section 6.07 Rights of Holders of Notes to Receive Payment. 
  
 Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to receive payment of principal, premium and Liquidated Damages,
if any, and interest on the Note, on or after the respective due dates expressed in the Note (including in connection with an offer to purchase), or to bring suit for the enforcement of any such payment on or after such respective dates, shall not
be impaired or affected without the consent of such Holder; provided that a Holder shall not have the right to institute any such suit for the enforcement of payment if and to the extent that the institution or prosecution thereof or the
entry of judgment therein would, under applicable law, result in the surrender, impairment, waiver or loss of the Lien of this Indenture upon any property subject to such Lien. 
  

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 Section 6.08 Collection Suit by Trustee. 
  
 If an Event of Default specified in Section 6.01(1) or (2) hereof occurs and is continuing, the Trustee is authorized to
recover judgment in its own name and as Trustee of an express trust against the Issuers for the whole amount of principal of, premium and Liquidated Damages, if any, and interest remaining unpaid on, the Notes and interest on overdue principal and,
to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

  
 Section 6.09 Trustee May File Proofs of Claim. 
  
 The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders of the Notes
allowed in any judicial proceedings relative to the Issuers (or any other obligor upon the Notes), its creditors or its property and shall be entitled and empowered to collect, receive and distribute any money or other property payable or
deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof. To the extent that the
payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof out of the estate in any such proceeding, shall be denied for any reason,
payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under
any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding. 
  

Section 6.10 Priorities. 
  
 Any money or other property collected by the Trustee pursuant to this Article 6 or, after an Event of Default, any money or other property distributable
in respect of the Issuers’ or Guarantors’ obligations under this Indenture, shall be paid in the following order: 
  
 First: to the Trustee (including any predecessor Trustee) for amounts due under Section 7.07 hereof; 
  
 Second: to Holders of Notes for amounts due and
unpaid on the Notes for principal, premium and Liquidated Damages, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium and Liquidated Damages, if any
and interest, respectively; and 
  
 Third:
to the Issuers or to the extent the Trustee collects any amount from any Guarantor, to such Guarantor, or as a court of competent jurisdiction may direct. 
  
 The Trustee may fix a record date and payment date for any payment to Holders of Notes pursuant to this Section 6.10. 
  

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 Section 6.11 Undertaking for Costs. 
  
 In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any
action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including
reasonable attorneys’ fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a
Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in aggregate principal amount of the then outstanding Notes. 
  
 ARTICLE 7. 
 TRUSTEE 
  
 Section 7.01 Duties of Trustee. 
  
 (a) If an Event of Default has occurred and is continuing, the Trustee shall
exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

  
 (b) Except during the continuance of an Event of Default:

  
 (1) the duties of the Trustee will be
determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture
against the Trustee; and 
  
 (2) in the absence
of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this
Indenture. However, the Trustee shall examine such certificates and opinions to determine whether or not they conform to the requirements of this Indenture. 
  
 (c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except
that: 
  
 (1) this paragraph does not limit the
effect of paragraphs (b) and (d) of this Section 7.01; 
  
 (2) the Trustee will not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and 
  
 (3) the Trustee will not be liable with respect to any
action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05 hereof. 
  
 (d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to this Section
7.01. 
  

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 (e) Anything herein to the contrary notwithstanding, no provision of this Indenture will require the
Trustee to expend or risk its own funds or incur any liability in the performance of any of its duties hereunder, or in the exercise of any of its rights and powers if it shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to it. 
  
 (f) The Trustee will not be liable for interest on, or for the investment of, any money received by it except as the Trustee may agree in writing with the Issuers. Money held in trust by the Trustee need not be
segregated from other funds except to the extent required by law. 
  
 (g) No provision of this Indenture shall be deemed to impose any duty or obligation on the Trustee to perform any act or acts, receive or obtain any interest in property or exercise any interest in property, or exercise any right, power,
duty or obligation conferred or imposed on it in any jurisdiction in which it shall be illegal, or in which the Trustee shall be unqualified or incompetent in accordance with applicable law, to perform any such act or acts, to receive or obtain any
such interest in property or to exercise any such right, power, duty or obligation; and no permissive or discretionary power or authority available to the Trustee shall be construed to be a duty. 
  
 Section 7.02 Rights of Trustee. 
  
 (a) In the absence of bad faith on its part, the Trustee may conclusively
rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, coupon, document or other paper or
document believed by it in good faith to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document. 
  
 (b) Any request or direction of the Issuers mentioned herein shall be sufficiently evidenced by an Officer’s
Certificate and any resolution of the Board of Directors or any committee thereof (or committee of officers or other representatives of the Issuers, to the extent any such committee or committees have been so authorized by the Board of Directors)
shall be sufficiently evidenced by a certified copy thereof. 
  
 (c) Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate or an Opinion of Counsel or both. The Trustee will not be liable for any action it takes or omits to take in good faith in reliance on such
Officers’ Certificate or Opinion of Counsel. The Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel will be full and complete authorization and protection from liability in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance thereon. 
  
 (d) The Trustee may act through its attorneys and agents and will not be responsible for the misconduct or negligence of any attorney or agent appointed with due care. 
  
 (e) The Trustee will not be liable for any action taken, suffered or omitted
to be taken by it in good faith and believed by it to be authorized or within the discretion, rights or powers conferred upon it by this Indenture. 
  
 (f) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from either of the Issuers will be sufficient if
signed by an Officer of the relevant Issuer. 
  
 (g) The Trustee
will be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders unless such Holders have offered to the Trustee indemnity or security reasonably satisfactory to the
Trustee against the costs, losses, liabilities and expenses that might be incurred by it in compliance with such request or direction. 
  

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 (h) The Trustee shall not be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, coupon or other paper or document. 
  

(i) The Trustee shall not be deemed to have notice or be charged with knowledge of any Default or Event of Default with respect to any series of Notes
unless a Responsible Officer of the Trustee has received at the Corporate Trust Office of the Trustee written notice of such Default or Event of Default from an Issuer, any Guarantor or any Holder, and such notice references such Notes and this
Indenture. 
  
 (j) The Trustee may request that the Issuers
deliver an Officers’ Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture, which Officers’ Certificate may be signed by any persons
authorized to sign an Officers’ Certificate, including any person specified as so authorized in any such certificate previously delivered and not superseded. 
  
 (k) The Trustee shall not be responsible or liable for any failure or delay in the performance of its obligations under this
Indenture arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including, without limitation, acts of God; earthquakes; fire; flood; terrorism; wars and other military disturbances; sabotage; epidemics;
riots; interruptions; loss or malfunctions of utilities, computer (hardware or software) or communication services; accidents; labor disputes; acts of civil or military authority and governmental action. 
  
 (l) Anything in this Indenture notwithstanding, in no event shall the Trustee
be liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including but not limited to loss of profit), even if the Issuers have been advised as to the likelihood of such loss or damage and regardless of the
form of action. 
  
 (m) The rights, privileges, protections,
immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person
employed by it to act hereunder. 
  
 Section 7.03 Individual Rights of
Trustee. 
  
 The Trustee in its individual or any other
capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuers or any Affiliate of the Issuers with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as Trustee (if this Indenture has been qualified under the TIA) or resign. Any Agent may do the same with like rights and duties. The Trustee is
also subject to Sections 7.10 and 7.11 hereof. 
  
 Section 7.04 Trustee’s
Disclaimer. 
  
 (a) The Trustee will not be responsible for
and makes no representation as to the validity or adequacy of this Indenture or the Notes, it shall not be accountable for the Issuers’ use of the proceeds from the Notes or any money paid to the Issuers or upon the Issuers’ direction
under any provision of this Indenture, it will not be responsible for the use or application of any money received by any Paying Agent 
  

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 other than the Trustee, and it will not be responsible for any statement or recital herein or any statement in the Notes
or any other document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication. 
  
 (b) The recitals and other representations and warranties of the Issuers contained herein and in the Notes (except the Trustee’s certificate of
authentication on the Notes) shall be taken as the statements of the Issuers, and neither the Trustee nor any authenticating agent assumes any responsibility for their correctness. The Trustee shall not be accountable for the use or application by
the Issuers of the Notes or the proceeds thereof. 
  
 Section 7.05 Notice of
Defaults. 
  
 If a Default or Event of Default occurs and is
continuing and if it is known to the Trustee, the Trustee will mail to Holders of Notes a notice of the Default or Event of Default within 90 days after it occurs. Except in the case of a Default or Event of Default in payment of principal of,
premium or Liquidated Damages, if any, or interest on, any Note, the Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of the Holders of
the Notes. 
  
 Section 7.06 Reports by Trustee to Holders of the Notes.

  
 (a) Within 60 days after each May 15 beginning with the May
15 following the Issue Date, and for so long as Notes remain outstanding, the Trustee will mail to the Holders of the Notes a brief report dated as of such reporting date that complies with TIA § 313(a) (but if no event described in TIA §
313(a) has occurred within the twelve months preceding the reporting date, no report need be transmitted). The Trustee also will comply with TIA § 313(b)(2). The Trustee will also transmit by mail all reports as required by TIA § 313(c).

  
 (b) A copy of each report at the time of its mailing to the
Holders of Notes will be mailed by the Trustee to the Issuers and filed by the Trustee with the SEC and each stock exchange on which the Notes are listed in accordance with TIA § 313(d). The Issuers will promptly notify the Trustee when the
Notes are listed on any stock exchange. 
  
 Section 7.07 Compensation and
Indemnity. 
  
 (a) The Issuers will pay to the Trustee from
time to time such compensation for its acceptance of this Indenture and services hereunder as the Issuers and the Trustee shall agree. The Trustee’s compensation will not be limited by any law on compensation of a trustee of an express trust.

  
 (b) The Issuers and the Guarantors will reimburse the Trustee
promptly upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses will include the reasonable compensation, disbursements and expenses of the
Trustee’s agents and counsel. 
  
 (c) The Issuers and the
Guarantors will indemnify the Trustee, any predecessor Trustee and any co-trustee against any and all losses, damages, liabilities or expenses incurred by it arising out of or in connection with the acceptance or administration of its duties under
this Indenture, including the costs and expenses of enforcing this Indenture against the Issuers and the Guarantors (including this Section 7.07) and defending itself against any claim (whether asserted by the Issuers, the Guarantors or any Holder
or any other Person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, except to the extent any such loss, liability or expense may be attributable to its negligence or 
  

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 bad faith. The Trustee will notify the Issuers promptly of any claim for which it may seek indemnity. Failure by the
Trustee to so notify the Issuers will not relieve the Issuers or any of the Guarantors of their obligations hereunder. The Issuers or such Guarantor will defend the claim and the Trustee will cooperate in the defense. The Trustee may have separate
counsel and the Issuers will pay the reasonable fees and expenses of such counsel. Neither the Issuers nor any Guarantor need pay for any settlement made without their consent, which consent will not be unreasonably withheld. 
  
 (d) The obligations of the Issuers and the Guarantors under this Section 7.07
will survive the satisfaction and discharge of this Indenture. 
  
 (e) To secure the Issuers’ and the Guarantors’ payment obligations in this Section 7.07, the Trustee will have a Lien prior to the Notes on all money or property held or collected by the Trustee, except that held in trust to pay
principal and interest on particular Notes. Such Lien will survive the satisfaction and discharge of this Indenture. 
  
 (f) In addition and without prejudice to the rights provided to the Trustee under any of the provisions of this Indenture, when the Trustee incurs
expenses or renders services in connection with an Event of Default specified in Section 6.01(7) or (8) hereof, the expenses (including the reasonable charges and expenses of its counsel) and the compensation for the services of the Trustee are
intended to constitute expenses of administration under any applicable Bankruptcy Law. 
  
 (g) The Trustee will comply with the provisions of TIA § 313(b)(2) to the extent applicable. 
  
 Section 7.08 Replacement of Trustee. 
  
 (a) A resignation or removal of the Trustee and appointment of a successor Trustee will become effective only upon the successor Trustee’s acceptance
of appointment as provided in this Section 7.08. 
  
 (b) The
Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Issuers. The Holders of a majority in aggregate principal amount of the then outstanding Notes may remove the Trustee by so notifying the
Trustee and the Issuers in writing. The Issuers may remove the Trustee if: 
  
 (1) the Trustee fails to comply with Section 7.10 hereof; 
  
 (2) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy
Law; 
  
 (3) a custodian or public officer takes
charge of the Trustee or its property; or 
  
 (4)
the Trustee becomes incapable of acting. 
  
 (c) If the Trustee
resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Issuers will promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in aggregate principal
amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Issuers. 
  
 (d) If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Issuers, or the
Holders of at least 10% in aggregate principal amount of the then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee. 
  

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 (e) If the Trustee, after written request by any Holder who has been a Holder for at least six months,
fails to comply with Section 7.10 hereof, such Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. 
  
 (f) A successor Trustee will deliver a written acceptance of its appointment to the retiring Trustee and to the Issuers.
Thereupon, the resignation or removal of the retiring Trustee will become effective, and the successor Trustee will have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee will mail a notice of its
succession to Holders. The retiring Trustee will promptly transfer all property held by it as Trustee to the successor Trustee; provided all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section
7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Issuers’ obligations under Section 7.07 hereof will continue for the benefit of the retiring Trustee. 
  
 Section 7.09 Successor Trustee by Merger, etc. 
  
 If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another Person, the successor Person without any further act will be the successor Trustee. 
  
 Section 7.10 Eligibility; Disqualification. 
  
 There will at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any
state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has a combined capital and surplus of at least $50.0 million as set forth in
its most recent published annual report of condition. 
  
 This
Indenture will always have a Trustee who satisfies the requirements of TIA § 310(a)(1), (2) and (5). The Trustee is subject to TIA § 310(b). 
  
 Section 7.11 Preferential Collection of Claims Against Issuers. 
  
 The Trustee is subject to TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b). A Trustee who has resigned or been removed
shall be subject to TIA § 311(a) to the extent indicated therein. 
  
 Section
7.12 Conflicting Interests 
  
 If the Trustee has or shall
acquire a conflicting interest within the meaning of Section 310(b) of the TIA, the Trustee shall eliminate such interest, apply to the Commission for permission to continue as trustee or resign, to the extent and in the manner provided by, and
subject to the provisions of, the TIA and this Indenture. To the extent permitted by such Act, the Trustee shall not be deemed to have a conflicting interest by virtue of being a trustee under this Indenture or under any other indenture or
indentures under which other securities, or certificates of interest or participation in other securities, of the Issuers are any Guarantor are outstanding. Nothing herein shall prevent the Trustee from filing with the Commission the application
referred to in the second to last paragraph of Section 310(b) of the TIA. 
  

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 ARTICLE 8. 
 LEGAL DEFEASANCE AND COVENANT DEFEASANCE 
  
 Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance. 
  
 The Issuers may at any time, at the option of its Board of Directors evidenced by a resolution set forth in an Officers’ Certificate, elect to have either Section 8.02 or 8.03 hereof be applied to all outstanding
Notes upon compliance with the conditions set forth below in this Article 8. 
  
 Section 8.02 Legal Defeasance and Discharge. 
  
 Upon the Issuers’ exercise under Section 8.01 hereof of the option applicable to this Section 8.02, the Issuers and each of the Guarantors will, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed
to have been discharged from their obligations with respect to all outstanding Notes (including the Note Guarantees) on the date the conditions set forth below are satisfied (hereinafter, “Legal Defeasance”). For this purpose, Legal
Defeasance means that the Issuers and the Guarantors will be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes (including the Note Guarantees), which will thereafter be deemed to be
“outstanding” only for the purposes of Section 8.05 hereof and the other Sections of this Indenture referred to in clauses (1) and (2) below, and to have satisfied all their other obligations under such Notes, the Note Guarantees and this
Indenture (and the Trustee, on demand of and at the expense of the Issuers, shall execute proper instruments acknowledging the same), except for the following provisions which will survive until otherwise terminated or discharged hereunder:

  
 (1) the rights of Holders of outstanding
Notes to receive payments in respect of the principal of, or interest or premium and Liquidated Damages, if any, on, such Notes when such payments are due from the trust referred to in Section 8.04 hereof; 
  
 (2) MagnaChip’s obligations with respect to such Notes
under Article 2 and Section 4.02 hereof; 
  
 (3)
the rights, powers, trusts, duties and immunities of the Trustee hereunder (including all rights under Section 7.07) and the Issuers’ and the Guarantors’ obligations in connection therewith; and 
  
 (4) this Article 8. 
  
 Subject to compliance with this Article 8, the Issuers may exercise their
option under this Section 8.02 notwithstanding the prior exercise of their option under Section 8.03 hereof. 
  
 Section 8.03 Covenant Defeasance. 
  
 Upon the Issuers’ exercise under Section 8.01 hereof of the option applicable to this Section 8.03, the Issuers and each of the Guarantors will, subject to the satisfaction of the conditions set forth in Section
8.04 hereof, be released from each of their obligations under the covenants contained in Sections 4.03, 4.05, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.19, 4.20, 4.21 and 4.22 hereof and clauses (3) and (4) of Section 5.01 hereof with
respect to the outstanding Notes on and after the date the conditions set forth in Section 8.04 hereof are satisfied (hereinafter, “Covenant Defeasance”), and the Notes will thereafter be deemed not “outstanding” for the
purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but will continue to be deemed “outstanding” for all other purposes hereunder (it being
understood that such 
  

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 Notes will not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with
respect to the outstanding Notes and Note Guarantees, the Issuers and the Guarantors may omit to comply with and will have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly,
by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply will not constitute a Default or an Event of
Default under Section 6.01 hereof, but, except as specified above, the remainder of this Indenture and such Notes and Note Guarantees will be unaffected thereby. In addition, upon the Issuers’ exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections 6.01(3) through 6.01(6) hereof will not constitute Events of Default. 
  
 Section 8.04 Conditions to Legal or Covenant Defeasance. 
  
 In order to exercise either Legal Defeasance or Covenant Defeasance under
either Section 8.02 or 8.03 hereof: 
  
 (1) the
Issuers must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally
recognized investment bank, appraisal firm or firm of independent public accountants, to pay the principal of, premium and Liquidated Damages, if any, and interest on, the outstanding Notes on the stated date for payment thereof or on the applicable
redemption date, as the case may be, and MagnaChip must specify whether the Notes are being defeased to such stated date for payment or to a particular redemption date; 
  
 (2) in the case of an election under Section 8.02 hereof, MagnaChip must deliver to the Trustee an Opinion
of Counsel confirming that: 
  
 (A) MagnaChip has
received from, or there has been published by, the Internal Revenue Service a ruling; or 
  
 (B) since the Issue Date, there has been a change in the applicable U.S. federal income tax law, 
  
 in either case to the effect that, and based thereon such Opinion of Counsel
shall confirm that, the Holders of the outstanding Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Legal Defeasance and will be subject to U.S. federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such Legal Defeasance had not occurred; 
  
 (3) in the case of an election under Section 8.03 hereof, MagnaChip must deliver to the Trustee an Opinion of Counsel confirming that the
Holders of the outstanding Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Covenant Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Covenant Defeasance had not occurred; 
  
 (4) no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of
Default resulting from the borrowing of funds to be applied to such deposit) and the deposit will not result in a breach or violation of, or constitute a default under, any other instrument to which MagnaChip or any Guarantor is a party or by which
MagnaChip or any Guarantor is bound; 
  

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 (5) such Legal Defeasance or Covenant Defeasance will not result in a breach or violation
of, or constitute a default under, any material agreement or instrument (other than this Indenture) to which MagnaChip or any of its Subsidiaries is a party or by which MagnaChip or any of its Subsidiaries is bound; 
  
 (6) MagnaChip must deliver to the Trustee an Officers’
Certificate stating that the deposit was not made by MagnaChip with the intent of preferring the Holders of Notes over the other creditors of MagnaChip with the intent of defeating, hindering, delaying or defrauding any creditors of MagnaChip or
others; and 
  
 (7) MagnaChip must deliver to the
Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance have been complied with, such opinion to be subject to customary assumptions and
exceptions. 
  
 Section 8.05 Deposited Money and Government Securities to be
Held in Trust; Other Miscellaneous Provisions. 
  
 Subject to
Section 8.06 hereof, all money and non-callable Government Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.05, the “Trustee”) pursuant
to Section 8.04 hereof in respect of the outstanding Notes will be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including
either Issuer acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium and Liquidated Damages, if any, and interest, but such money need not be
segregated from other funds except to the extent required by law. 
  
 The Issuers will pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or non-callable Government Securities deposited pursuant to Section 8.04 hereof or the principal and interest
received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes. 
  
 Notwithstanding anything in this Article 8 to the contrary, the Trustee will deliver or pay to the Issuers from time to time upon the request of the
Issuers any money or non-callable Government Securities held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to
the Trustee (which may be the opinion delivered under Section 8.04(1) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance. 
  
 Section 8.06 Repayment to the Issuers. 
  
 Any money deposited with the Trustee or any Paying Agent, or then held by
the Issuers, in trust for the payment of the principal of, premium or Liquidated Damages, if any, or interest on, any Note and remaining unclaimed for two years after such principal, premium or Liquidated Damages, if any, or interest has become due
and payable shall be paid to the Issuers on its request or (if then held by the Issuers) will be discharged from such trust; and the Holder of such Note will thereafter be permitted to look only to the Issuers for payment thereof, and all liability
of the Trustee or such Paying Agent with 
  

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 respect to such trust money, and all liability of the Issuers as trustee thereof, will thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Issuers cause to be published once, in the New York Times and The Wall Street Journal (national edition), notice that
such money remains unclaimed and that, after a date specified therein, which will not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining will be repaid to the Issuers.

  
 Section 8.07 Reinstatement. 
  
 If the Trustee or Paying Agent is unable to apply any U.S. dollars or
non-callable Government Securities in accordance with Section 8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then
the Issuers’ and the Guarantors’ obligations under this Indenture and the Notes and the Note Guarantees will be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee
or Paying Agent is permitted to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the case may be; provided, however, that, if the Issuers make any payment of principal of, premium or Liquidated Damages, if any, or
interest on, any Note following the reinstatement of its obligations, the Issuers will be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent. 
  
 ARTICLE 9. 
 AMENDMENT, SUPPLEMENT AND WAIVER 
  
 Section 9.01 Without Consent of Holders of Notes. 
  
 Notwithstanding Section 9.02 of this Indenture, the Issuers, the Guarantors and the Trustee may amend or supplement this Indenture or the Notes or the Note Guarantees without the consent of any Holder of a Note: 
  
 (1) to cure any ambiguity, defect or inconsistency;

  
 (2) to provide for uncertificated Notes in
addition to or in place of certificated Notes; 
  
 (3) to provide for the assumption of MagnaChip’s or a Guarantor’s obligations to the Holders of the Notes and Note Guarantees by a successor to MagnaChip or such Guarantor pursuant to Article 5 hereof; 
  
 (4) to make any change that would provide any additional
rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights hereunder of any Holder; 
  
 (5) to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA; 

 
 (6) to conform the text of this Indenture, the Note
Guarantees or the Notes to any provision of the “Description of the senior subordinated notes” section of the Issuers’ Offering Memorandum dated December 16, 2004, relating to the initial offering of the Notes, to the extent that such
provision in that “Description of the senior subordinated notes” was intended by MagnaChip and the Initial Purchasers to be a verbatim recitation of a provision of this Indenture, the Note Guarantees or the Notes, as represented by
MagnaChip to the Trustee in an Officers’ Certificate; 
  

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 (7) to provide for the issuance of Additional Notes in accordance with the limitations
set forth in this Indenture as of the date hereof; or 
  
 (8) to allow any Guarantor to execute a supplemental indenture and/or a Note Guarantee with respect to the Notes. 
  
 Upon the request of the Issuers accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental
indenture, and upon receipt by the Trustee of the documents described in Section 7.02 hereof, the Trustee will join with the Issuers and the Guarantors in the execution of any amended or supplemental indenture authorized or permitted by the terms of
this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee will not be obligated to enter into such amended or supplemental indenture that affects its own rights, duties or
immunities under this Indenture or otherwise. 
  
 Section 9.02 With Consent of
Holders of Notes. 
  
 Except as provided below in this
Section 9.02, the Issuers and the Trustee may amend or supplement this Indenture (including, without limitation, Section 3.09, 4.10 and 4.15 hereof) and the Notes and the Note Guarantees with the consent of the Holders of at least a majority in
aggregate principal amount of the then outstanding Notes (including, without limitation, Additional Notes, if any) voting as a single class (including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or
purchase of, the Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of Default or compliance with any provision of this Indenture or the Notes or the Note Guarantees may be waived with the consent of the Holders of
a majority in aggregate principal amount of the applicable series of Notes then outstanding (including, without limitation, Additional Notes, if any) voting as a single class (including, without limitation, consents obtained in connection with a
tender offer or exchange offer for, or purchase of, the Notes). 
  
 Upon the request of the Issuers accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of
the consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of the documents described in Section 7.02 hereof, the Trustee will join with the Issuers and the Guarantors in the execution of such amended or supplemental indenture
unless such amended or supplemental indenture directly affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but will not be obligated to, enter into such
amended or supplemental Indenture. 
  
 It is not be necessary for
the consent of the Holders of Notes under this Section 9.02 to approve the particular form of any proposed amendment, supplement or waiver, but it is sufficient if such consent approves the substance thereof. 
  
 After an amendment, supplement or waiver under this Section 9.02 becomes
effective, the Issuers will mail to the Holders of Notes affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Issuers to mail such notice, or any defect therein, will not, however, in any way impair or
affect the validity of any such amended or supplemental indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a majority in aggregate principal amount of the Notes then outstanding voting as a single class may waive
compliance in a particular instance by the Issuers with any provision of this Indenture or the Notes or the Note Guarantees. However, notwithstanding the foregoing without the consent of each Holder affected, an amendment, supplement or waiver under
this Section 9.02 may not (with respect to any Notes held by a non-consenting Holder): 
  
 (1) reduce the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver; 
  

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 (2) reduce the principal of or change the fixed maturity of any Note or alter any of the
provisions with respect to the redemption of the Notes (except as provided above with respect to Sections 3.09, 4.10 and 4.15 hereof); 
  
 (3) reduce the rate of or change the time for payment of interest, including default interest, on any Note; 
  
 (4) waive a Default or Event of Default in the payment of
principal of, or premium or Liquidated Damages, if any, or interest on, the Notes (except a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of the then outstanding Notes and a waiver of the
payment default that resulted from such acceleration); 
  
 (5) make any Note payable in money other than that stated in the Notes; 
  
 (6) make any change in the provisions of this Indenture relating to waivers of past Defaults or the rights of Holders of Notes to receive
payments of principal of, or interest or premium or Liquidated Damages, if any, on, the Notes; 
  
 (7) waive a redemption payment with respect to any Note (other than a payment required by Sections 3.09, 4.10 or 4.15 hereof); 

 
 (8) release any Guarantor from any of its obligations
under its Note Guarantee or this Indenture, except in accordance with the terms of this Indenture; or 
  
 (9) make any change in the preceding amendment and waiver provisions. 
  
 Notwithstanding the foregoing, any amendment, supplement or waiver of the provisions of this Indenture relating to
subordination that adversely affects the rights of the holders of the Notes will require the consent of the holders of at least 75% in aggregate principal amount of the Notes then outstanding. 
  
 Section 9.03 Compliance with Trust Indenture Act. 
  
 Every amendment or supplement to this Indenture or the Notes will be set
forth in a amended or supplemental indenture that complies with the TIA as then in effect. 
  
 Section 9.04 Revocation and Effect of Consents. 
  
 Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that
evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives
written notice of revocation before the date the amendment, supplement or waiver becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder. 
  

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 Section 9.05 Notation on or Exchange of Notes. 
  
 The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated.
The Issuers in exchange for all Notes may issue and the Trustee shall, upon receipt of an Authentication Order, authenticate new Notes that reflect the amendment, supplement or waiver. 
  
 Failure to make the appropriate notation or issue a new Note will not affect the validity and effect of such amendment,
supplement or waiver. 
  
 Section 9.06 Trustee to Sign Amendments, etc.

  
 The Trustee will sign any amended or supplemental indenture
authorized pursuant to this Article 9 if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. The Issuers may not sign an amended or supplemental indenture until the Board of Directors
of each of the Issuers approves it. In executing any amended or supplemental indenture, the Trustee will be entitled to receive and (subject to Section 7.01 hereof) will be fully protected in relying upon an Officers’ Certificate and an Opinion
of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture. 
  
 ARTICLE 10. 
 SUBORDINATION 

 
 Section 10.01 Agreement to Subordinate. 
  
 The Issuers agree, and each Holder by accepting a Note agrees, that the
Indebtedness evidenced by the Notes is subordinated in right of payment, to the extent and in the manner provided in this Article 10, to the prior payment in full of all Senior Debt (whether outstanding on the date hereof or hereafter created,
incurred, assumed or guaranteed), and that the subordination is for the benefit of the holders of Senior Debt. 
  
 Section 10.02 Liquidation; Dissolution; Bankruptcy. 
  
 Upon any distribution to creditors of the Issuers in a liquidation or dissolution of the Issuers or in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to the Issuers or their
property, in an assignment for the benefit of creditors or any marshaling of the Issuers’ assets and liabilities: 
  
 (1) holders of Senior Debt will be entitled to receive payment in full of all Obligations due in respect of such Senior Debt (including
interest after the commencement of any bankruptcy proceeding at the rate specified in the applicable Senior Debt) before the Holders of Notes will be entitled to receive any payment with respect to the Notes (except that Holders of Notes may receive
and retain Permitted Junior Securities and payments made from any defeasance trust created pursuant to Section 8.01 hereof); and 
  
 (2) until all Obligations with respect to Senior Debt (as provided in clause (1) above) are paid in full, any distribution to which
Holders would be entitled but for this Article 10 will be made to holders of Senior Debt (except that Holders of Notes may receive and retain Permitted Junior Securities and payments made from any defeasance trust created pursuant to Section 8.01
hereof), as their interests may appear. 
  

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 Section 10.03 Default on Designated Senior Debt. 
  
 (a) The Issuers may not make any payment or distribution to the Trustee or any Holder in respect of Obligations with respect
to the Notes and may not acquire from the Trustee or any Holder any Notes for cash or property (other than Permitted Junior Securities and payments made from any defeasance trust created pursuant to Section 8.01 hereof) until all principal and other
Obligations with respect to the Senior Debt have been paid in full if: 
  
 (1) payment default on Designated Senior Debt occurs and is continuing beyond any applicable grace period in the agreement, indenture or other document governing such Designated Senior Debt; or 
  
 (2) any other default occurs and is continuing on any series
of Designated Senior Debt that permits holders of that series of Designated Senior Debt to accelerate its maturity and the Trustee receives a notice of such default (a “Payment Blockage Notice”) from either Issuer of the holders of
any Designated Senior Debt. If the Trustee receives any such Payment Blockage Notice, no subsequent Payment Blockage Notice will be effective for purposes of this Section 10.03 unless and until (A) at least 360 days have elapsed since the
effectiveness of the immediately prior Payment Blockage Notice and (B) all scheduled payments of principal, premium and Liquidated Damages, if any, and interest on the Notes that have come due have been paid in full in cash. 
  
 No nonpayment default that existed or was continuing on the date of delivery
of any Payment Blockage Notice to the Trustee may be, or may be made, the basis for a subsequent Payment Blockage Notice unless such default has have been waived for a period of not less than 90-180 days. 
  
 (b) The Issuers may and will resume payments on and distributions in respect
of the Notes and may acquire them upon the earlier of: 
  
 (1) in the case of a payment default, upon the date upon which such default is cured or waived, or 
  
 (2) in the case of a nonpayment default, upon the earlier of the date on which such nonpayment default is cured or waived or 179 days
after the date on which the applicable Payment Blockage Notice is received, unless the maturity of any Designated Senior Debt has been accelerated, 
  
 if this Article 10 otherwise permits the payment, distribution or acquisition at the time of such payment or acquisition. 
  
 Section 10.04 Acceleration of Notes. 
  
 If payment of the Notes is accelerated because of an Event of Default, the
Issuers will promptly notify holders of Senior Debt of the acceleration. 
  
 Section 10.05 When Distribution Must Be Paid Over. 
  
 In the event that the Trustee or any Holder receives any payment of any Obligations with respect to the Notes (other than Permitted Junior Securities and payments made from any defeasance trust created pursuant to Section 8.01 hereof) at a
time when the Trustee or such Holder, as applicable, has actual knowledge that such payment is prohibited by Section 10.03 hereof, such payment will be held by the 
  

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 Trustee or such Holder, in trust for the benefit of, and will be paid forthwith over and delivered, upon written request,
to, the holders of Senior Debt as their interests may appear or their Representative under the agreement, indenture or other document (if any) pursuant to which Senior Debt may have been issued, as their respective interests may appear, for
application to the payment of all Obligations with respect to Senior Debt remaining unpaid to the extent necessary to pay such Obligations in full in accordance with their terms, after giving effect to any concurrent payment or distribution to or
for the holders of Senior Debt. 
  
 With respect to the holders of
Senior Debt, the Trustee undertakes to perform only those obligations on the part of the Trustee as are specifically set forth in this Article 10, and no implied covenants or obligations with respect to the holders of Senior Debt will be read into
this Indenture against the Trustee. The Trustee will not be deemed to owe any fiduciary duty to the holders of Senior Debt, and will not be liable to any such holders if the Trustee, acting in good faith, pays over or distributes to or on behalf of
Holders or the Issuers or any other Person money or assets to which any holders of Senior Debt are then entitled by virtue of this Article 10. 
  
 Section 10.06 Notice by Issuers. 
  
 The Issuers will promptly notify the Trustee and the Paying Agent of any facts known to the Issuers that would cause a payment of any Obligations with
respect to the Notes to violate this Article 10, but failure to give such notice will not affect the subordination of the Notes to the Senior Debt as provided in this Article 10. 
  
 Section 10.07 Subrogation. 
  
 After all Senior Debt is paid in full and until the Notes are paid in full, Holders of Notes will be subrogated (equally and ratably with all other
Indebtedness pari passu with the Notes) to the rights of holders of Senior Debt to receive distributions applicable to Senior Debt to the extent that distributions otherwise payable to the Holders of Notes have been applied to the payment of
Senior Debt. A distribution made under this Article 10 to holders of Senior Debt that otherwise would have been made to Holders of Notes is not, as between the Issuers and Holders, a payment by the Issuers on the Notes. 
  
 Section 10.08 Relative Rights. 
  
 This Article 10 defines the relative rights of Holders of Notes and holders
of Senior Debt. Nothing in this Indenture will: 
  
 (1) impair, as between the Issuers and Holders of Notes, the obligation of the Issuers, which is absolute and unconditional, to pay principal of, premium and interest and Liquidated Damages, if any, on, the Notes in accordance with their
terms; 
  
 (2) affect the relative rights of
Holders of Notes and creditors of the Issuers other than their rights in relation to holders of Senior Debt; or 
  
 (3) prevent the Trustee or any Holder of Notes from exercising its available remedies upon a Default or Event of Default, subject to the
rights of holders and owners of Senior Debt to receive distributions and payments otherwise payable to Holders of Notes. 
  
 If the Issuers fail because of this Article 10 to pay principal of, premium or interest or Liquidated Damages, if any, on, a Note on the due date, the
failure is still a Default or Event of Default. 
  

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 Section 10.09 Subordination May Not Be Impaired by Company. 
  
 No right of any holder of Senior Debt to enforce the subordination of the
Indebtedness evidenced by the Notes may be impaired by any act or failure to act by the Issuers or any Holder or by the failure of the Issuers or any Holder to comply with this Indenture. 
  
 Section 10.10 Distribution or Notice to Representative. 
  
 Whenever a distribution is to be made or a notice given to holders of Senior Debt, the distribution may be made and the
notice given to their Representative. 
  
 Upon any payment or
distribution of assets of the Issuers referred to in this Article 10, the Trustee and the Holders of Notes will be entitled to rely upon any order or decree made by any court of competent jurisdiction or upon any certificate of such Representative
or of the liquidating trustee or agent or other Person making any distribution to the Trustee or to the Holders of Notes for the purpose of ascertaining the Persons entitled to participate in such distribution, the holders of the Senior Debt and
other Indebtedness of the Issuers, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article 10. In the event that the Trustee determines, in good faith, that
evidence is required with respect to the right of any Person as a holder of Senior Debt to participate in any payment or distribution pursuant to this Article 10, the Trustee shall be entitled to request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of such Senior Debt held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and other facts pertinent to the rights of such Person under
this Article 10, and, if such evidence is not furnished, the Trustee shall be entitled to defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment. The provisions of Sections 7.01 and
7.02 hereof shall be applicable to all actions or omissions of actions by the Trustee pursuant to this Article 10. 
  
 Section 10.11 Rights of Trustee and Paying Agent. 
  
 Notwithstanding the provisions of this Article 10 or any other provision of this Indenture, the Trustee will not be charged with knowledge of the
existence of any facts that would prohibit the making of any payment or distribution by the Trustee, and the Trustee and the Paying Agent may continue to make payments on the Notes, unless the a Responsible Officer of the Trustee has received at its
Corporate Trust Office at least five Business Days prior to the date of such payment written notice of facts that would cause the payment of any Obligations with respect to the Notes to violate this Article 10. Only an Issuer or a Representative may
give the notice. Nothing in this Article 10 will impair the claims of, or payments to, the Trustee hereunder or pursuant to Sections 6.10 and 7.07 hereof. 
  
 The Trustee in its individual or any other capacity may hold Senior Debt with the same rights it would have if it were not Trustee. Any Agent may do the
same with like rights. 
  
 Section 10.12 Authorization to Effect
Subordination. 
  
 Each Holder of Notes, by the Holder’s
acceptance thereof, authorizes and directs the Trustee on such Holder’s behalf to take such action as may be necessary or appropriate to effectuate the subordination as provided in this Article 10, and appoints the Trustee to act as such
Holder’s attorney-in-fact for any and all such purposes. If the Trustee does not file a proper proof of claim or proof of debt in the form required in any proceeding referred to in Section 6.09 hereof at least 30 days before the expiration of
the time to file such claim, the Representatives are hereby authorized to file an appropriate claim for and on behalf of the Holders of the Notes. 
  

 90 

 Section 10.13 Amendments. 
  
 The provisions of this Article 10 may not be amended or modified without the written consent of the holders of all Senior
Debt. 
  
 Section 10.14 Trust Monies not to be Subordinated 
  
 Notwithstanding anything contained herein to the contrary, payments from
money or the proceeds of Government Obligations held in trust under Article 8 hereof by the Trustee for the payment of principal of and interest on the Notes shall not be subordinated to the prior payment of any Senior Debt of the Issuers or subject
to the restrictions set forth in this Article 10 if the provisions of this Article 10 were not violated at the time funds were deposited in trust with the Trustee pursuant to Article 8 hereof, and none of the Holders shall be obligated to pay over
any such amount to the Issuers or any holder of Senior Debt of the Issuers or any other creditor of the Issuers. 
  
 ARTICLE 11. 
 SATISFACTION AND DISCHARGE 
  
 Section 11.01 Satisfaction and Discharge. 
  
 This Indenture will be discharged and will cease to be of further effect as
to all Notes issued hereunder, when: 
  
 (1)
either: 
  
 (a) all Notes that have been
authenticated, except lost, stolen or destroyed Notes that have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust and thereafter repaid to MagnaChip, have been delivered to the Trustee for cancellation;
or 
  
 (b) all Notes that have not been delivered
to the Trustee for cancellation have become due and payable by reason of the mailing of a notice of redemption or otherwise or will become due and payable within one year and MagnaChip or any Guarantor has irrevocably deposited or caused to be
deposited with the Trustee as trust funds in trust solely for the benefit of the holders, cash in U.S. dollars, non-callable Government Securities, or a combination of cash in U.S. dollars and non-callable Government Securities, in amounts as will
be sufficient, without consideration of any reinvestment of interest, to pay and discharge the entire Indebtedness on the Notes not delivered to the Trustee for cancellation for principal, premium and Liquidated Damages, if any, and accrued interest
to the date of maturity or redemption; 
  
 (2) no
Default or Event of Default has occurred and is continuing on the date of the deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit) and the deposit will not result in a breach or
violation of, or constitute a default under, any other instrument to which MagnaChip or any Guarantor is a party or by which MagnaChip or any Guarantor is bound; 
  
 (3) MagnaChip or any Guarantor has paid or caused to be paid all sums payable by it under this Indenture;
and 
  

 91 

 (4) MagnaChip has delivered irrevocable instructions to the Trustee under this Indenture
to apply the deposited money toward the payment of the Notes at maturity or on the redemption date, as the case may be. 
  
 In addition, MagnaChip must deliver an Officers’ Certificate and an opinion of counsel to the Trustee stating that all conditions precedent to
satisfaction and discharge have been satisfied. 
  
 Notwithstanding the satisfaction and discharge of this Indenture, if money has been deposited with the Trustee pursuant to Section 11.01, the provisions of Sections 11.02 and 8.06 hereof will survive. In addition, nothing in this Section
11.01 will be deemed to discharge those provisions of Section 7.07 hereof, that, by their terms, survive the satisfaction and discharge of this Indenture. 
  
 Section 11.02 Application of Trust Money. 
  
 Subject to the provisions of Section 8.06 hereof, all money deposited with the Trustee pursuant to Section 11.01 hereof shall be held in trust and applied
by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent (including either Issuers acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled
thereto, of the principal (and premium and Liquidated Damages, if any) and interest for whose payment such money has been deposited with the Trustee; but such money need not be segregated from other funds except to the extent required by law.

  
 If the Trustee or Paying Agent is unable to apply any money or
Government Securities in accordance with Section 11.01 hereof by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the
Issuers’ and any Guarantor’s obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 11.01 hereof; provided that if the Issuers have made any payment of
principal of, premium or Liquidated Damages, if any, or interest on, any Notes because of the reinstatement of its obligations, the Issuers shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or
Government Securities held by the Trustee or Paying Agent. 
  
 ARTICLE 12. 
 NOTE GUARANTEES 
  
 Section 12.01 Guarantee. 
  
 (a) Subject to this Article 12, each of the Guarantors hereby, jointly and severally, unconditionally guarantees to each Holder of a Note authenticated
and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes or the obligations of the Issuers hereunder or thereunder, that: 
  
 (1) the principal of, premium and Liquidated Damages, if
any, and interest on, the Notes will be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other obligations
of the Issuers to the Holders or the Trustee hereunder or thereunder will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and 
  
 (2) in case of any extension of time of payment or renewal of any Notes or any of such other obligations,
that same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. 
  

 92 

 Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever
reason, the Guarantors will be jointly and severally obligated to pay the same immediately. Each Guarantor agrees that this is a guarantee of payment and not a guarantee of collection. 
  
 (b) The Guarantors hereby agree that their obligations hereunder are unconditional, irrespective of the validity, regularity
or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuers, any
action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Each Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in
the event of insolvency or bankruptcy of the Issuers, any right to require a proceeding first against the Issuers, protest, notice and all demands whatsoever and covenant that this Note Guarantee will not be discharged except by complete performance
of the obligations contained in the Notes and this Indenture. 
  
 (c) If any Holder or the Trustee is required by any court or otherwise to return to the Issuers, the Guarantors or any custodian, trustee, liquidator or other similar official acting in relation to either the Issuers or the Guarantors, any
amount paid by either to the Trustee or such Holder, this Note Guarantee, to the extent theretofore discharged, will be reinstated in full force and effect. 
  
 (d) Each Guarantor agrees that it will not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (1) the maturity of the obligations guaranteed
hereby may be accelerated as provided in Article 6 hereof for the purposes of this Note Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (2) in the
event of any declaration of acceleration of such obligations as provided in Article 6 hereof, such obligations (whether or not due and payable) will forthwith become due and payable by the Guarantors for the purpose of this Note Guarantee. The
Guarantors will have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Note Guarantee. 
  
 Section 12.02 Limitation on Guarantor Liability. 
  
 Each Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties
that the Note Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent
applicable to any Note Guarantee. To effectuate the foregoing intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree that the obligations of such Guarantor will be limited to the maximum amount that will, after giving effect
to such maximum amount and all other contingent and fixed liabilities of such Guarantor that are relevant under such laws, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any
other Guarantor in respect of the obligations of such other Guarantor under this Article 12, result in the obligations of such Guarantor under its Note Guarantee not constituting a fraudulent transfer or conveyance. 
  

 93 

 Section 12.03 Execution and Delivery of Note Guarantee. 
  
 To evidence its Note Guarantee set forth in Section 12.01 hereof, each
Guarantor hereby agrees that a notation of such Note Guarantee substantially in the form attached as Exhibit E hereto will be endorsed by an Officer of such Guarantor on each Note authenticated and delivered by the Trustee and that this Indenture
will be executed on behalf of such Guarantor by one of its Officers. 
  
 Each Guarantor hereby agrees that its Note Guarantee set forth in Section 12.01 hereof will remain in full force and effect notwithstanding any failure to endorse on each Note a notation of such Note Guarantee. 
  
 If an Officer whose signature is on this Indenture or on the Note Guarantee
no longer holds that office at the time the Trustee authenticates the Note on which a Note Guarantee is endorsed, the Note Guarantee will be valid nevertheless. 
  

The delivery of any Note by the Trustee, after the authentication thereof hereunder, will constitute due delivery of the Note Guarantee set forth in
this Indenture on behalf of the Guarantors. 
  
 In the event that
the Issuers or any of its Restricted Subsidiaries creates or acquires any Subsidiary after the Issue Date, if required by Section 4.21 hereof, the Issuers will cause such Subsidiary to comply with the provisions of Section 4.21 hereof and this
Article 12, to the extent applicable. 
  
 Section 12.04 Guarantors May
Consolidate, etc., on Certain Terms. 
  
 Except as otherwise
provided in Section 12.05 hereof, no Guarantor may sell or otherwise dispose of all or substantially all of its assets to, or consolidate with or merge with or into (whether or not such Guarantor is the surviving Person) another Person, other than
MagnaChip or another Guarantor, unless: 
  
 (1)
immediately after giving effect to such transaction, no Default or Event of Default exists; and 
  
 (2) either: 
  
 (a) subject to Section 12.05 hereof, the Person acquiring the property in any such sale or disposition or the Person formed by or
surviving any such consolidation or merger unconditionally assumes all the obligations of that Guarantor under this Indenture, its Note Guarantee and the Registration Rights Agreements on the terms set forth herein or therein, pursuant to a
supplemental indenture in form and substance reasonably satisfactory to the Trustee; or 
  
 (b) the Net Proceeds of such sale or other disposition are applied in accordance with the applicable provisions of this Indenture,
including without limitation, Section 4.10 hereof. 
  
 In case of
any such consolidation, merger, sale or conveyance and upon the assumption by the successor Person, by supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the Note Guarantee endorsed upon the
Notes and the due and punctual performance of all of the covenants and conditions of this Indenture to be performed by the Guarantor, such successor Person will succeed to and be substituted for the Guarantor with the same effect as if it had been
named herein as a Guarantor. Such successor Person thereupon may cause to be signed any or all of the Note Guarantees to be endorsed upon all of the Notes issuable hereunder which theretofore shall not have been signed by the Issuers and delivered
to the Trustee. All the Note Guarantees so issued will 
  

 94 

 in all respects have the same legal rank and benefit under this Indenture as the Note Guarantees theretofore and
thereafter issued in accordance with the terms of this Indenture as though all of such Note Guarantees had been issued at the date of the execution hereof. 
  
 Except as set forth in Articles 4 and 5 hereof, and notwithstanding clauses 2(a) and (b) above, nothing contained in this Indenture or in any of the Notes
will prevent any consolidation or merger of a Guarantor with or into the Issuers or another Guarantor, or will prevent any sale or conveyance of the property of a Guarantor as an entirety or substantially as an entirety to the Issuers or another
Guarantor. 
  
 Section 12.05 Releases. 
  
 The Note Guarantees of a Guarantor will be released: 
  
 (a) in connection with any liquidation or sale or other disposition of all
or substantially all of the assets of that Guarantor (including by way of merger or consolidation) to a Person that is not (either before or after giving effect to such transaction) MagnaChip or a Restricted Subsidiary of MagnaChip, if the sale or
other disposition does not violate Section 4.10 hereof; 
  
 (b) in
connection with any sale or other disposition of all of the Capital Stock of that Guarantor to a Person that is not (either before or after giving effect to such transaction) MagnaChip or a Restricted Subsidiary of MagnaChip, if the sale or other
disposition does not violate Section 4.10 hereof; 
  
 (c) if
MagnaChip designates any Restricted Subsidiary that is a Guarantor to be an Unrestricted Subsidiary in accordance with Section 4.22 hereof; or 
  
 (d) upon legal defeasance or satisfaction and discharge of this Indenture as provided in Articles 8 and Article 11 hereof. 
  
 Any Guarantor not released from its obligations under its Note Guarantee as
provided in this Section 12.05 will remain liable for the full amount of principal of and interest and premium and Liquidated Damages, if any, on the Notes and for the other obligations of any Guarantor under this Indenture as provided in this
Article 12. In connection with any such release, the Issuers shall deliver to the Trustee an Officers’ Certificate and an Opinion of Counsel as and to the extent required by Sections 14.04 and 14.05. 
  
 ARTICLE 13. 
 [RESERVED] 
  
 ARTICLE 14. 
 MISCELLANEOUS 
  
 Section 14.01 Trust Indenture Act Controls. 
  
 If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by TIA §318(c), the imposed duties will control.

  
 Section 14.02 Notices. 
  
 Any notice or communication by the Issuers, any Guarantor or the Trustee to
the others is duly given if in writing and delivered in Person or by first class mail (registered or certified, return receipt 
  

 95 

 requested), facsimile transmission or overnight air courier guaranteeing next day delivery, to the others’ address:

  
 If to the Issuers and/or any Guarantor: 
  
 c/o MagnaChip Semiconductor, Ltd. 
 1, Hyangjeong-dong 
 Hungduk-gu 
 Cheongju-si, 361-725 
 Korea 
 Facsimile No.: 82-2-3459-3674 
 Attention:
Chief Financial Officer 
  
 With a copy (which shall not
constitute notice to any Issuer or Guarantor) to: 
  
 Dechert LLP

 4000 Bell Atlantic Tower 
 1717
Arch Street 
 Philadelphia, PA 19103-2793 
 Attention:   Geraldine Sinatra ((215) 994-2222) 
   and Sang Park ((212)
698-3599) 
  
 If to the Trustee: 
  
 The Bank of New York 
 101 Barclay Street, 8W 
 New York, N.Y. 10286

 Facsimile No.: (212)-815-5707 
 Attention: Corporate Trust Division - Corporate Finance Unit 
  
 The Issuers, any Guarantor or the Trustee, by notice to the others, may designate additional or different addresses for subsequent notices or communications. 
  
 All notices and communications (other than those sent to Holders) will be deemed to have been duly given: at the time
delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed (except with respect to notice to the Trustee unless there is reasonable confirmation of receipt); when receipt
acknowledged, if transmitted by facsimile; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery (except with respect to notice to the Trustee unless there is a signature
acknowledging receipt or other reasonable confirmation of receipt). 
  
 Any notice or communication to a Holder will be mailed by first class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to its address shown on the register kept by the
Registrar. Any notice or communication will also be so mailed to any Person described in TIA § 313(c), to the extent required by the TIA. Failure to mail a notice or communication to a Holder or any defect in it will not affect its sufficiency
with respect to other Holders. 
  
 If a notice or communication is
mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it. 
  
 If the Issuers mail a notice or communication to Holders, it will mail a copy to the Trustee and each Agent at the same time. 
  

 96 

 Section 14.03 Communication by Holders of Notes with Other Holders of Notes. 
  
 Holders may communicate pursuant to TIA § 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Issuers, the Trustee, the Registrar and anyone else shall have the protection of TIA § 312(c). 
  
 Section 14.04 Certificate and Opinion as to Conditions Precedent. 
  
 Upon any request or application by the Issuers to the Trustee to take any action under this Indenture, the Issuers shall
furnish to the Trustee: 
  
 (1) an Officers’
Certificate in form and substance reasonably satisfactory to the Trustee (which must include the statements set forth in Section 14.05 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for
in this Indenture relating to the proposed action have been satisfied; and 
  
 (2) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which must include the statements set forth in Section 14.05 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied. 
  
 Section 14.05
Statements Required in Certificate or Opinion. 
  
 Each
certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA § 314(a)(4)) must comply with the provisions of TIA § 314(e) and must include:

  
 (1) a statement that the Person making such
certificate or opinion has read such covenant or condition; 
  
 (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; 
  
 (3) a statement that, in the opinion of such Person, he or
she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been satisfied; and 
  
 (4) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been
satisfied. 
  
 Section 14.06 Rules by Trustee and Agents. 
  
 The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions. 
  
 Section 14.07 No Personal Liability of Directors, Officers, Employees and Stockholders. 
  
 No past, present or future director, officer, employee, incorporator, member or stockholder (or the equivalent) of MagnaChip
or any Guarantor, as such, will have any liability for any obligations of MagnaChip or the Guarantors under the Notes, this Indenture, the Note Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation.
Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. The waiver may not be effective to waive liabilities under the federal securities laws.

  

 97 

 Section 14.08 Governing Law; Jurisdiction. 
  
 THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE
GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. 
  
 No proceeding related to this Indenture may be commenced, prosecuted or continued in any court other than the courts of the
State of New York located in the City and County of New York or in the United States District Court for the Southern District of New York, which courts shall have jurisdiction over the adjudication of such matters, and the Issuers hereby consent to
the jurisdiction of such courts and personal service with respect thereto. The Issuers irrevocably appoint CT Corporation System (at the address: Attn: Service of Process Department, 111 Eighth Ave, 13th Floor, New York, New York, 10011) as their
authorized agent in the City and County of New York upon which process may be served in any such suit or proceeding, and agree that service of process upon such agent, and written notice of said service to each Issuer, by the person serving the same
to the address provided in Section 14, shall be deemed in every respect effective service of process upon each Issuer, as applicable, in such suit or proceeding. The Issuers agree that a final judgment in any such proceeding brought in any such
court shall be conclusive and binding upon the Issuers and may be enforced in any other courts in the jurisdiction of which the Issuers are or may be subject, by suit upon such judgment. 
  
 Section 14.09 No Adverse Interpretation of Other Agreements. 
  
 This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Issuers or their Subsidiaries
or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture. 
  
 Section 14.10 Successors. 
  
 All agreements of the Issuers in this Indenture and the Notes will bind its successors. All agreements of the Trustee in this Indenture will bind its
successors. All agreements of each Guarantor in this Indenture will bind its successors, except as otherwise provided in Section 12.05 hereof. 
  
 Section 14.11 Severability. 
  
 In case any provision in this Indenture or in the Notes is invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining
provisions will not in any way be affected or impaired thereby. 
  
 Section 14.12
Counterpart Originals. 
  
 The parties may sign any number
of copies of this Indenture. Each signed copy will be an original, but all of them together represent the same agreement. 
  

 98 

 Section 14.13 Table of Contents, Headings, etc. 
  
 The Table of Contents, Cross-Reference Table and Headings of the Articles and Sections of this Indenture have been inserted
for convenience of reference only, are not to be considered a part of this Indenture and will in no way modify or restrict any of the terms or provisions hereof. 
  
 [Signatures on following page] 
  

 99 

 SIGNATURES 
  
 Dated as of December 23, 2004 
  

			
	MAGNACHIP SEMICONDUCTOR S.A.
		
	By:	 	  

	Name:	 	 
	Title:	 	 
	
	MAGNACHIP SEMICONDUCTOR FINANCE COMPANY
		
	By:	 	  

	Name:	 	 
	Title:	 	 
	
	MAGNACHIP SEMICONDUCTOR LLC
		
	By:	 	  

	Name:	 	 
	Title:	 	 
	
	MAGNACHIP SEMICONDUCTOR, INC.
		
	By:	 	  

	Name:	 	 
	Title:	 	 
	
	MAGNACHIP SEMICONDUCTOR LTD. (UNITED KINGDOM)
		
	By:	 	  

	Name:	 	 
	Title:	 	 
	
	MAGNACHIP SEMICONDUCTOR INC. (JAPAN)
		
	By:	 	  

	Name:	 	 
	Title:	 	 

  
 [signature page
to Subordinated Notes Indenture] 

			
	MAGNACHIP SEMICONDUCTOR LTD. (HONG KONG)
		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 
	
	MAGNACHIP SEMICONDUCTOR LTD. (TAIWAN)
		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 
	
	MAGNACHIP SEMICONDUCTOR B.V. (NETHERLANDS)
		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 
		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 
	
	MAGNACHIP SEMICONDUCTOR SA HOLDINGS LLC
		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 

  
 [signature page
to Subordinated Notes Indenture] 

			
	 THE BANK OF NEW YORK,

	 as Trustee

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 

  
 [signature page
to Subordinated Notes Indenture] 

 Exhibit A 
  
 EXHIBIT A1 
  
 [Face of Senior Subordinated Note] 
  
 CUSIP/CINS              
  
 8% Senior Subordinated Notes due 2014 
  

			
	 No.     
	 	$            

  
 MAGNACHIP SEMICONDUCTOR
S.A. 
 and 
 MAGNACHIP
SEMICONDUCTOR FINANCE COMPANY 
  
 promises to pay to
             or registered assigns, 
  
 the principal sum of
                                        
                                     DOLLARS on
            , 2014. 
  
 Interest Payment Dates: June 15 and December 15 
  
 Record Dates: June 1
and December 1 
  
 Dated: December     , 2004

  

			
	 MAGNACHIP SEMICONDUCTOR S.A.

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 
	
	MAGNACHIP SEMICONDUCTOR FINANCE COMPANY
		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 

  

			
	 This is one of the Notes referred to
 in the
within-mentioned Indenture:

	
	 THE BANK OF NEW YORK,

	 as Trustee

		
	 By:
	 	  

	 	 	Authorized Signatory

  
  

 A1-1 

 [Back of Note] 
 8% Senior Subordinated Notes due 2014 
  
 THIS
GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE
TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS GLOBAL NOTE MAY BE DELIVERED
TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUERS. 
  
 UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE
MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR
A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE ISSUERS OR THEIR AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS
MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 
  
 THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE “SECURITIES ACT”), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF
THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. 
  
 THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE ISSUERS THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
ONLY (I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (IV) TO AN INSTITUTIONAL
“ACCREDITED INVESTOR” (AS DEFINED IN RULE 501 (a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN 
  

 A1-2 

 REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS NOTE (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE)
AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUERS THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, OR (V) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.] 
  
 THE HOLDER OF THIS NOTE REPRESENTS EITHER THAT (A) IT IS NOT A PLAN (WHICH TERM INCLUDES (I) EMPLOYEE BENEFIT PLANS THAT ARE SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), (II) PLANS,
INDIVIDUAL RETIREMENT ACCOUNTS AND OTHER ARRANGEMENTS THAT ARE SUBJECT TO SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), OR TO PROVISIONS UNDER APPLICABLE FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR
REGULATIONS THAT ARE SIMILAR TO SUCH PROVISIONS OF ERISA OR THE CODE (“SIMILAR LAWS”) AND (III) ENTITIES THE UNDERLYING ASSETS OF WHICH ARE CONSIDERED TO INCLUDE “PLAN ASSETS” OF SUCH PLANS, ACCOUNTS AND ARRANGEMENTS) AND IT HAS
NOT PURCHASED THE NOTES ON BEHALF OF, OR WITH THE “PLAN ASSETS” OF, ANY PLAN; OR (B) THE HOLDER’S PURCHASE, HOLDING AND SUBSEQUENT DISPOSITION OF THE NOTES EITHER (I) ARE NOT A PROHIBITED TRANSACTION UNDER ERISA OR THE CODE AND ARE
OTHERWISE PERMISSIBLE UNDER ALL APPLICABLE SIMILAR LAWS OR (II) ARE ENTITLED TO EXEMPTIVE RELIEF FROM THE PROHIBITED TRANSACTION PROVISIONS OF ERISA AND THE CODE IN ACCORDANCE WITH ONE OR MORE AVAILABLE STATUTORY, CLASS OR INDIVIDUAL PROHIBITED
TRANSACTION EXEMPTIONS AND ARE OTHERWISE PERMISSIBLE UNDER ALL APPLICABLE SIMILAR LAWS. 
  
 Capitalized terms used herein have the meanings assigned to them in the Indenture referred to below unless otherwise indicated. 
  

(1) INTEREST. MagnaChip Semiconductor S.A., a Luxembourg public limited liability company
(societe anonyme) (“MagnaChip”), and MagnaChip Semiconductor Finance Company, a Delaware corporation (“Finance Company” and together with MagnaChip, the “Issuers”), jointly and severally promise to
pay interest on the principal amount of this Note at a rate equal to 8% per annum from December 23, 2004 until maturity and shall pay the Liquidated Damages, if any, payable pursuant to Section 4 of the Registration Rights Agreement referred to
below. The Issuers will pay interest and Liquidated Damages, if any, semi-annually in arrears on June 15 and December 15 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each, an “Interest Payment
Date”). Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of issuance; provided that if there is no existing Default in the payment of
interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided further that the
first Interest Payment Date shall be June 15, 2005. The Issuers will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at a rate that is
1% per annum in excess of the rate then in effect to the extent lawful; it will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest 

  

 A1-3 

 
and Liquidated Damages, if any, (without regard to any applicable grace periods) from time to time on demand at the same rate to the extent lawful. Interest
will be computed on the basis of a 360-day year of twelve 30-day months. 
  
 (2) METHOD OF PAYMENT. The Issuers will pay interest on the Notes (except defaulted interest) and Liquidated Damages, if any, to the Persons who are
registered Holders of Notes at the close of business on the June 1 or December 1 next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in
Section 2.12 of the Indenture with respect to defaulted interest. The Notes will be payable as to principal, premium and Liquidated Damages, if any, and interest at the office or agency of the Issuers maintained for such purpose within or without
the City and State of New York, or, at the option of the Issuers, payment of interest and Liquidated Damages, if any, may be made by check mailed to the Holders at their addresses set forth in the register of Holders; provided that payment by
wire transfer of immediately available funds will be required with respect to principal of and interest, premium and Liquidated Damages, if any, on, all Global Notes and all other Notes the Holders of which will have provided wire transfer
instructions to the Issuers or the Paying Agent. Such payment will be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. 
  
 (3) PAYING AGENT
AND REGISTRAR. Initially, The Bank of New York, the Trustee under the Indenture, will act as Paying Agent and Registrar. The Issuers may change any Paying Agent or Registrar without notice to any
Holder. MagnaChip or any of its Subsidiaries may act in any such capacity. 
  
 (4) INDENTURE. The Issuers issued the Notes under an Indenture dated as of December 23, 2004 (the “Indenture”) among the Issuers, the Guarantors and the Trustee.
The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the TIA. The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms.
To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling. The Notes are unsecured obligations of the Issuers. The Indenture does not limit the
aggregate principal amount of Notes that may be issued thereunder. 
  
 (5) OPTIONAL REDEMPTION. 
  
 (a) At any time prior to December 15, 2007, MagnaChip may on any one or more occasions redeem up to 35% of the aggregate principal amount
of Notes issued under the Indenture (including any Additional Notes issued after the Issue Date) at a redemption price of 108% of the principal amount thereof, plus accrued and unpaid interest and Liquidated Damages, if any, to the redemption
date, with the net cash proceeds of one or more Public Equity Offerings or a contribution to MagnaChip’s common equity capital made with the net cash proceeds of a concurrent Public Equity Offering of US LLC or any of its Subsidiaries;
provided that: 
  
 (1) at least 65% of the aggregate
principal amount of Notes originally issued under this Indenture (including any Additional Notes issued after the date of the Indenture) (excluding Notes held by MagnaChip and its Subsidiaries) remains outstanding immediately after the occurrence of
such redemption; and 
  
 (2) the redemption occurs within 90
days of the date of the closing of such Public Equity Offering or equity contributions. 
  

 A1-4 

 (b) On or after December 15, 2009, MagnaChip may redeem all or a part of the Notes, upon
not less than 30 nor more than 60 days’ prior notice mailed by first-class mail to each holder’s registered address, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid
interest and Liquidated Damages, if any, on the Notes redeemed, to the applicable redemption date, if redeemed during the twelve-month period beginning on December 15 of the years indicated below, subject to the rights of holders of Notes on the
relevant record date to receive interest due on the relevant interest payment date: 
  

				
	 Year

	  	Percentage

	 
	 2009
	  	104.000	%
	 2010
	  	102.667	%
	 2011
	  	101.333	%
	 2012 and thereafter
	  	100.000	%

  
 At any
time prior to December 15, 2009, MagnaChip may also redeem all or a part of the Notes (including any Additional Notes issued after the Issue Date), upon not less than 30 nor more than 60 days’ prior notice mailed by first-class mail to each
holder’s registered address, at a redemption price equal to 100% of the principal amount of Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest and Liquidated Damages, if any, to the redemption date, subject
to the rights of holders of Notes on the relevant record date to receive interest due on the relevant interest payment date. 
  
 Unless MagnaChip defaults in the payment of the redemption price, interest will cease to accrue on the Notes or portions thereof called
for redemption on the applicable redemption date. 
  
 (6) MANDATORY REDEMPTION. 
  
 The Issuers are not required to make mandatory redemption or sinking fund payments with respect to the Notes. 
  
 (7) REPURCHASE AT THE OPTION OF
HOLDER. 
  
 (a)
If a Change of Control occurs, the Issuers will make an offer (a “Change of Control Offer”) to each Holder to repurchase all or any part (equal to $1,000 or an integral multiple of $1,000 in excess of $1,000) of that Holder’s
Notes at a purchase price in cash equal to 101% of the aggregate principal amount of Notes repurchased plus accrued and unpaid interest and Liquidated Damages, if any, on the Notes repurchased to the date of purchase, subject to the rights of
Holders on the relevant record date to receive interest due on the relevant interest payment date (the “Change of Control Payment”). Within 30 days following any Change of Control, the Issuers will mail a notice to each Holder
setting forth the procedures governing the Change of Control Offer as required by the Indenture. 
  
 (b) If the Issuers or a Restricted Subsidiary of the Issuers consummates any Asset Sales, within 30 days of each date on which the
aggregate amount of Excess Proceeds exceeds $10.0 million, MagnaChip will commence an offer to all Holders of Notes and all holders of other Indebtedness that is pari passu with the Notes containing provisions similar to those set forth in
the Indenture with respect to offers to purchase or redeem with the proceeds of sales of assets (an “Asset Sale Offer”) pursuant to Section 3.09 of the Indenture to purchase the maximum principal amount of Notes and such other
pari passu Indebtedness that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the 
  

 A1-5 

 principal amount thereof plus accrued and unpaid interest and Liquidated Damages, if any, thereon
to the date of purchase, in accordance with the procedures set forth in the Indenture. To the extent that the aggregate amount of Notes and other pari passu Indebtedness tendered pursuant to an Asset Sale Offer is less than the Excess
Proceeds, MagnaChip (or such Restricted Subsidiary) may use such deficiency for any purpose not otherwise prohibited by the Indenture. If the aggregate principal amount of Notes and other pari passu Indebtedness tendered into such Asset Sale
Offer exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and such other pari passu Indebtedness to be purchased on a pro rata basis. Holders of Notes that are the subject of an offer to purchase will receive an
Asset Sale Offer from the Issuers prior to any related purchase date and may elect to have such Notes purchased by completing the form entitled “Option of Holder to Elect Purchase” attached to the Notes. 
  
 (8) NOTICE OF
REDEMPTION. Notice of redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each Holder whose Notes are to be redeemed at its registered address, except that redemption
notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance of the Notes or a satisfaction or discharge of the Indenture. Notes in denominations larger than $1,000 may be redeemed in
part but only in whole multiples of $1,000, unless all of the Notes held by a Holder are to be redeemed. 
  
 (9) DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and the Issuers may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Issuers need not exchange or register the transfer of any Note or portion of a
Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the Issuers need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed or
during the period between a record date and the corresponding Interest Payment Date. 
  
 (10) REDEMPTION FOR CHANGES IN TAXES. The Issuers may redeem
each series of the Notes, in whole but not in part, at their discretion at any time at a redemption price equal to the principal amount thereof, together with accrued and unpaid interest and Liquidated Damages, if any, to the date fixed by the
Issuers for redemption (a “Tax Redemption Date”) and all Additional Amounts (if any) then due and which will become due on the Tax Redemption Date as a result of the redemption or otherwise (subject to the right of Holders on the
relevant record date to receive interest due on the relevant Interest Payment Date and Additional Amounts (if any) in respect thereof), if on the next date on which any amount would be payable in respect of the Notes, the Issuers have or would be
required to pay Additional Amounts, and the Issuers cannot avoid any such payment obligation taking reasonable measures available to them, as a result of:  
  
 (a) any change in, or amendment to, the laws or treaties (or any regulations, or rulings promulgated
thereunder) of the relevant Tax Jurisdiction affecting taxation which change or amendment has not been publicly announced as formally adopted and which becomes effective on or after the Issue Date (or, if the relevant Tax Jurisdiction has changed
since the Issue Date, the date on which the then current Tax Jurisdiction became the applicable Tax Jurisdiction under this Indenture); or 
  
 (b) any change in, or amendment to, the existing official position or the introduction of an official position regarding the application,
administration or interpretation of 
  

 A1-6 

 such laws, treaties, regulations or rulings (including a holding, judgment or order by a court of
competent jurisdiction or a change in published practice), which change, amendment, application or interpretation has not been publicly announced as formally adopted and becomes effective on or after the Issue Date (or, if the relevant Tax
Jurisdiction has changed since the Issue Date, the date on which the then current Tax Jurisdiction became the applicable Tax Jurisdiction under this Indenture). 
  
 The Issuers will not give any such notice of redemption earlier than 90 days prior to the earliest date on
which the Issuers would be obligated to make such payment or withholding if a payment in respect of the Notes were then due. Prior to the publication or, where relevant, mailing of any notice of redemption of the Notes pursuant to the foregoing, the
Issuers will deliver the Trustee an opinion of counsel, the choice of such counsel to be subject to the prior written approval of the Trustee (such approval not to be unreasonably withheld) to the effect that there has been such change or amendment
which would entitle the Issuers to redeem the Notes hereunder and the Issuers cannot avoid any obligation to pay Additional Amounts taking reasonable measures available. 
  
 (11) PERSONS DEEMED OWNERS. The
registered Holder of a Note may be treated as its owner for all purposes. 
  
 (12) AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the Indenture or the Notes or the Guarantees may be amended or
supplemented with the consent of the Holders of at least a majority in aggregate principal amount of the then outstanding Notes including Additional Notes, if any, voting as a single class, and any existing Default or Event or Default or compliance
with any provision of the Indenture or the Notes or the Guarantees may be waived with the consent of the Holders of a majority in aggregate principal amount of the then outstanding Notes including Additional Notes, if any, voting as a single class.
Without the consent of any Holder of a Note, the Indenture or the Notes or the Guarantees may be amended or supplemented to cure any ambiguity, defect or inconsistency, to provide for uncertificated Notes in addition to or in place of certificated
Notes, to provide for the assumption of the Issuers’ or a Guarantor’s obligations to Holders of the Notes and Note Guarantees in case of a merger or consolidation, to make any change that would provide any additional rights or benefits to
the Holders of the Notes or that does not adversely affect the legal rights under the Indenture of any such Holder, to comply with the requirements of the SEC in order to effect or maintain the qualification of the Indenture under the TIA, to
conform the text of the Indenture, the Notes or the Guarantees to any provision of the “Description of the senior subordinated notes” section of the Issuers’ Offering Memorandum dated December 16, 2004, relating to the initial
offering of the Notes, to the extent that such provision in that “Description of senior subordinated notes” was intended to be a verbatim recitation of a provision of the Indenture, the Notes or the Guarantees; to provide for the issuance
of Additional Notes in accordance with the limitations set forth in the Indenture, or to allow any Guarantor to execute a supplemental indenture to the Indenture and/or a Note Guarantee with respect to the Notes. 
  
 (13) DEFAULTS AND
REMEDIES. Events of Default include: (i) default for 30 days in the payment when due of interest on, or Liquidated Damages, if any, with respect to the Notes, whether or not prohibited by the subordination
provisions of the indenture; (ii) default in the payment when due (at maturity, upon redemption or otherwise) of the principal of, or premium, if any, on, the Notes, whether or not prohibited by the subordination provisions of the indenture; (iii)
failure by MagnaChip or any of its Restricted Subsidiaries to comply with Section 4.10, 4.15 or 5.01 of the Indenture; (iv) failure by MagnaChip or any of its Restricted Subsidiaries for 60 days after notice to MagnaChip by the Trustee or the
Holders of at least 25% in aggregate 
  

 A1-7 

 principal amount of the Notes then outstanding voting as a single class to comply with any of the other
agreements in the Indenture; (v) default under certain other agreements relating to Indebtedness of MagnaChip or any of its Restricted Subsidiaries which default (a) is caused by a failure to pay principal of, or interest or premium, if any, on,
such Indebtedness prior to the expiration of the grace period provided in such Indebtedness on the date of such default (a “Payment Default”) or (b) results in the acceleration of such Indebtedness prior to its express maturity;
(vi) certain final judgments for the payment of money that remain undischarged for a period of 60 days; (vii) certain events of bankruptcy or insolvency with respect to MagnaChip or any of its Restricted Subsidiaries that is a Significant Subsidiary
or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary and (viii) except as permitted by the Indenture, any Guarantee is held in any judicial proceeding to be unenforceable or invalid or ceases for
any reason to be in full force and effect or any Guarantor or any Person acting on its behalf denies or disaffirms its obligations under such Guarantor’s Guarantee. If any Event of Default occurs and is continuing, the Trustee or the Holders of
at least 25% in aggregate principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or
insolvency, all outstanding Notes will become due and payable immediately without further action or notice. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority
in aggregate principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or
Event of Default relating to the payment of principal or interest or premium or Liquidated Damages, if any,) if it determines that withholding notice is in their interest. The Holders of a majority in aggregate principal amount of the then
outstanding Notes by notice to the Trustee may, on behalf of the Holders of all of the Notes, rescind an acceleration or waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of
Default in the payment of interest or premium or Liquidated Damages, if any, on, or the principal of, the Notes. The Issuers are required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Issuers are
required, upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or Event of Default. 
  
 (14) TRUSTEE DEALINGS WITH THE ISSUERS.
The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Issuers or their Affiliates, and may otherwise deal with the Issuers or their Affiliates, as if it were not the Trustee.

  
 (15) NO
RECOURSE AGAINST OTHERS. A director, officer, employee, incorporator or stockholder of the Issuers or any of the Guarantors, as such, will not have any liability for any obligations of
the Issuers or the Guarantors under the Notes, the Note Guarantees or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the issuance of the Notes. 
  
 (16) AUTHENTICATION. This Note will not be valid until authenticated by the manual signature of the
Trustee or an authenticating agent. 
  
 (17)
ABBREVIATIONS. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act). 
  

 A1-8 

 (18) ADDITIONAL RIGHTS OF
HOLDERS OF RESTRICTED GLOBAL NOTES AND RESTRICTED DEFINITIVE NOTES. In addition to the rights
provided to Holders of Notes under the Indenture, Holders of Restricted Global Notes and Restricted Definitive Notes will have all the rights set forth in the Registration Rights Agreement dated as of December 23, 2004, among the Issuers, the
Guarantors and the other parties named on the signature pages thereof or, in the case of Additional Notes, Holders of Restricted Global Notes and Restricted Definitive Notes will have the rights set forth in one or more registration rights
agreements, if any, among the Issuers, the Guarantors and the other parties thereto, relating to rights given by the Issuers and the Guarantors to the purchasers of any Additional Notes (collectively, the “Registration Rights
Agreement”). 
  
 (19) CUSIP
NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Issuers have caused CUSIP numbers to be printed on the Notes, and the Trustee may use CUSIP
numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption, and reliance may be placed only on the other
identification numbers placed thereon. 
  
 (20)
GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THIS NOTE AND THE NOTE GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. 
  
 The Issuers will furnish to any Holder upon written request and without charge a copy of the Indenture and/or the Registration Rights Agreement. Requests may be made to: 
  
 MagnaChip Semiconductor, Ltd. 
 1, Hyangjeong-dong 
 Hungduk-gu 
 Cheongju-si, 361-725 
 Korea 
 Attention: Chief
Financial Officer 
  

 A1-9 

 ASSIGNMENT FORM 
  
 To assign this Note, fill in the form below: 
  

			
	 (I) or (we) assign and transfer this Note to:
	 	___________________________________________________________________________
	 	 	(Insert assignee’s legal name)

  
 ______________________________________________________________________________________________________________________________ 

	
	(Insert assignee’s soc. sec. or tax I.D. no.)

  
 ______________________________________________________________________________________________________________________________ 
  
 ______________________________________________________________________________________________________________________________ 
  
 ______________________________________________________________________________________________________________________________ 
  
 ______________________________________________________________________________________________________________________________ 

	
	(Print or type assignee’s name, address and zip code)

  

	
	and irrevocably appoint _________________________________________________________________________________________________________ to transfer this Note on the books of the Issuers. The
agent may substitute another to act for him.

  
 Date: ________________ 
  

			
	 	 	Your Signature:
                                        
                                       
 
	 	 	(Sign exactly as your name appears on the face of this Note)

  

	
	Signature Guarantee*: __________________________

  

	*	Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). 

  

 A1-10 

 OPTION OF HOLDER TO ELECT
PURCHASE 
  
 If you want to elect to have this Note
purchased by the Issuers pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate box below: 
  
 ¬Section
4.10                            ¬Section 4.15 
  
 If you want to elect to have only part of the Note purchased by the Issuers
pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount you elect to have purchased: 
  
 $                     
  
 Date:                     

  

			
	 	 	Your Signature:
                                        
                                       
 
	 	 	 (Sign exactly as your name appears on the face of this
 Note)

		
	 	 	Tax Identification No.:
                                        
                            

  
 Signature Guarantee*:
_______________________________ 
  

	*	Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). 

  
  

 A1-11 

 SCHEDULE OF EXCHANGES OF
INTERESTS IN THE GLOBAL NOTE * 
  
 The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another
Global Note or Definitive Note for an interest in this Global Note, have been made: 
  

									
	 Date of Exchange

	 	 Amount of
 decrease in
 Principal Amount
 of this
 Global Note

	 	 Amount of
 increase in
 Principal Amount
 of this
 Global Note

	  	 Principal Amount
 of this Global Note
following such
 decrease
 (or increase)

	  	 Signature of
 authorized officer
 of Trustee or
 Custodian

  

	*	This schedule should be included only if the Note is issued in global form. 

  

 A1-12 

 Exhibit A 
  
 [Face of Regulation S Temporary Global Note] 
  
 CUSIP/CINS                      
  
 8% Senior Subordinated Notes due 2014 
  

			
	No.         	  	$                

  
 MAGNACHIP SEMICONDUCTOR
S.A. 
 and 
 MAGNACHIP
SEMICONDUCTOR FINANCE COMPANY 
  
 promises to pay to
                 or registered assigns, 
  
 the principal sum of
                                        
                                        
DOLLARS on                     , 2014. 
  
 Interest Payment Dates: June 1 and December 15 
  
 Record Dates: June 1 and December 1 
  
 Dated: December     , 2004 
  

			
	MAGNACHIP SEMICONDUCTOR S.A.
		
	By:	 	  

	Name:	 	 
	Title:	 	 
	
	MAGNACHIP SEMICONDUCTOR FINANCE COMPANY
		
	By:	 	  

	Name:	 	 
	Title:	 	 

  

			
	 This is one of the Notes referred to

	 in the within-mentioned Indenture:

	
	 THE BANK OF NEW YORK,

	 as Trustee

		
	 By:
	 	  

	Authorized Signatory

  
  

 A2-1 

 [Back of Regulation S Temporary Global Note] 
 8% Senior Subordinated Notes due 2014 
  
 THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE
HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON. 
  
 THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF,
AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART
PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR
WRITTEN CONSENT OF THE ISSUERS. 
  
 UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR
IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY
OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO
THE ISSUERS OR THEIR AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN. 
  
 THIS NOTE HAS NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND ACCORDINGLY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH
IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A “QIB”), (B)
IT IS NOT A U.S. PERSON, IS NOT ACQUIRING THIS NOTE FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL
“ACCREDITED INVESTOR” (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN “IAI”), (2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD REFERRED TO UNDER RULE 144(k) (TAKING INTO ACCOUNT THE
PROVISIONS OF RULE 144(d) UNDER THE SECURITIES ACT, IF APPLICABLE) UNDER THE 
  

 A2-2 

 SECURITIES ACT AS IN EFFECT ON THE DATE OF THE TRANSFER OF THIS NOTE, RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A)
TO THE ISSUERS OR ANY SUBSIDIARY THEREOF, (B) TO A PERSON WHOM THE HOLDER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN
AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE REGISTRATION OF TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN ACCRETED
VALUE/AGGREGATE PRINCIPAL AMOUNT OF NOTES AT THE TIME OF TRANSFER OF LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUERS THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT
OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE OR ANY INTEREST HEREIN WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND
SUBMIT THIS CERTIFICATE TO THE TRUSTEE. AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE
INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS.” 
  
 Capitalized terms used herein have the meanings assigned to them in the Indenture referred to below unless otherwise indicated. 
  
 (1) INTEREST. MagnaChip
Semiconductor S.A., a Luxembourg public limited liability company (societe anonyme) (“MagnaChip”), and MagnaChip Semiconductor Finance Company, a Delaware corporation (“Finance Company” and together with
MagnaChip, the “Issuers”), jointly and severally promise to pay interest on the principal amount of this Note at a rate equal to 8% per annum from December 23, 2004 until maturity and shall pay the Liquidated Damages, if any,
payable pursuant to Section 4 of the Registration Rights Agreement referred to below. The Issuers will pay interest and Liquidated Damages, if any, semi-annually in arrears on June 15 and December 15 of each year, or if any such day is not a
Business Day, on the next succeeding Business Day (each, an “Interest Payment Date”). Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of
issuance; provided that if there is no existing Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue
from such next succeeding Interest Payment Date; provided further that the first Interest Payment Date shall be June 15, 2005. The Issuers will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue principal and premium, if any, from time to time on demand at a rate that is 1% per annum in excess of the rate then in effect to the extent lawful; it will pay interest (including post- 
  

 A2-3 

 petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages, if any, (without regard to any applicable grace periods) from time to time on demand at the same rate to the extent lawful. Interest will be computed on the basis of a 360-day year of twelve 30-day months 
  
 Until this Regulation S Temporary Global Note is exchanged for one or more
Regulation S Permanent Global Notes, the Holder hereof shall not be entitled to receive payments of interest hereon; until so exchanged in full, this Regulation S Temporary Global Note shall in all other respects be entitled to the same benefits as
other Notes under the Indenture. 
  
 (2)
METHOD OF PAYMENT. The Issuers will pay interest on the Notes (except defaulted interest) and Liquidated Damages, if any, to the Persons who are registered Holders of Notes at the
close of business on the June 1 or December 1 next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with
respect to defaulted interest. The Notes will be payable as to principal, premium and Liquidated Damages, if any, and interest at the office or agency of the Issuers maintained for such purpose within or without the City and State of New York, or,
at the option of the Issuers, payment of interest and Liquidated Damages, if any, may be made by check mailed to the Holders at their addresses set forth in the register of Holders; provided that payment by wire transfer of immediately
available funds will be required with respect to principal of and interest, premium and Liquidated Damages, if any, on, all Global Notes and all other Notes the Holders of which will have provided wire transfer instructions to the Issuers or the
Paying Agent. Such payment will be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. 
  
 (3) PAYING AGENT AND REGISTRAR.
Initially, The Bank of New York, the Trustee under the Indenture, will act as Paying Agent and Registrar. The Issuers may change any Paying Agent or Registrar without notice to any Holder. MagnaChip or any of its Subsidiaries may act in any such
capacity. 
  
 (4)
INDENTURE. The Issuers issued the Notes under an Indenture dated as of December 23, 2004 (the “Indenture”) among the Issuers, the Guarantors and the Trustee. The terms of the Notes include those
stated in the Indenture and those made part of the Indenture by reference to the TIA. The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms. To the extent any provision of this
Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling. The Notes are unsecured obligations of the Issuers. The Indenture does not limit the aggregate principal amount of Notes
that may be issued thereunder. 
  
 (5)
OPTIONAL REDEMPTION. 
  
 (a) At any time prior to December 15, 2007, MagnaChip may on any one or more occasions redeem up to 35% of the aggregate principal amount of Notes issued under the Indenture (including any Additional Notes issued
after the Issue Date) at a redemption price of 108% of the principal amount thereof, plus accrued and unpaid interest and Liquidated Damages, if any, to the redemption date, with the net cash proceeds of one or more Public Equity Offerings or
a contribution to MagnaChip’s common equity capital made with the net cash proceeds of a concurrent Public Equity Offering of US LLC or any of its Subsidiaries; provided that: 
  
 (1) at least 65% of the aggregate principal amount of Notes originally
issued under this Indenture (including Additional Notes issued after the date of the Indenture) (excluding Notes held by MagnaChip and its Subsidiaries) remains outstanding immediately after the occurrence of such redemption; and 
  

 A2-4 

 (2) the redemption occurs within 90 days of the date of the closing of such Public Equity Offering or
equity contributions. 
  
 (b) On or after
December 15, 2009, MagnaChip may redeem all or a part of the Notes, upon not less than 30 nor more than 60 days’ prior notice mailed by first-class mail to each holder’s registered address, at the redemption prices (expressed as
percentages of principal amount) set forth below plus accrued and unpaid interest and Liquidated Damages, if any, on the Notes redeemed, to the applicable redemption date, if redeemed during the twelve-month period beginning on December 15 of
the years indicated below, subject to the rights of holders of Notes on the relevant record date to receive interest due on the relevant interest payment date: 
  

				
	 Year

	  	Percentage

	 
	 2009
	  	104.000	%
	 2010
	  	102.667	%
	 2011
	  	101.333	%
	 2012 and thereafter
	  	100.000	%

  
 At
any time prior to December 15, 2009, MagnaChip may also redeem all or a part of the Notes (including any Additional Notes issued after the Issue Date), upon not less than 30 nor more than 60 days’ prior notice mailed by first-class mail to each
holder’s registered address, at a redemption price equal to 100% of the principal amount of Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest and Liquidated Damages, if any, to the redemption date, subject
to the rights of holders of Notes on the relevant record date to receive interest due on the relevant interest payment date. 
  
 Unless MagnaChip defaults in the payment of the redemption price, interest will cease to accrue on the Notes or portions thereof called
for redemption on the applicable redemption date. 
  
 (6) MANDATORY REDEMPTION. 
  
 The Issuers are not required to make mandatory redemption or sinking fund payments with respect to the Notes. 
  
 (7) REPURCHASE AT THE OPTION OF HOLDER.

  
 (a) If a Change of Control occurs, the
Issuers will make an offer (a “Change of Control Offer”) to each Holder to repurchase all or any part (equal to $1,000 or an integral multiple of $1,000 in excess of $1,000) of that Holder’s Notes at a purchase price in cash
equal to 101% of the aggregate principal amount of Notes repurchased plus accrued and unpaid interest and Liquidated Damages, if any, on the Notes repurchased to the date of purchase, subject to the rights of Holders on the relevant record
date to receive interest due on the relevant interest payment date (the “Change of Control Payment”). Within 10 days following any Change of Control, the Issuers will mail a notice to each Holder setting forth the procedures
governing the Change of Control Offer as required by the Indenture. 
  

 A2-5 

 (b) If the Issuers or a Restricted Subsidiary of the Issuers consummates any Asset Sales,
within 30 days of each date on which the aggregate amount of Excess Proceeds exceeds $10.0 million, MagnaChip will commence an offer to all Holders of Notes and all holders of other Indebtedness that is pari passu with the Notes containing
provisions similar to those set forth in the Indenture with respect to offers to purchase or redeem with the proceeds of sales of assets (an “Asset Sale Offer”) pursuant to Section 3.09 of the Indenture to purchase the maximum
principal amount of Notes and such other pari passu Indebtedness that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof plus accrued and unpaid interest and
Liquidated Damages, if any, thereon to the date of purchase, in accordance with the procedures set forth in the Indenture. To the extent that the aggregate amount of Notes and other pari passu Indebtedness tendered pursuant to an Asset Sale
Offer is less than the Excess Proceeds, MagnaChip (or such Restricted Subsidiary) may use such deficiency for any purpose not otherwise prohibited by the Indenture. If the aggregate principal amount of Notes and other pari passu Indebtedness
tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and such other pari passu Indebtedness to be purchased on a pro rata basis. Holders of Notes that are the subject of an offer
to purchase will receive an Asset Sale Offer from the Issuers prior to any related purchase date and may elect to have such Notes purchased by completing the form entitled “Option of Holder to Elect Purchase” attached to the Notes.

  
 (8) NOTICE
OF REDEMPTION. Notice of redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each Holder whose Notes are to be redeemed at its registered address, except
that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance of the Notes or a satisfaction or discharge of the Indenture. Notes in denominations larger than $1,000 may be
redeemed in part but only in whole multiples of $1,000, unless all of the Notes held by a Holder are to be redeemed. 
  
 (9) DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and the Issuers may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Issuers need not exchange or register the transfer of any Note or portion of a
Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the Issuers need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed or
during the period between a record date and the corresponding Interest Payment Date. 
  
 This Regulation S Temporary Global Note is exchangeable in whole or in part for one or more Global Notes only (i) on or after the termination of the 40-day distribution compliance period (as defined in Regulation S)
and (ii) upon presentation of certificates (accompanied by an Opinion of Counsel, if applicable) required by Article 2 of the Indenture. Upon exchange of this Regulation S Temporary Global Note for one or more Global Notes, the Trustee shall cancel
this Regulation S Temporary Global Note. 
  
 (10)
REDEMPTION FOR CHANGES IN TAXES. The Issuers may redeem each series of the Notes, in whole but not in part, at their discretion at any time at a redemption price equal to the principal amount thereof, together with accrued and unpaid interest
and Liquidated Damages, if any, to the date fixed by the Issuers for redemption (a “Tax Redemption Date”) and all Additional Amounts (if any) then due and which will become due on the Tax Redemption Date as 
  

 A2-6 

 a result of the redemption or otherwise (subject to the right of Holders on the relevant record date to
receive interest due on the relevant Interest Payment Date and Additional Amounts (if any) in respect thereof), if on the next date on which any amount would be payable in respect of the Notes, the Issuers have or would be required to pay Additional
Amounts, and the Issuers cannot avoid any such payment obligation taking reasonable measures available to them, as a result of: 
  
 (a) any change in, or amendment to, the laws or treaties (or any regulations, or rulings promulgated thereunder) of the relevant Tax
Jurisdiction affecting taxation which change or amendment has not been publicly announced as formally adopted and which becomes effective on or after the Issue Date (or, if the relevant Tax Jurisdiction has changed since the Issue Date, the date on
which the then current Tax Jurisdiction became the applicable Tax Jurisdiction under this Indenture); or 
  
 (b) any change in, or amendment to, the existing official position or the introduction of an official position regarding the application,
administration or interpretation of such laws, treaties, regulations or rulings (including a holding, judgment or order by a court of competent jurisdiction or a change in published practice), which change, amendment, application or interpretation
has not been publicly announced as formally adopted and becomes effective on or after the Issue Date (or, if the relevant Tax Jurisdiction has changed since the Issue Date, the date on which the then current Tax Jurisdiction became the applicable
Tax Jurisdiction under this Indenture). 
  
 The
Issuers will not give any such notice of redemption earlier than 90 days prior to the earliest date on which the Issuers would be obligated to make such payment or withholding if a payment in respect of the Notes were then due. Prior to the
publication or, where relevant, mailing of any notice of redemption of the Notes pursuant to the foregoing, the Issuers will deliver the Trustee an opinion of counsel, the choice of such counsel to be subject to the prior written approval of the
Trustee (such approval not to be unreasonably withheld) to the effect that there has been such change or amendment which would entitle the Issuers to redeem the Notes hereunder and the Issuers cannot avoid any obligation to pay Additional Amounts
taking reasonable measures available. 
  
 (11)
PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as its owner for all purposes. 
  
 (12) AMENDMENT, SUPPLEMENT AND
WAIVER. Subject to certain exceptions, the Indenture or the Notes or the Guarantees may be amended or supplemented with the consent of the Holders of at least a majority in aggregate principal amount of the then
outstanding Notes including Additional Notes, if any, voting as a single class, and any existing Default or Event or Default or compliance with any provision of the Indenture or the Notes or the Guarantees may be waived with the consent of the
Holders of a majority in aggregate principal amount of the then outstanding Notes including Additional Notes, if any, voting as a single class. Without the consent of any Holder of a Note, the Indenture or the Notes or the Guarantees may be amended
or supplemented to cure any ambiguity, defect or inconsistency, to provide for uncertificated Notes in addition to or in place of certificated Notes, to provide for the assumption of the Issuers’ or a Guarantor’s obligations to Holders of
the Notes and Note Guarantees in case of a merger or consolidation, to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights under the Indenture of any
such Holder, to comply with the requirements of the SEC in order to effect or maintain the qualification of the Indenture under the TIA, to conform the text of the Indenture, the Notes or the Guarantees to any provision of the “Description of
the senior subordinated notes” section of the 
  

 A2-7 

 Issuers’ Offering Memorandum dated December 16, 2004, relating to the initial offering of the Notes,
to the extent that such provision in that “Description of the senior subordinated notes” was intended to be a verbatim recitation of a provision of the Indenture, the Notes or the Guarantees; to provide for the issuance of Additional Notes
in accordance with the limitations set forth in the Indenture, or to allow any Guarantor to execute a supplemental indenture to the Indenture and/or a Note Guarantee with respect to the Notes. 
  
 (13) DEFAULTS AND
REMEDIES. Events of Default include: (i) default for 30 days in the payment when due of interest on, or Liquidated Damages, if any, with respect to the Notes, whether or not prohibited by the subordination
provisions of the indenture; (ii) default in the payment when due (at maturity, upon redemption or otherwise) of the principal of, or premium, if any, on, the Notes, whether or not prohibited by the subordination provisions of the indenture; (iii)
failure by MagnaChip or any of its Restricted Subsidiaries to comply with Section 4.10, 4.15 or 5.01 of the Indenture; (iv) failure by MagnaChip or any of its Restricted Subsidiaries for 60 days after notice to MagnaChip by the Trustee or the
Holders of at least 25% in aggregate principal amount of the Notes then outstanding voting as a single class to comply with any of the other agreements in the Indenture; (v) default under certain other agreements relating to Indebtedness of
MagnaChip or any of its Restricted Subsidiaries which default (a) is caused by a failure to pay principal of, or interest or premium, if any, on, such Indebtedness prior to the expiration of the grace period provided in such Indebtedness on the date
of such default (a “Payment Default”) or (b) results in the acceleration of such Indebtedness prior to its express maturity; (vi) certain final judgments for the payment of money that remain undischarged for a period of 60 days;
(vii) certain events of bankruptcy or insolvency with respect to MagnaChip or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant
Subsidiary; and (viii) except as permitted by the Indenture, any Guarantee is held in any judicial proceeding to be unenforceable or invalid or ceases for any reason to be in full force and effect or any Guarantor or any Person acting on its behalf
denies or disaffirms its obligations under such Guarantor’s Guarantee. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the then outstanding Notes may declare all the
Notes to be due and payable immediately. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency, all outstanding Notes will become due and payable immediately without further action
or notice. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest or premium or Liquidated
Damages, if any,) if it determines that withholding notice is in their interest. The Holders of a majority in aggregate principal amount of the then outstanding Notes by notice to the Trustee may, on behalf of the Holders of all of the Notes,
rescind an acceleration or waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest or premium or Liquidated Damages, if any, on, or the
principal of, the Notes. The Issuers are required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Issuers are required, upon becoming aware of any Default or Event of Default, to deliver to the Trustee
a statement specifying such Default or Event of Default. 
  
 (14) TRUSTEE DEALINGS WITH THE ISSUERS. The Trustee, in its individual or any other capacity, may make loans to, accept
deposits from, and perform services for the Issuers or their Affiliates, and may otherwise deal with the Issuers or their Affiliates, as if it were not the Trustee. 
  

 A2-8 

 (15) NO RECOURSE AGAINST
OTHERS. A director, officer, employee, incorporator or stockholder of the Issuers or any of the Guarantors, as such, will not have any liability for any obligations of the Issuers or the Guarantors under the Notes,
the Note Guarantees or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes. 
  
 (16) AUTHENTICATION. This Note will not be valid until authenticated by the manual signature of the Trustee or an authenticating agent. 
  
 (17) ABBREVIATIONS. Customary abbreviations may be used in the name of
a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act). 
  
 (18) ADDITIONAL
RIGHTS OF HOLDERS. In addition to the rights provided to Holders of Notes under the Indenture, Holders of this Regulation S Temporary Global Note will have all the rights set forth in
the Registration Rights Agreement dated as of December 23, 2004, among the Issuers, the Guarantors and the other parties named on the signature pages thereof or, in the case of Additional Notes, Holders of Restricted Global Notes and Restricted
Definitive Notes will have the rights set forth in one or more registration rights agreements, if any, among the Issuers, the Guarantors and the other parties thereto, relating to rights given by the Issuers and the Guarantors to the purchasers of
any Additional Notes (collectively, the “Registration Rights Agreement”). 
  
 (19) CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security
Identification Procedures, the Issuers have caused CUSIP numbers to be printed on the Notes, and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers
either as printed on the Notes or as contained in any notice of redemption, and reliance may be placed only on the other identification numbers placed thereon. 
  

(20) GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THIS NOTE AND THE
GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. 
  
 The Issuers will furnish to any Holder upon written request and without charge a copy of the Indenture and/or the
Registration Rights Agreement. Requests may be made to: 
  
 MagnaChip
Semiconductor, Ltd. 
 1, Hyangjeong-dong 
 Hungduk-gu 

Cheongju-si, 361-725 
 Korea 
 Attention: Chief Financial Officer 
  

 A2-9 

 ASSIGNMENT FORM 
  
 To assign this Note, fill in the form below: 
  

			
	 (I) or (we) assign and transfer this Note to:
	 	_____________________________________________________________________________________
	 	 	 (Insert assignee’s legal name)

  
  
 ______________________________________________________________________________________________________________________________ 
 (Insert assignee’s soc. sec. or tax I.D. no.) 
  
 ______________________________________________________________________________________________________________________________ 
  
 ______________________________________________________________________________________________________________________________ 
  
 ______________________________________________________________________________________________________________________________ 
  
 ______________________________________________________________________________________________________________________________ 
 (Print or type assignee’s name, address and zip code) 
  
 and irrevocably appoint ________________________________________________________________________________________________ 
 to
transfer this Note on the books of the Issuers. The agent may substitute another to act for him. 
  
 Date:                      
  

			
	 Your Signature:                                   
                      

	(Sign exactly as your name appears on the face of this Note)

 Signature Guarantee*:
                                        
         
  

	*	Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). 

  

 A2-10 

 OPTION OF HOLDER TO ELECT
PURCHASE 
  
 If you want to elect to have this Note
purchased by the Issuers pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate box below: 
  
 ¬Section
4.10                            ¬Section 4.15 
  
 If you want to elect to have only part of the Note purchased by the Issuers
pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount you elect to have purchased: 
  
 $                     
  
 Date:                     

  

			
	 Your Signature:                                   
                          

	 (Sign exactly as your name appears on the face of this
 Note)

	
	 Tax Identification No.:                                 
                

  
 Signature Guarantee*:
                                        
             
  

	*	Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). 

  

 A2-11 

 SCHEDULE OF EXCHANGES OF
INTERESTS IN THE REGULATION S TEMPORARY GLOBAL NOTE 
  
 The following exchanges of a part of this Regulation S Note for an interest in another Global Note, or exchanges of a part of another other Restricted
Global Note for an interest in this Regulation S Temporary Global Note, have been made: 
  

									
	 Date of Exchange

	 	 Amount of
 decrease in
 Principal Amount
 of this
 Global Note

	 	 Amount of
 increase in
 Principal Amount
 of this
 Global Note

	  	 Principal Amount
 of this Global Note
following such
 decrease
 (or increase)

	  	 Signature of
 authorized officer
 of Trustee or
 Custodian

	

  

 A2-12 

 EXHIBIT C 
  
 FORM OF CERTIFICATE OF TRANSFER 
  
 MagnaChip Semiconductor S.A. 
 MagnaChip Semiconductor Finance Company

 1, Hyangjeong-dong 
 Hungduk-gu 
 Cheongju-si, 361-725 
 Korea 
 Attention: Chief Financial Officer 
  
 [Registrar address block] 
  
 Re: 8% Senior Subordinated Notes due 2014 
  
 Reference is hereby made to the Indenture, dated as of December 23, 2004 (the “Indenture”), among MagnaChip Semiconductor S.A., a
Luxembourg public limited liability company (societe anonyme) (“MagnaChip”), MagnaChip Semiconductor Finance Company, a Delaware corporation (“Finance Company” and together with MagnaChip, the
“Issuers”), the Guarantors (as defined) and The Bank of New York, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. 
  
                             , (the “Transferor”) owns and proposes to
transfer the Note[s] or interest in such Note[s] specified in Annex [A] hereto, in the principal amount of $             in such Note[s] or interests (the
“Transfer”), to                              (the “Transferee”), as
further specified in Annex [A] hereto. In connection with the Transfer, the Transferor hereby certifies that: 
  
 [CHECK ALL THAT APPLY] 
  
 1.  ̈ Check if Transferee will take delivery of a beneficial interest in the 144A Global Note or a
Restricted Definitive Note pursuant to Rule 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, the
Transferor hereby further certifies that the beneficial interest or Definitive Note is being transferred to a Person that the Transferor reasonably believes is purchasing the beneficial interest or Definitive Note for its own account, or for one or
more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a “qualified institutional buyer” within the meaning of Rule 144A in a transaction meeting the requirements of
Rule 144A, and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the 144A Global Note and/or the Restricted Definitive Note and in the Indenture and the Securities Act. 
  
 2.  ̈ Check if Transferee will take delivery of a beneficial interest in the Regulation S Temporary Global Note, the Regulation S Permanent Global Note or a Restricted Definitive Note pursuant to Regulation
S. The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a Person in the United
States and (x) at the time the buy order was originated, the Transferee was outside the United States or such Transferor and any Person acting on its behalf reasonably believed and believes that the Transferee was outside the United States or (y)
the transaction was executed in, on or through the facilities of a designated offshore securities market and 
  

 C-1 

 neither such Transferor nor any Person acting on its behalf knows that the transaction was prearranged with a buyer in
the United States, (ii) no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act and, (iii) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act [and (iv) if the proposed transfer is being made prior to the expiration of the Restricted Period, the transfer is not being made to a U.S. Person or for the account or benefit of a U.S. Person (other
than an Initial Purchaser). Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on Transfer enumerated in the Private
Placement Legend printed on the Regulation S Permanent Global Note, the Regulation S Temporary Global Note and/or the Restricted Definitive Note and in the Indenture and the Securities Act. 
  
 3.  ̈ Check and complete if Transferee will take delivery of a beneficial interest in the IAI Global Note or a Restricted Definitive Note pursuant to any provision of the Securities Act other than Rule 144A or
Regulation S. The Transfer is being effected in compliance with the transfer restrictions applicable to beneficial interests in Restricted Global Notes and Restricted Definitive Notes and pursuant to and in accordance with the Securities Act
and any applicable blue sky securities laws of any state of the United States, and accordingly the Transferor hereby further certifies that (check one): 
  
 (a)  ̈ such Transfer is being
effected pursuant to and in accordance with Rule 144 under the Securities Act; 
  
 or 
  
 (b)
 ̈ such Transfer is being effected to the Issuers or a subsidiary thereof; 
  
 or 
  
 (c)  ̈ such Transfer is being
effected pursuant to an effective registration statement under the Securities Act and in compliance with the prospectus delivery requirements of the Securities Act; 
  
 or 
  
 (d)  ̈ such Transfer is being
effected to an Institutional Accredited Investor and pursuant to an exemption from the registration requirements of the Securities Act other than Rule 144A, Rule 144, Rule 903 or Rule 904, and the Transferor hereby further certifies that it has not
engaged in any general solicitation within the meaning of Regulation D under the Securities Act and the Transfer complies with the transfer restrictions applicable to beneficial interests in a Restricted Global Note or Restricted Definitive Notes
and the requirements of the exemption claimed, which certification is supported by (1) a certificate executed by the Transferee in the form of Exhibit D to the Indenture and (2) if such Transfer is in respect of a principal amount of Notes at the
time of transfer of less than $250,000, an Opinion of Counsel provided by the Transferor or the Transferee (a copy of which the Transferor has attached to this certification), to the effect that such Transfer is in compliance with the Securities
Act. Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed
on the IAI Global Note and/or the Restricted Definitive Notes and in the Indenture and the Securities Act. 
  

 C-2 

 4.  ̈ Check if Transferee will take delivery of a beneficial interest in an Unrestricted Global Note or of an Unrestricted Definitive Note. 
  
 (a)  ̈ Check if Transfer is pursuant to Rule
144. (i) The Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of
the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Indenture. 
  
 (b)  ̈ Check if Transfer is Pursuant to Regulation S. (i) The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the
Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no
longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture. 
  
 (c)  ̈ Check if
Transfer is Pursuant to Other Exemption. (i) The Transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with
the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will not be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes or Restricted Definitive Notes and in the Indenture. 
  
 This certificate and the statements contained herein are made for your benefit and the benefit of the Issuers. 
  

			
	

	    [Insert Name of Transferor]
		
	 By:
	 	

	 Name:
	 	 
	 Title:
	 	 

  
 Dated:
                                        

  
  

 C-3 

 ANNEX A TO CERTIFICATE OF TRANSFER 
  

	1.	The Transferor owns and proposes to transfer the following: 

  
 [CHECK ONE OF (a) OR (b)] 
  
 a.  ̈ a beneficial interest in
the: 
  
 (i)    ̈ 144A Global Note (CUSIP                 ), or 
  
 (ii)   ̈ Regulation S Global Note (CUSIP                 ), or 
  
 (iii)  ̈ IAI Global Note (CUSIP                 ); or 
  
 (b)  ̈ a Restricted Definitive Note. 
  

	2.	After the Transfer the Transferee will hold: 

  
 [CHECK ONE] 
  
 (a)  ̈ a beneficial interest in the: 

 
 (i)    ̈ 144A Global Note (CUSIP                 ), or 
  
 (ii)   ̈ Regulation S Global Note (CUSIP                 ), or 
  
 (iii)  ̈ IAI Global Note (CUSIP                 ); or 
  
 (iv)  ̈ Unrestricted Global Note (CUSIP                 ); or 
  
 (b)  ̈ a Restricted Definitive Note; or 
  
 (c)  ̈ an Unrestricted Definitive Note,

  
 in accordance with the terms of the Indenture. 
  
  

 C-4 

 EXHIBIT D 
  
 FORM OF CERTIFICATE OF EXCHANGE 
  
 MagnaChip Semiconductor S.A. 
 MagnaChip Semiconductor Finance Company

 1, Hyangjeong-dong 
 Hungduk-gu 
 Cheongju-si, 361-725 
 Korea 
 Attention: Chief Financial Officer 
  
 [Registrar address block] 
  
 Re: 8% Senior Subordinated Notes due 2014 
  
 (CUSIP             ) 
  
 Reference is hereby made to the Indenture, dated as of December [    ], 2004, among MagnaChip
Semiconductor S.A., a Luxembourg public limited liability company (societe anonyme) (“MagnaChip”), MagnaChip Semiconductor Finance Company, a Delaware corporation (“Finance Company” and together with
MagnaChip, the “Issuers”), the Guarantors (as defined) and The Bank of New York, as Trustee (the “Indenture”). Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

  
                             , (the “Owner”) owns and proposes to exchange
the Note[s] or interest in such Note[s] specified herein, in the principal amount of $             in such Note[s] or interests (the “Exchange”). In connection with
the Exchange, the Owner hereby certifies that: 
  
 1.
Exchange of Restricted Definitive Notes or Beneficial Interests in a Restricted Global Note for Unrestricted Definitive Notes or Beneficial Interests in an Unrestricted Global Note 
  
 (a)  ̈ Check if Exchange is from beneficial interest in a Restricted Global Note to beneficial interest in an Unrestricted Global Note. In connection with the Exchange of the
Owner’s beneficial interest in a Restricted Global Note for a beneficial interest in an Unrestricted Global Note in an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own
account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Global Notes and pursuant to and in accordance with the Securities Act of 1933, as amended (the “Securities
Act”), (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest in an Unrestricted Global Note
is being acquired in compliance with any applicable blue sky securities laws of any state of the United States. 
  
 (b)  ̈ Check if Exchange is from beneficial
interest in a Restricted Global Note to Unrestricted Definitive Note. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the
Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States. 
  

 D-1 

 (c)  ̈ Check if Exchange is from Restricted Definitive Note to beneficial interest in an Unrestricted Global Note. In connection with the Owner’s Exchange of a Restricted Definitive Note for a beneficial interest in an Unrestricted
Global Note, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and
(iv) the beneficial interest is being acquired in compliance with any applicable blue sky securities laws of any state of the United States. 
  
 (d)  ̈ Check if Exchange is from Restricted
Definitive Note to Unrestricted Definitive Note. In connection with the Owner’s Exchange of Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Unrestricted Definitive Note is being acquired
for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the
restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Unrestricted Definitive Note is being acquired in compliance with any
applicable blue sky securities laws of any state of the United States. 
  
 2. Exchange of Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes for Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes 
  
 (a)  ̈ Check if Exchange is from beneficial interest in a Restricted Global Note to Restricted Definitive Note. In connection with the Exchange of the Owner’s beneficial
interest in a Restricted Global Note for a Restricted Definitive Note with an equal principal amount, the Owner hereby certifies that the Restricted Definitive Note is being acquired for the Owner’s own account without transfer. Upon
consummation of the proposed Exchange in accordance with the terms of the Indenture, the Restricted Definitive Note issued will continue to be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the
Restricted Definitive Note and in the Indenture and the Securities Act. 
  
 (b)  ̈ Check if Exchange is from Restricted Definitive Note to beneficial interest in a Restricted Global Note. In connection
with the Exchange of the Owner’s Restricted Definitive Note for a beneficial interest in the [CHECK ONE]  ̈ 144A Global Note,  ̈ Regulation S Global Note,  ̈ IAI Global Note with
an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer and (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to
the Restricted Global Notes and pursuant to and in accordance with the Securities Act, and in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the beneficial interest issued will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the relevant Restricted Global Note and in the Indenture and the Securities Act.

  

 D-2 

 This certificate and the statements contained herein are made for your benefit and the benefit of the
Issuers. 
  

			
	 	 	

	 	 	 [Insert Name of Transferor]

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 

  
 Dated:
                     
  

 D-3 

 EXHIBIT E1 
  
 FORM OF CERTIFICATE FROM 
 ACQUIRING
INSTITUTIONAL ACCREDITED INVESTOR 
  
 MagnaChip Semiconductor S.A. 
 MagnaChip Semiconductor Finance Company 
 1, Hyangjeong-dong 
 Hungduk-gu 
 Cheongju-si, 361-725 
 Korea 
 Attention: Chief Financial Officer 
  
 [Registrar address block] 
  
 Re: 8% Senior Subordinated Notes due 2014 
  
 Reference is hereby made to the Indenture, dated as of December 23, 2004,
among MagnaChip Semiconductor S.A., a Luxembourg public limited liability company (societe anonyme) (“MagnaChip”), MagnaChip Semiconductor Finance Company, a Delaware corporation (“Finance Company” and
together with MagnaChip, the “Issuers”), the Guarantors (as defined) and The Bank of New York, as Trustee (the “Indenture”). Capitalized terms used but not defined herein shall have the meanings given to them in the
Indenture. 
  
 In connection with our proposed purchase of
$             aggregate principal amount of: 
  
 (a)  ̈
        a beneficial interest in a Global Note, or; 
  
 (b)  ̈         a Definitive Note 
  
 we confirm that: 
  
 1. We understand that any subsequent transfer of the Notes or any interest
therein is subject to certain restrictions and conditions set forth in the Indenture and the undersigned agrees to be bound by, and not to resell, pledge or otherwise transfer the Notes or any interest therein except in compliance with, such
restrictions and conditions and the Securities Act of 1933, as amended (the “Securities Act”). 
  
 2. We understand that the offer and sale of the Notes have not been registered under the Securities Act, and that the Notes and any interest therein may
not be offered or sold except as permitted in the following sentence. We agree, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, that if we should sell the Notes or any interest therein, we will do so
only (A) to the Issuers or any subsidiary thereof, (B) in accordance with Rule 144A under the Securities Act to a “qualified institutional buyer” (as defined therein), (C) to an institutional “accredited investor” (as defined
below) that, prior to such transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to you and to the Issuers a signed letter substantially in the form of this letter and, if such transfer is in respect of a principal amount of
Notes, at the time of transfer of less than $250,000, an Opinion of Counsel in form reasonably acceptable to the Issuers to the effect that such transfer is in compliance with the Securities Act, (D) outside the United States in accordance with Rule
904 of Regulation S under the Securities Act, (E) pursuant to the provisions of Rule 144(k) under the Securities Act or (F) pursuant to an effective registration statement under the Securities Act, and we further agree to provide to any Person
purchasing 
  

 E1-1 

 the Definitive Note or beneficial interest in a Global Note from us in a transaction meeting the requirements of clauses
(A) through (E) of this paragraph a notice advising such purchaser that resales thereof are restricted as stated herein. 
  
 3. We understand that, on any proposed resale of the Notes or beneficial interest therein, we will be required to furnish to you and the Issuers such
certifications, legal opinions and other information as you and the Notes may reasonably require to confirm that the proposed sale complies with the foregoing restrictions. We further understand that the Notes purchased by us will bear a legend to
the foregoing effect. 
  
 4. We are an institutional
“accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of
our investment in the Notes, and we and any accounts for which we are acting are each able to bear the economic risk of our or its investment. 
  
 5. We are acquiring the Notes or beneficial interest therein purchased by us for our own account or for one or more accounts (each of which is an
institutional “accredited investor”) as to each of which we exercise sole investment discretion. 
  
 You and the Issuers are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party
in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby. 
  

			
	 	 	

	 	 	[Insert Name of Accredited Investor]
		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 

  
 Dated:
                     
  

 E1-2 

 EXHIBIT E2 
  
 [FORM OF NOTATION OF GUARANTEE] 
  
 For value received, each Guarantor (which term includes any successor Person under the Indenture) has, jointly and severally, unconditionally guaranteed,
to the extent set forth in the Indenture and subject to the provisions in the Indenture dated as of December 23, 2004 (the “Indenture”) MagnaChip Semiconductor S.A., a Luxembourg public limited liability company (societe
anonyme) (“MagnaChip”), MagnaChip Semiconductor Finance Company, a Delaware corporation (“Finance Company” and together with MagnaChip, the “Issuers”), the Guarantors (as defined) and The Bank
of New York, as Trustee (a) the due and punctual payment of the principal of, premium and Liquidated Damages, if any, and interest on, the Notes, whether at maturity, by acceleration, redemption or otherwise, the due and punctual payment of interest
on overdue principal of and interest on the Notes, if any, if lawful, and the due and punctual performance of all other obligations of the Issuers to the Holders or the Trustee all in accordance with the terms of the Indenture and (b) in case of any
extension of time of payment or renewal of any Notes or any of such other obligations, that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise. The obligations of the Guarantors to the Holders of Notes and to the Trustee pursuant to the Note Guarantee and the Indenture are expressly set forth in Article 12 of the Indenture and reference is hereby made to the
Indenture for the precise terms of the Note Guarantee. Each Holder of a Note, by accepting the same, (a) agrees to and shall be bound by such provisions (b) authorizes and directs the Trustee, on behalf of such Holder, to take such action as may be
necessary or appropriate to effectuate the subordination as provided in the Indenture and (c) appoints the Trustee attorney-in-fact of such Holder for such purpose; provided, however, that the Indebtedness evidenced by this Note Guarantee shall
cease to be so subordinated and subject in right of payment upon any defeasance of this Note in accordance with the provisions of the Indenture. 
  
 Capitalized terms used but not defined herein have the meanings given to them in the Indenture. 
  

 E2-1 

 EXHIBIT E2 
  

			
	 [NAME OF GUARANTOR(S)]

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 

  
  

 E2-2 

 EXHIBIT F 
  
 [FORM OF SUPPLEMENTAL INDENTURE 
 TO BE
DELIVERED BY SUBSEQUENT GUARANTORS] 
  
 SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of
                    , 200    , among
                     (the “Guaranteeing Subsidiary”), a subsidiary of
                             (or its permitted successor), a [Delaware] corporation (the
“Company”), the Issuers, the other Guarantors (as defined in the Indenture referred to herein) and                     , as
trustee under the Indenture referred to below (the “Trustee”). 
  
 W I T N E S S E T H 
  
 WHEREAS,
the Issuers have heretofore executed and delivered to the Trustee an indenture (the “Indenture”), dated as of December 23, 2004 providing for the issuance of its Senior Subordinated Notes due 2014 (the “Notes”);

  
 WHEREAS, the Indenture provides that under certain
circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Issuers’ Obligations under the Notes and the
Indenture on the terms and conditions set forth herein (the “Note Guarantee”); and 
  
 WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture. 
  
 NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows: 
  
 1. CAPITALIZED TERMS. Capitalized terms used
herein without definition shall have the meanings assigned to them in the Indenture. 
  
 2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby agrees to provide an unconditional Guarantee on the terms and subject to the conditions set forth in the Note
Guarantee and in the Indenture including but not limited to Article 12 thereof. 
  
 3. NO RECOURSE AGAINST OTHERS. No past, present or future director, officer, employee, incorporator, stockholder or agent of the Guaranteeing Subsidiary, as
such, shall have any liability for any obligations of the Issuers or any Guaranteeing Subsidiary under the Notes, any Note Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of the Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Such waiver may not be effective to waive liabilities
under the federal securities laws and it is the view of the SEC that such a waiver is against public policy. 
  
 4. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE WITHOUT GIVING
EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. 
  

 F-1 

 EXHIBIT F 
  
 6. COUNTERPARTS. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all
of them together represent the same agreement. 
  
 7.
EFFECT OF HEADINGS. The Section headings herein are for convenience only and shall not affect the construction hereof. 
  
 8. THE TRUSTEE. The Trustee shall not be responsible in any manner whatsoever for or in
respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary and the Issuers. 
  

 F-2 

 EXHIBIT F 
  
 IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed and attested, all as of the date first above written.

  
 Dated:
                    , 20     
  

			
	 [GUARANTEEING SUBSIDIARY]

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 
	
	 [ISSUER]

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 
	
	 [ISSUER]

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 
	
	 [EXISTING GUARANTORS]

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 
	
	 [TRUSTEE],

	 as Trustee

		
	 By:
	 	  

	 Authorized Signatory

  

 F-3

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