Exhibit 10.1 

LOAN AGREEMENT 

     LOAN
AGREEMENT, dated as of September 15, 2008, between KEMET Electronics Corporation
and Vishay Intertechnology, Inc. 

     WHEREAS,
Borrower desires to sell to Lender the assets, properties and rights related to
the Business as defined in the Asset Purchase Agreement, dated as of September
15, 2008 (as amended, restated, supplemented or otherwise modified from time to
time the “Asset Purchase
Agreement”), by and among Borrower, as
seller, and Lender, as buyer; 

     WHEREAS,
in connection with the Asset Purchase Agreement, Borrower has requested that
Lender make available a term loan facility; and 

     WHEREAS,
Lender is willing to make such term loan facility available upon and subject to
the terms and conditions set forth herein; 

     NOW,
THEREFORE, in consideration of the premises and the agreements set forth herein,
the parties hereby agree as follows: 

ARTICLE I: DEFINITIONS 

     Section
1.1. Defined Terms. As used in this Agreement, the following terms have the meanings
specified below: 

     “Account” has the meaning set forth in
Section 9-102 of the UCC.

     “Account Debtor” has the meaning set
forth in Section 9-102 of the UCC. 

     “Affiliate” means, as to any Person, any other Person that, directly or indirectly,
controls, is controlled by or is under common control with such Person or is a
director or officer of such Person. For purposes of this definition, the term
“control” (including the terms “controlling,” “controlled by” and “under common
control with”) of a Person means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting interests, by contract or
otherwise.

     “Arcotronics” means Arcotronics America Inc., an Oregon corporation and a
wholly-owned Subsidiary of Parent. 

     “Asset Purchase Agreement” has the
meaning set forth in the recitals hereto. 

     “Borrower” means KEMET Electronics
Corporation, a Delaware corporation.

     “Business Day” means a day other than a Saturday, Sunday or any day on
which commercial banks in New York, New York are authorized or required by law
to close; provided that, when used in connection with the Loans when they are bearing
interest based on LIBOR, the term “Business
Day” shall also exclude any day on which
banks are not open for dealings in Dollar deposits in the London interbank
market. 

     “Closing Date” means the date on which the conditions specified in Section
4.1 are satisfied. 

     “Collateral” has the meaning set forth
in the Security Agreement. 




     “Collateral Account” means that certain deposit account number 751672 maintained
at Depositary Bank. 

     “Collateral Certificate” means a certificate executed by any of the chief financial
officer, chief executive officer, treasurer, or any vice president of Borrower
in the form attached hereto as Exhibit
A; provided that Borrower shall not be
required to make any certifications to Lender or deliver to Lender any other
information or documents to the extent that Borrower reasonably believes that
making such certifications or the disclosure of such information or documents to
Lender is not consistent with, or is likely to violate, applicable competition
laws, provided further, that if Lender reasonably determines that making such certifications or
the disclosure of such information or documents is necessary for Borrower to
comply with Section 5.8, Lender and Borrower shall engage a third-party
administrator to perform collateral monitoring services, and Borrower shall be
required to deliver such information to the administrator who shall not share
such information with Lender. 

     “Commitment” means $15,000,000; as such amount may be reduced from time to time
pursuant to the terms of this Agreement. 

     “Control Agreement” means the deposit account control agreement to be entered
into among Borrower, Lender and Depositary Bank with respect to the Collateral
Account in form and substance reasonably satisfactory to Lender. 

     “Credit Documents” means this Agreement, the Security Agreement, each
Collateral Certificate and the Control Agreement. 

     “Default” means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default. 

     “Depositary Bank” shall mean Wachovia
Bank, National Association.

     “Dollars” or “$” means the lawful money
of the United States of America. 

     “Domestic Receivables” means any sale represented by an Account for which the
address of the Account Debtor on the invoice evidencing such Account is located
inside the United States of America. 

     “Event of Default” has the meaning set
forth in Article VI. 

     
“Facility Agreement” means the Senior Facility Agreement with UniCredit Banca d’Impresa
S.p.A. dated as of October 12, 2007, as amended, restated or otherwise modified
prior to the date hereof.

     “FEC” means The Forest Electric Company, an Illinois corporation and
wholly-owned Subsidiary of Parent. 

     “Foreign Receivables” means any sale represented by an Account for which the
address of the Account Debtor on the invoice evidencing such Account is located
outside the United States. 

     “GAAP” means generally accepted accounting principles in the United States of
America as in effect from time to time set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and the statements and pronouncements of the
Financial Accounting Standards Board, or in such other statements by such other
entity as may be in general use by significant segments
of the accounting profession, that are applicable to the circumstances as of the
date of determination. 




     “Governing Documents” means, with respect to any person, (a) the articles of
incorporation or certificate of incorporation (or equivalent organizational
document) of such person, (b) the bylaws (or equivalent governing document) of
such person, and (c) any document setting forth the manner of election and
duties of the directors or managing members of such Person (if any) and the
designation, amount or relative rights, limitations and preferences of any class
or series of such Person’s stock. 

     “Governmental Authority” means the government of the United States of America, any
other nation or any political subdivision thereof, whether state 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. 

     “Indebtedness” of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to loans or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
under conditional sale or other title retention agreements relating to property
acquired by such Person, (d) all obligations of such Person in respect of the
deferred purchase price of property or services, (e) all Indebtedness of others
secured by any Lien on property owned or acquired by such Person, whether or not
the Indebtedness secured thereby has been assumed (provided that the amount of any
Indebtedness under this clause (e) secured by any Lien on any particular
property shall be limited to the lesser of the fair market value of such
property and the amount of all Indebtedness of others secured by Liens on such
property), (f) all guarantees by such Person of Indebtedness of others
(provided
that the amount of any Indebtedness under this clause (f) subject to any
particular guarantee shall be limited to the lesser of such person’s maximum
liability under any such guarantee and the amount of Indebtedness of others
guaranteed by such guarantee), (g) obligations that are required to be
classified and accounted for as capital leases on a balance sheet of such Person
under generally accepted accounting principles in the United States of America,
(h) all obligations, contingent or otherwise, of such Person as an account party
in respect of letters of credit and (i) all obligations, contingent or
otherwise, of such Person in respect of bankers’ acceptances. The Indebtedness
of any Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such Person
is liable therefor as a result of such Person’s ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor. The Indebtedness
of any Person shall not include current accounts payable incurred in the
ordinary course of business. 

     “Indenture” means that certain Indenture dated as of November 1, 2006, as amended,
restated, supplemented or otherwise modified from time to time in accordance
with its terms, between Parent and Wilmington Trust Company, a Delaware banking
corporation, as trustee, as amended, restated or otherwise modified prior to the
date hereof. 

     “Interest Period” means, initially, the period commencing on the Closing Date
for the Loan and thereafter on the last day of the immediately preceding
Interest Period, as the case may be, and ending on the numerically corresponding
day (or, if there is no numerically corresponding day, on the last day) in the
calendar month that is 12 months thereafter; provided that any Interest Period
scheduled to end after the Maturity Date shall end on the Maturity Date;
provided
further
that, with respect to any Interest Period commencing within the one month period
immediately preceding the Maturity Date, such Interest Period shall have the
duration selected by Lender in its sole discretion; provided further, that, with respect to any Interest Period commencing on or after the Maturity
Date, such Interest Period shall have a one month duration. 




     “Lender” means Vishay Intertechnology,
Inc. 

     “LIBOR” means with respect to any Interest Period, the rate as determined by
Lender on the basis of the offered rates for deposits in Dollars for a period
coextensive with that Interest Period which appears on www.bba.org.uk (or, if no
longer available, such other industry standard website for determining LIBOR),
on the day that is two Business Days preceding the first day of that Interest
Period. 

     “Lien” means, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, hypothecation, encumbrance, charge or security interest in, on or
of such asset, (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset and (c) in the case of securities, any purchase option,
call or similar right of a third party with respect to such securities.


     “Loan” has the meaning set forth in
Section 2.1. 

     “Margin” means 4.0% per annum.


     “Material Agreements” means (a) the Indenture, (b) the Facility Agreement and (c)
the Note Purchase Agreement.

     “Maturity Date” means the earlier of (a) September 15, 2011 and (b) the date
on which the Loans shall become due and payable in accordance with the terms of
this Agreement, whether by acceleration or otherwise.

     “Note Purchase
Agreement” means that certain Note Purchase
Agreement dated as of May 1, 1998 between Parent and the Note Purchasers party
thereto from time to time, as amended, restated or otherwise modified prior to
the date hereof. 

     “Obligations” means any now existing or hereafter arising obligations of Borrower to
Lender, whether primary or secondary, direct or indirect, absolute or
contingent, joint or several, secured or unsecured, due or not, liquidated or
unliquidated, arising by operation of law or otherwise under any Credit Document
whether for principal, interest, fees, expenses or otherwise, together with all
costs of collection or enforcement, including, without limitation, reasonable
attorneys’ fees incurred in any collection efforts or in any action or
proceeding. 

     “Parent” means KEMET Corporation, a
Delaware corporation. 

     “Person” means any natural person, corporation, limited liability company,
limited partnership, trust, joint venture, association, company, partnership,
Governmental Authority or other entity. 

     “Pledged Account” means each US Pledged Account and each Foreign Receivable of
the Borrower from time to time pledged to Lender. 

     “Security Agreement” means the Pledge and Security Agreement, dated as of the
date hereof, executed by Borrower in favor of Lender. 




     “Subsidiary” means, as to any Person, a corporation, partnership, limited liability
company or other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to elect a
majority of the board of directors or other managers of such corporation,
partnership or other entity are at the time owned, or the management of which is
otherwise controlled, directly or indirectly through one or more intermediaries,
or both, by such Person. Unless otherwise qualified, all references to a
“Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary
or Subsidiaries of Borrower. 

     “Transactions” means the execution, delivery, and performance by Borrower
of the Credit Documents, the borrowing and repayment of the Loans, the pledge,
assignments or grant of the security interests in the Collateral pursuant to the
Credit Documents, the payment of interest and fees thereunder and the use of the
proceeds of the Loans. 

     “UCC” means the Uniform Commercial Code as in effect from time to time in the
State of New York. 

     “US Pledged Account” means each
Domestic Receivable of the Borrower.

     Section
1.2. Terms Generally. The definitions of terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words “include,” “includes,” and “including” shall be deemed
to be followed by the phrase “without limitation.” The word “will” shall be
construed to have the same meaning and effect as the word “shall.” Unless the
context requires otherwise (a) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person’s successors and
assigns, (c) the words “herein,” “hereof,” and “hereunder,” and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, and Schedules shall be construed to refer to Articles and Sections of,
and Schedules to, this Agreement and (e) the words “asset” and “property” shall
be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and general intangibles.

     Section
1.3. Specified Times and Dates;
Determinations. All times specified in this
Agreement shall be determined, unless stated specifically herein to the
contrary, on the basis of the prevailing time in New York City. Unless stated
specifically herein to the contrary, if any day or date specified in this
Agreement for any notice, action or event is not a Business Day, then the due
date for such notice, action or event shall be extended to the immediately
succeeding Business Day; provided that interest shall accrue on
any payments due by Borrower which are extended by the operation of this Section
1.3. Any determination by Lender hereunder shall, in the absence of manifest
error, be conclusive and binding.

ARTICLE II: THE LOAN 

     Section
2.1. Term Loan. Subject to the terms and conditions and relying upon the
representations and warranties herein set forth, Lender hereby agrees to lend to
Borrower in a single draw on the Closing Date the total amount of the Commitment
(the “Loan”). Borrower shall repay the entire outstanding principal balance of the
Loan on the Maturity Date. Amounts repaid shall not be re-borrowed. 




     Section 2.2. Interest.

     (a) Loans. The Loan shall bear interest on
the unpaid principal amount thereof from the Closing Date until payment in full
thereof. Interest shall be payable (i) monthly, on the first Business Day of
each month, (ii) on the date of each prepayment (on the principal amount
prepaid), and (iii) on the Maturity Date.

     (b) Interest Rate. The interest rate for
the Loan shall be equal to LIBOR for such Interest Period plus the Margin.


     (c) Default Interest. After the occurrence
and during the continuance of an Event of Default, to the extent permitted by
applicable law, Borrower shall pay on demand, on the principal amount of the
outstanding Loans, the otherwise applicable interest rate plus 2% per annum.


     (d) Maximum Interest Rate. Notwithstanding
anything in any Credit Document to the contrary, in no event shall the interest
charged under any Credit Document exceed the maximum rate of interest permitted
under applicable law. Any payment made which if treated as interest would cause
the interest charged to exceed the maximum rate permitted shall instead be held
by Lender to the extent of such excess as additional Collateral hereunder and
applied to future interest payments as and when such amount becomes due and
payable hereunder. 

     (e) Calculations. Interest shall be
calculated on the basis of a year of 360 days for the actual days elapsed.
Interest is calculated based on LIBOR for the applicable Interest Period but
shall be payable on the first Business Day of each month. Each determination by
Lender of a rate of interest hereunder shall be conclusive and binding for all
purposes, absent manifest error. 

     Section
2.3. Optional Prepayment of
Loans. Borrower shall have the right on not
less than four Business Days prior written notice to Lender to prepay the Loan
at any time in whole or in part; provided that such any prepayment
shall be in a minimum amount of not less than the lesser of (i) $150,000 or (ii)
the aggregate amount outstanding with respect to the Obligations at such
time.

     Section
2.4. Payments. All payments by Borrower shall be payable on the due date thereof, in
immediately available funds in Dollars, without any setoff, counterclaim,
withholding or deduction of any kind. All payments shall be applied by Lender as
follows: first, to the payment of all accrued but unpaid fees, costs or expenses
under the Credit Documents; second, to the payment of all accrued but unpaid
interest under the Credit Documents; third, to the repayment of then outstanding
principal amount of the Loan; and fourth, the balance, if any, to Borrower.


     Section
2.5. Obligations Secured. The Obligations of Borrower under the Credit Documents shall
be secured as more fully described in the Security Agreement. 

     Section
2.6. Taxes.
(a) Any and all payments made by Borrower hereunder shall be made free and clear
of and without deduction for any present or future taxes, levies, imposts,
deductions, charges, or withholdings, and all liabilities with respect thereto
to the extent attributable to the Loans or the Collateral, excluding (i) taxes
imposed on net income and (ii) all income and franchise taxes of the United
States of America, any political subdivisions thereof, and any state of the
United States of America, and any political subdivisions thereof (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as “Taxes”). (b) If Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder, (i) the sum payable shall be increased as may be necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.6) Lender shall receive an amount
equal to the 




sum it would have received had no such
deductions been made, (ii) Borrower shall make such deductions and (iii)
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law. (c) Borrower shall pay and
hereby indemnifies Lender from any documentary stamp Taxes in connection with
the execution or delivery of any Credit Document. Within 30 days after the date
of any payment of Taxes, Borrower will furnish Lender with evidence of payment
thereof. Borrower hereby indemnifies Lender for the full amount of Taxes
(including, without limitation, any Taxes imposed by any jurisdiction on amounts
payable under this Section) paid by Lender and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes were correctly or legally asserted. Payment pursuant
to this indemnification obligation shall be made upon written demand therefor.
The obligations of Borrower under this Section 2.6 shall survive the termination
of this Agreement.

ARTICLE III: REPRESENTATIONS AND WARRANTIES 

     Borrower represents and warrants to
Lender on the date of the making of the Loan that: 

     Section
3.1. Organization and
Authorization. (a) Borrower is duly organized
or formed, validly existing and in good standing (if and to the extent
applicable) under the laws of the jurisdiction of its organization or formation,
has all requisite power and authority to carry on its business as now conducted
and (b) the Transactions are within the powers of Borrower and have been duly
authorized by all necessary action for Borrower. 

     Section
3.2. Enforceability. Each Credit Document to which it is a party has been duly executed and
delivered by Borrower and constitutes its legal, valid and binding obligation,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors’ rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law;

     Section
3.3. No Consents, No Conflicts. The Transactions (a) will not violate any applicable law or
regulation or the charter, by-laws, trust agreement or other organizational
documents of any Borrower or any order of any Governmental Authority binding on
any Borrower, (b) will not violate or result in a default under any indenture,
agreement or other instrument binding upon any Borrower, including, without
limitation, any Material Agreement, or any of its assets, or give rise to a
right thereunder to require any payment to be made by any Borrower, and (c) will
not result in the creation or imposition of any Lien on any asset of any
Borrower other than pursuant to the Credit Documents.

     Section
3.4. Domestic Receivables. As of the date hereof, neither Parent nor any Subsidiary of
Parent (other than Borrower, Arcotronics and FEC) generates Domestic
Receivables. 

     Section 3.5. No Default. No Default has
occurred and is continuing. 

     Section
3.6. Investment Company Status. Borrower is not an “investment company” as defined in, or
subject to regulation under, the Investment Company Act of 1940. 

     Section
3.7. Security Interests; Certain
Information. Lender has a valid and perfected
first priority Lien on all of the Collateral and all filings and other actions
necessary for the perfection and first priority status of such Liens have been
duly made or taken and remain in full force and effect. 

     Section
3.8. Indebtedness Agreements. As of the Closing Date, Borrower is not party to any
agreements for borrowed money in an aggregate principal amount in excess of
$5,000,000 other than the Material Agreements.




     Section
3.9. Disclosures. All material information provided in each Collateral Certificate and on
Schedule I to the Security Agreement is true, correct and complete in all
material respects and does not contain any material misstatement or omit to
state a material fact. 

ARTICLE IV: CONDITIONS 

     Section
4.1. Closing Date. The obligations of Lender to make the Loan to Borrower hereunder shall
not become effective until each of the following conditions is satisfied:


     (a) Lender shall have received the following
documents: 

          (i) a counterpart of this
Agreement executed by Borrower;

          (ii) the Security Agreement
executed by Borrower; and

     (iii) a certificate of a responsible officer of Borrower certifying as to (A)
its Governing Documents as in existence on the Closing Date, (B) the resolution
of Borrower’s board of directors approving and authorizing the execution,
delivery and performance of this Agreement and the Credit Documents, and (C) the
names and true signatures of each officer of Borrower that has been authorized
to execute any document required hereunder. 

     (b) Lender shall have received a duly
executed Collateral Certificate. 

     (c) Lender shall have received Lien searches against Borrower indicating that
there are no Liens against the Collateral. 

     (d) Lender shall have received an opinion of counsel to Borrower in form and
substance reasonably satisfactory to Lender addressing such matters as Lender
shall reasonably request (including a “no conflict” opinion in form to be
agreed). 

     (e) The representations and warranties set forth in Article III hereof and in
any documents delivered herewith, shall be true and correct as of the date of
the making of the Loan, except to the extent they expressly refer to an earlier
date, in which case they shall have been true and correct as of such earlier
date. 

     (f) Lender shall be satisfied that all necessary consents and approvals with
respect to the Transactions shall have been obtained and shall be satisfactory
to Lender. 

ARTICLE V: COVENANTS 

     Until the
principal of and interest on the Loan and all fees and other Obligations (other
than unasserted contingent indemnification obligations, including those arising
under Section 2.6) payable by Borrower under the Credit Documents shall have
been paid in full, Borrower covenants and agrees with Lender that: 

     Section
5.1. Collateral Certificate. On the fourth Business Day of each month, Borrower shall
deliver to Lender a duly executed Collateral Certificate. 

     Section
5.2. Notices. Borrower will furnish to Lender prompt written notice of the occurrence
of any Default. Each notice delivered under this Section shall be accompanied by
a statement of Borrower setting forth the details of the
event or development requiring such notice and any action taken or proposed to
be taken with respect thereto. 




     Section
5.3. Books and Records. Borrower will keep proper books of record and account in
which full, true and correct entries, in all material respects, are made of all
dealings and transactions in relation to the Collateral.

     Section
5.4. Existence. Borrower will do or cause to be done all things necessary to preserve,
renew and keep in full force and effect its legal existence and the rights,
licenses, permits, privileges and franchises material to the conduct of its
business.

     Section
5.5. Use of Proceeds. The proceeds of the Loan and the sale of the Business
pursuant to the Asset Purchase Agreement shall be used by Borrower to repay in
full any existing Indebtedness under the Note Purchase Agreement. No part of the
proceeds of the Loan will be used directly or indirectly for the purpose of
purchasing or carrying margin stock within the meaning of Regulations T, U, or X
of the Federal Reserve Board.

     Section
5.6. Liens.
Borrower shall not permit any Liens to exist on the Collateral except Liens
created pursuant to the Credit Documents. 

     Section
5.7. Domestic Receivables. If, at any time after the date hereof, any Domestic
Receivables are to be generated by Parent or any Subsidiary of Parent (other
than Borrower, Arcotronics and FEC), then Parent and Borrower shall make prior
arrangements with Lender to ensure that any and all such Domestic Receivables
are pledged to Lender on terms and conditions substantially similar to those in
the Security Agreement; provided that (a) Arcotronics shall
only generate Domestic Receivables in connection with its existing customers and
existing products in the film and electrolytic capacitors business consistent
with its past practices and (b) FEC shall only generate Domestic Receivables in
connection with its existing magnetics business. 

     Section
5.8. Foreign Receivables. Beginning no later than 90 days after the Closing Date,
Borrower shall pledge, or cause to be pledged, Foreign Receivables to Lender
pursuant to security documents reasonably acceptable to Lender (it being
understood that Borrower shall use its commercially reasonable best efforts to
provide Lender with such pledge on terms and conditions as similar to the terms
and conditions of the Security Agreement as possible under the circumstances)
having a value for GAAP purposes (net of any allowances for doubtful accounts)
at all times of not less than $13,000,000. For the avoidance of doubt, Foreign
Receivables pledged to Lender pursuant to this Section shall not be subject to
any Liens except Liens in favor of Lender. 

     Section
5.9. Further Assurances. Borrower shall upon request by Lender (a) promptly correct
any material defect or error that may be discovered in any Credit Document or in
the execution, acknowledgement or recordation thereof and (b) do, execute,
acknowledge, deliver, record, re-record, file, re-file, register and re-register
any and all such further acts, deeds, conveyances, security agreements, pledge
agreements, mortgages, deeds of trust, trust deeds, assignments, estoppel
certificates, financing statements and continuation thereof, termination
statements, notices of assignment, transfers, certificates, assurances and other
instruments as Lender may reasonably require from time to time in order to (i)
subject to the Liens and security interests created by any of the Credit
Documents any of Borrower’s properties, rights or interests covered or now or
hereafter intended to be covered by any of the Credit Documents, (ii) perfect
and maintain the validity, effectiveness and priority of any of the Credit
Documents and the Liens and security interests intended to be created thereby
and (iii) better assure, convey, grant, assign, transfer, preserve, protect and
confirm unto Lender the rights granted or now or hereafter intended to be
granted to Lender under any Credit Document. Lender shall upon request by Borrower promptly correct any material defect or error that
may be discovered in any Credit Document or in the execution, acknowledgement or
recordation thereof. 




     Section
5.10. No Information to Lender. At no time will Borrower be required to share
any information about Borrower or the Collateral with Lender other than as
expressly required in the Credit Documents, nor will Lender have any right to
request any such information from Borrower. In addition, Borrower shall not be
required to make any certifications to Lender or deliver to Lender any other
information or documents to the extent that Borrower reasonably believes that
making such certifications or the disclosure of such information or documents to
Lender is not consistent with, or is likely to violate, applicable competition
laws, provided, that if Lender reasonably determines that making such certifications or
the disclosure of such information or documents is necessary for Borrower to
comply with any Credit Document, Lender and Borrower shall engage a third-party
administrator to perform collateral monitoring services, and Borrower shall be
required to deliver such information to the administrator who shall not share
such information with Lender.

     Section
5.11. Post-Closing. Within 3 days from the Closing Date, Borrower (i) shall enter into, and
cause the Depositary Bank to enter into, the Control Agreement and (ii) shall
cause special legal counsel to Borrower to provide a legal opinion to Lender in
form and substance reasonably satisfactory to Lender as to the perfection of
Lender's security interest in the Collateral Account. 

ARTICLE VI: EVENTS OF DEFAULT


     Section 6.1. If any of the following
events (“Events of Default”) shall occur: 

     (a) Borrower shall fail to pay any principal of the Loan when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise; 

     (b) Borrower shall fail to pay any interest on the Loan, on any fee under any
of the Credit Documents, or on any other Obligation (other than the one referred
to in clause (a) above) and such non-payment shall continue for a period of five
(5) Business Days after the due date thereof; 

     (c) Borrower shall fail to pay any fee or any other amount (other than an
amount referred to in clause (a) or (b) of this Section 6.1) payable under any
Credit Document, when and as the same shall become due and payable, and such
failure shall continue unremedied for a period of thirty (30) days after the
receipt of written notice of the date on which the same shall become due and
payable (it being understood that invoices by Lender to Borrower shall
constitute such written notice); 

     (d) any representation or warranty made or deemed made by or on behalf of
Borrower in connection with any Credit Document or any amendment or modification
thereof, or in any report, certificate, financial statement or other document
furnished pursuant to or in connection with any Credit Document or any amendment
or modification hereof shall prove to have been incorrect in any material
respect when made or deemed made and shall continue to be incorrect for a period
of ten (10) Business Days thereafter; 

     (e) Borrower shall fail to observe or perform any covenant, condition or
agreement contained in Section 5.11 or Section 3(b)(i)(A) of the Security
Agreement; 

     (f) Borrower shall fail to observe or perform (i) any covenant, condition or
agreement contained in Section 5.1 or 5.7 or Sections (b)(i)(B) and 3(b)(ii) of
the Security Agreement and such failure shall continue unremedied for a period
of five (5) Business Days or (ii) any covenant, 




condition or agreement contained in
Sections 5.6 or 5.8 or Sections 3(c) or 3(d) of the Security Agreement and such
failure shall continue unremedied for a period of ten (10) Business Days or
(iii) any other covenant, condition or agreement contained in any Credit
Document and such failure shall continue unremedied for a period of thirty (30)
days after notice thereof from Lender to Borrower; 

     (g) an
involuntary proceeding shall be commenced or an involuntary petition (other than
by Lender) shall be filed seeking (i) liquidation, reorganization or other
relief in respect of Borrower or any Subsidiary or its debts, or of a
substantial part of their assets, under any federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect
or (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for Borrower or any Subsidiary or for a
substantial part of its assets, and, in any such case, such proceeding or
petition shall continue undismissed for forty-five (45) days or an order or
decree approving or ordering any of the foregoing shall be entered; 

     (h) Borrower or any Subsidiary shall (i) voluntarily commence any proceeding
or file any petition seeking liquidation, reorganization or other relief under
any federal, state or foreign bankruptcy, insolvency, receivership or similar
law now or hereafter in effect, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition described
in clause (g) of this Section 6.1, (iii) apply for or consent to the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for Borrower or any Subsidiary or for a substantial part of their assets, (iv)
file an answer admitting the material allegations of a petition filed against
them in any such proceeding, (v) make a general assignment for the benefit of
creditors or (vi) take any action for the purpose of effecting any of the
foregoing; or 

     (i) any material provision of any Credit Document shall, for any reason,
cease to be valid and binding on Borrower, or Borrower shall so state in
writing; or any Credit Document shall, for any reason, cease to create a valid
Lien on any of the Collateral purported to be covered thereby or any Lien
granted to Lender shall cease to be a perfected first priority Lien, or Borrower
shall so state in writing; 

then, and in every such event (other
than an event with respect to Borrower described in clause (g) or (h) of this
Section 6.1), and at any time thereafter during the continuance of such event,
Lender may by notice to Borrower declare the Loans then outstanding to be due
and payable in whole (or in part, in which case any principal not so declared to
be due and payable may thereafter be declared to be due and payable), and
thereupon the principal of the Loans so declared to be due and payable, together
with accrued interest thereon and all fees and other Obligations of Borrower
accrued hereunder, shall become due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by Borrower; and in case of any event with respect to Borrower
described in clause (g) or (h) of this Section 6.1, the principal of the Loans
then outstanding, together with accrued interest thereon and all fees and other
Obligations of Borrower accrued hereunder, shall automatically become due and
payable, without presentment, demand, protest or other notice of any kind, all
of which are hereby waived by Borrower. In addition, Lender may exercise any
remedies provided for by the Credit Documents in accordance with the terms
thereof or any other remedies provided by applicable law. 

ARTICLE VII: MISCELLANEOUS 

     Section
7.1. Notices. All notices and other communications provided for herein shall be in
writing and shall be delivered by hand or overnight courier service, mailed by
U.S. mail or sent by telecopy (with confirmed receipt or followed by overnight
delivery) to the addresses (or telecopy numbers) set forth on the signature
pages hereof. Any party hereto may change its address or telecopy number for
notices and other communications hereunder by notice to the other parties
hereto. All notices 




and other communications given to any
party hereto in accordance with the provisions of this Agreement shall be deemed
to have been given on the date of receipt or, if mailed, the fifth Business Day
following the date so mailed, if earlier. Telecopied notices shall be deemed to
have been given on the day of receipt if received on a Business Day before 11:00
am (New York time), and otherwise, on the succeeding Business Day.

     Section
7.2. Amendment and Waiver. No alteration, modification, amendment or waiver of any
terms and conditions of any of the Credit Documents shall be effective or
enforceable against Lender unless set forth in a writing signed by Lender.
Without limiting the generality of the foregoing, the making of each Loan shall
not be construed as a waiver of any Default, regardless of whether Lender may
have had notice or knowledge of such Default at the time. 

     Section
7.3. Non-Recourse Obligations. The Credit Documents shall be non-recourse to Borrower;
except that they will be full recourse to Borrower if any of the following
events occur: (a) the Borrower commits intentional fraud (including, without
limitation, any intentional action by Borrower or any Affiliate of Borrower
designed to circumvent the collateral support for this Loan in any material
respect) or makes an intentional material misrepresentation in any Credit
Document, including any Collateral Certificate; (b) the occurrence of any event
described in Section 6.1(g) or (h); (c) Borrower fails to comply with Section
5.11; or (d) the Obligations (other than unasserted contingent indemnification
obligations, including those arising under Section 2.6) are not paid in full on
or before September __, 2011; provided, however, that upon the occurrence of
such an event the Credit Documents will be full recourse only to the extent of
the deficiency created because of the Collateral’s failure to cover the
Obligations then due and owing. For the avoidance of doubt, if after exercise of
remedies against the Collateral there exists any deficiency in the amount owing
to Lender under the Credit Documents, such deficiency shall not be discharged
but shall be recoverable against Borrower on a fully recourse basis from and
after the date the Credit Documents become recourse against Borrower under this
Section 7.3. 

     Section
7.4. Expenses. Borrower and Lender hereby agree that each party shall pay its own
expenses in connection with entering into this Agreement (including legal
expenses), provided that Borrower shall not be responsible for any expenses in connection
with any legal opinion provided in connection with the pledge of Foreign
Receivables in Section 5.8. 

     Section
7.5. Successors and Assigns. The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, except that Borrower may not assign or otherwise transfer any of its
rights or Obligations hereunder without the prior written consent of Lender and
any attempted assignment or transfer by Borrower in contravention of the
foregoing shall be null and void and Lender may not assign or otherwise transfer
any of its rights or obligations hereunder other than an assignment or transfer
to a wholly-owned Subsidiary of Lender (it being understood that if an assignment
is made by Lender to a wholly-owned Subsidiary of Lender, and thereafter Lender
fails to own 100% of the equity interests of such Subsidiary, then such failure
shall constitute an assignment to Lender for purposes of this Section 7.5)
without the prior written consent of Borrower and any attempted assignment or
transfer by Lender in contravention of the foregoing shall be null and
void.

     Section
7.6. Survival. All covenants, agreements, representations and warranties made by
Borrower in any Credit Document and in the certificates or other instruments
delivered in connection with or pursuant to any Credit Document shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of each Credit Document and the making of the
Loans, regardless of any investigation made by any such other party or on its
behalf and notwithstanding that Lender may have had notice or knowledge of any
Default or incorrect representation or warranty at 










the time any credit is extended
hereunder, and shall continue in full force and effect as long as the principal
of or any accrued interest on the Loans or any fee or any other amount payable
under any Credit Document is outstanding and unpaid.

     Section
7.7. Severability. Any provision of any Credit Document held to be invalid, illegal or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity, illegality or unenforceability without
effecting the validity, legality and enforceability of the remaining provisions
thereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other
jurisdiction.

     Section 7.8. Governing Law; Jurisdiction; Consent to Service of
Process.

     (a) This Agreement shall be governed by and construed in accordance with the
laws of the State of New York. 

     (b) BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY FEDERAL OR
STATE COURT IN THE STATE OF NEW YORK IN ANY ACTION, SUIT OR PROCEEDING BROUGHT
AGAINST IT AND RELATED TO OR IN CONNECTION WITH THIS LOAN AGREEMENT OR ANY OF
THE TRANSACTIONS CONTEMPLATED HEREBY AND CONSENTS TO THE PLACING OF VENUE IN NEW
YORK COUNTY OR OTHER COUNTY PERMITTED BY LAW. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, BORROWER HEREBY WAIVES AND AGREES NOT TO ASSERT BY WAY OF
MOTION, AS A DEFENSE OR OTHERWISE, IN ANY SUCH SUIT, ACTION OR PROCEEDING ANY
CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS, THAT
THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE
VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER, OR THAT ANY CREDIT DOCUMENT
OR INSTRUMENT REFERRED TO HEREIN MAY NOT BE LITIGATED IN OR BY SUCH COURTS. TO
THE EXTENT PERMITTED BY APPLICABLE LAW, BORROWER AGREES NOT TO SEEK AND HEREBY
WAIVES THE RIGHT TO ANY REVIEW OF THE JUDGMENT OF ANY SUCH COURT BY ANY COURT OF
ANY OTHER NATION OR JURISDICTION WHICH MAY BE CALLED UPON TO GRANT AN
ENFORCEMENT OF SUCH JUDGMENT. EXCEPT AS PROHIBITED BY LAW, BORROWER HEREBY
WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH ANY CREDIT
DOCUMENT. 

     (c) Each party to this Agreement irrevocably consents to service of process
in the manner provided for notices in Section 7.1. Nothing in this Agreement
will affect the right of any party to this Agreement to serve process in any
other manner permitted by law. 

     Section
7.9. Headings. Article and Section headings used herein are for convenience of
reference only, are not part of this Agreement and shall not affect the
construction of, or be taken into consideration in interpreting, this Agreement.


     Section
7.10. Counterparts. This Agreement may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract. Delivery of an executed counterpart of a signature page of this
Agreement or of any other Credit Document by facsimile or electronic
transmission shall be effective as delivery of a manually executed counterpart
of this Agreement or of such other Credit Document. 




     Section
7.11. No Reliance. Borrower acknowledges that it is making its own independent decision to
enter into the transactions under the Credit Documents and has determined that
such transactions are appropriate and proper based upon its own judgment and
upon advice from such advisers as it has deemed necessary. Borrower acknowledges
that it is not relying on any communication (written or oral) from Lender as
investment or tax advice or as a recommendation to enter into such transactions
and specifically agrees and acknowledges that any information and explanation
relating to the terms and conditions of such transactions shall not be
considered investment or tax advice or a recommendation from Lender to enter
into such transactions. No communication (written or oral) from Lender regarding
such transactions shall be deemed to be an assurance or guarantee as to the
expected results, benefits, outcomes or characteristics (economic, tax or
otherwise) of such transactions. Borrower acknowledges that it is capable of
assessing the merits of and understands (on its own behalf or through
independent professional advice), and accepts, the terms, conditions and risks
of such transactions and that it is also capable of assuming and assumes the
risks of such transactions. Borrower acknowledges that Lender is not acting as a
fiduciary or an adviser to Borrower in respect of such transactions.

Remainder of Page Intentionally Left
Blank 




     IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written. 


	BORROWER:  
		  
	KEMET ELECTRONICS CORPORATION  
		  
	By  	/s/ Per-Olof Loof  
		Name: 
      Per-Olof Loof  
		Title:    CEO  
		 
	
      Notice
      Address:

      KEMET Electronics
      Corporation
c/o KEMET Corporation
R. James ("Jamie") Assaf
Vice
      President, General Counsel
Phone: 954-766-2817
Fax:
      954-766-2805
www.kemet.com| JamieAssaf@kemet.com
101 NE 3rd Ave.,
      Suite 1700, Fort Lauderdale,
FL 33301
USA










	LENDER: 
	   
	VISHAY INTERTECHNOLOGY, INC.  
	   
	By  	/s/ Steven
      Klausner 
		Name: 
      Steven Klausner  
	 	Title:    Vice President and Treasurer 
    
		 
	
      Notice
      Address: 

      Avner Z. Lahat
Director of Legal Services
Vishay Intertechnology,
      Inc.
63 Lancaster Avenue
Malvern, PA 19355-2143
Phone: (610)
      251-5286
eFax: (484) 631-0831