Document:

EXHIBIT 10.04

 

SEPARATION AGREEMENT

 

This Separation Agreement is entered into between Flextronics International USA, Inc., together with its parent company, Flextronics International Ltd., and any predecessor, successor, or affiliated companies (collectively, the “Company”) and Paul Read (“Read”). In consideration of the mutual promises set forth below, the Company and Read have agreed as follows:

 

1.                                      SEPARATION.

 

a.                                      Date of Separation.  Read’s employment relationship with the Company will end on July 5, 2013 (the “Separation Date”).

 

b.                                      Termination Prior to Separation Date.  While employed with the Company, Read will not engage in misconduct and will comply with Company policy, the provisions of this Separation Agreement, and the provisions of any other written agreements between Read and the Company. If Read violates Company policy, the provisions of this Separation Agreement, or the provisions of any other written agreement with the Company, the Company may terminate Read’s employment immediately provided the Company shall afford Read a period of five (5) business days after providing Read written notice detailing a violation to cure such violation.  In the event that Read’s employment is terminated pursuant to Section 1(b), or based on Read’s resignation of his position prior to the Separation Date, Read would then only be entitled to compensation for accrued and/or vested compensation and benefits up to the date of termination and would not be entitled to the severance compensation, bonus, and lump sum in lieu of Company paid COBRA coverage as set forth in Section 2 of this Separation Agreement.

 

c.                                       Compensation Upon Rejection of Agreement or Early Separation.  In accordance with its standard practices, whether or not Read agrees to this Separation Agreement, on the earlier of either the actual date of the termination of his employment with the Company or the Separation Date, the Company will issue a payment to Read in a gross amount, less applicable taxes and withholdings, to compensate him for any accrued and vested compensation and/or accrued but unused PTO to which he is entitled as of that date.

 

d.                                      Within thirty (30) days following the Separation Date, Read will submit his final documented expense reimbursement statement reflecting all unreimbursed business expenses incurred through the Separation Date, if any, for which he seeks reimbursement.  The Company will reimburse his properly documented expenses pursuant to the Company’s policy and regular business practice.

 

2.                                      SEVERANCE. Provided Read complies with his obligations under this Separation Agreement and remains employed with the Company through the Separation Date, and diligently continues to carry out transition duties as may be requested by the Company, the Company will:

 

	
 
    	
 
    	
INITIALS:
    	
PR
    

 

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a.                                      On July 5, 2013, issue a payment to Read in a gross amount equal to $465,000.00 (Four Hundred and Sixty-Five Thousand Dollars) minus applicable taxes and withholdings (the “First Severance Payment”);

 

b.                                      On or about January 5, 2014, issue a payment to Read in the gross amount of $232,500.00 (Two Hundred and Thirty Two Thousand Five Hundred Dollars) minus applicable taxes and withholdings (the “Second Severance Payment”);

 

c.                                       On or about July 5, 2014, issue a payment to Read in a gross amount equal to $232,500 (Two Hundred and Thirty Two Thousand Dollars Five Hundred) minus applicable taxes and withholdings (the “Third Severance Payment”);

 

d.                                      Read will be paid the quarterly bonus minus applicable taxes and withholdings for the FY2013Q4 (January-March 2013) and the Year End payout of Fiscal Year 2013 based on the actual results of the Flextronics Corporate Standard Plan.

 

1.              FY2013Q4 Bonus to be paid in the second calendar quarter of 2013 but not later than June 15, 2013, Year End payout of Fiscal Year 2013 to be paid in the second calendar quarter of 2013 but not later than June 15, 2013. Amount to be confirmed once actual results are known.

 

Read will also receive a bonus for FY2014Q1 (April-June 2013), FY2014Q2 (July-Sept 2013), FY2014Q3 (October — December 2013), FY2014Q4 (January to March 2014) and FY2015Q1 (April-June 2014). These quarterly bonus payments shall be calculated at 100% of Read’s current bonus target.

 

All bonus payments shall be made at the same time as when such payments are regularly made pursuant to Flextronics policy and practice as follows:

 

1.              FY2014Q1 Bonus in the amount of $193,750 to be paid in the third calendar quarter of 2013,

 

2.              FY2014Q2 Bonus in the amount of $193,750 to be paid in the fourth calendar quarter of 2013,

 

3.              FY2014Q3 Bonus in the amount of $193,750 to be paid in the first calendar quarter of 2014,

 

4.              FY2014Q4  Bonus in the amount of $193,750 to be paid in the second calendar quarter of 2014, but not later than June 15, 2014; and

 

5.              FY2015Q1 Bonus in the amount of $193,750 to be paid in the third calendar quarter of 2014.

 

e.                                       On the Separation Date, issue a payment to Read in the gross amount of $74,000 (Seventy Four Thousand dollars) minus applicable taxes and withholdings, in lieu of

 

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18 months of premiums for continuation of Company provided medical, dental and vision benefits for Read and his eligible dependents under the Consolidated Omnibus Budget Reconciliation Act of 1986, as amended (“COBRA”).

 

IT SHALL BE READ’S RESPONSIBILITY TO SIGN UP FOR AND MAKE APPROPRIATE PAYMENTS TO ENSURE COBRA COVERAGE.  FAILURE TO SIGN UP FOR AND MAKE PAYMENTS FOR COBRA COVERAGE COULD RESULT IN LOSS OF HEALTH BENEFITS FOR READ AND HIS FAMILY AS WELL AS DIFFICULTY IN OBTAINING FUTURE COVERAGE.

 

Nothing in this Separation Agreement is intended to extend the length or scope of Read’s COBRA rights beyond those provided by statute.  Read will be provided with a separate notice of his COBRA rights and obligations.  Read will be responsible for any and all tax liability, if any, for any COBRA payments made by the Company or health benefit received by Read pursuant to this Separation Agreement.

 

f.                                        On the Separation Date, issue a payment to Read in the gross amount of $30,000 (thirty thousand dollars) minus applicable taxes and withholdings to reimburse Read for continued assistance with tax issues by PwC or a similar accountant of Read’s choosing.

 

Read acknowledges and agrees that the foregoing Severance set forth in Section 2 of the Separation Agreement is more than Read is otherwise legally entitled to receive and constitutes good and valuable consideration.

 

Each severance payment and each bonus payment shall, for purposes of Section 409A, be deemed a separate payment under this Separation Agreement.  Notwithstanding any other provision in this Separation Agreement, no payments shall be paid after the end of the second year following the year of the Separation from Service Date.

 

In the event that any of the payments and taxable benefits due within the six month period following the Separation from Service Date are determined to constitute deferred compensation subject to Section 409A and to the extent that such deferred compensation is subject to the “six-month delay” required by Section 409A(a)(2)(B)(i), as determined in good faith by the Company, any such payments otherwise due within such six month period shall, notwithstanding such other specified payment date, be delayed such that the payments are paid in a lump sum immediately following the end of such six month period (or the date of Read’s death if earlier), and any payments due after the six month period shall be paid as set forth in this Separation Agreement.

 

3.                                      EQUITY COMPENSATION.  Read has been granted share bonus awards as provided in the applicable option grant forms issued to Read during his employment with the Company.  The plans governing such options and awards control and are incorporated herein by reference.  Read’s share bonus awards that will be vested as of the Separation Date are listed on Exhibit A, which is attached hereto and incorporated herein by reference.  Read acknowledges that he is not entitled to any additional grants of stock options or share bonus awards other than those set forth in Exhibit A.

 

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Read acknowledges and agrees that by their terms, the options will no longer be exercisable after the last date to exercise as indicated in Exhibit A.  Read further acknowledges and agrees that upon release of the share bonus awards as provided in this Section 5, unless Flextronics withholds payroll taxes, Read will be responsible for payroll taxes, which will be due and payable to Flextronics by Read within three (3) business days of the vesting occurrence.

 

Read understands and agrees Read will not receive any grants of stock, restricted stock, stock units, stock options, or other forms of equity from the Company in the future unless mutually agreed to by the parties and that any current stock, restricted stock, stock units, stock options, or other forms of equity will expire or be exercisable in accordance with the terms and provisions of the applicable agreement(s) and plan(s).

 

4.                                      DEFERRED COMPENSATION.  Read is a participant in the Company’s Amended and Restated Senior Management Deferred Compensation Plan and the Senior Executive Deferred Compensation Plan in return for services to be performed in the future and subject to the terms and conditions outlined in Letter Agreements dated as of December 31, 2008 and June 30, 2005 by and between Read and the Company.  Company contributions in the Deferred Compensation plans were credited to a brokerage account, and have been invested in various funds based on Read’ elections.  As of May 1, 2013, 33.3% of Read’s Senior Management Deferred Compensation account was vested and 70% of Read’s Senior Executive Deferred Compensation Plan was vested.  As of July 5, 2013, a further 33.3% of Read’s Senior Management Deferred Compensation account will be vested for a total of 66.6%.  Distribution of the vested funds will be made six months after the Separation from Service Date, as set forth in the Plan documents, which are controlling. Further, an amount equal to 100% of the remaining 30% unvested balance in the Senior Executive Deferred Compensation plan will vest on July 1, 2013 and be paid to Read in accordance with selected distribution elections.  Distribution of these funds will be made six months after the Separation from Service Date, as set forth in the Plan documents, which are controlling and will only be made if Read has complied with his obligations as outlined in the Plan and in this Agreement.

 

Read acknowledges that he is not a participant in any other deferred compensation plan with the Company and that he is not entitled to any additional deferred compensation other than as stated in this Agreement.

 

5.                                      COMPLETE RELEASE. In consideration for and expressly conditioned on the receipt of payment of the Severance Payment, Read hereby releases the Company, together with the employees, partners, agents, directors, officers, contractors, insurers and attorneys of any of them, (the “Releasees”) from any and all claims or demands, whether known or unknown, and whether asserted on an individual or class basis, which Read has, may have, or may claim to have against any of them. This complete release of all claims includes but is not limited to a complete release of any claims (including claims for attorneys’ fees) Read has, may have, or may claim to have based on Read’s employment with Company or separation from that employment, as well as any claims arising out of any contract, express or implied, any covenant of good faith and fair dealing, express or implied, any tort (including negligence by the Company or anyone else), and any federal, state or other governmental statute, regulation or ordinance relating to employment, employment discrimination, or the payment of wages or benefits including, but not limited to, those relating to qui tam, employment discrimination, termination of employment, payment of wages or provision of benefits, housing costs,

 

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costs relating to relocation and the purchase or sale of housing, Title VII of the Civil Rights Act of 1964 as amended, the Civil Rights Act of 1991, the Americans with Disabilities Act, the Employee Retirement Income Security Act, the Family and Medical Leave Act, the Fair Labor Standards Act, the Age Discrimination in Employment Act, the Older Workers Benefit Protection Act (“OWBPA”), the Worker Adjustment and Retraining Notification Act, the Consolidated Omnibus Budget Reconciliation Act, and the Occupational Safety and Health Act and/or their state law or local law equivalents.  Read specifically waives any entitlement to any bonus, equity plan or other compensation not specifically set forth in this Separation Agreement. Read represents that he has not assigned to any other person any of such claims and that Read has the full right to grant this release. Notwithstanding any other provision herein, Read is not waiving any claims that may arise under the Age Discrimination in Employment Act after this Separation Agreement is executed or any future claims based on the provisions set forth in this Separation Agreement.  This Separation Agreement shall not modify, expand or reduce any obligation of the Company to indemnify Read from any claims arising out of the performance of Read’s services as an employee or officer of the Company as provided by applicable law and in accordance with the Company’s by-laws. Nothing herein is intended to expand, reduce or limit the Company’s obligations to provide the benefit of insurance coverage maintained by the Company (including D&O coverage) for Read in connection with claims based on actions or omissions of Read during the period of Read’s employment with the Company.  Excluded from this release are a) any claims arising under the terms of this Agreement; and b) any claims that may not be waived by law.

 

6.                                      CALIFORNIA RELEASE. Read acknowledges that he has read Section 1542 of the Civil Code of the State of California, which states in full:

 

A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.

 

Despite the language of Section 1542, Read waives any rights Read has or may have under Section 1542 (or any similar provision of the laws of any other jurisdiction) to the full extent Read may lawfully waive such rights pertaining to this general release of claims and affirms that Read is releasing all known and unknown claims that he has or may have against the Releasees.

 

7.                                      INSTITUTING ARBITRATION OR SUIT. Read agrees not to institute any arbitration proceeding or lawsuit based on any claim stated to be released by Read in this Separation Agreement. If Read or anyone on Read’s behalf institutes any arbitration proceeding or lawsuit based on any claim stated to be released by Read in this Separation Agreement, Read will: (a) immediately take any and all actions necessary to effectuate the immediate dismissal of the lawsuit or arbitration proceeding; and (b) pay Company and the other Releasees for any and all reasonable attorney’s fees and costs incurred as a result of or in connection with the lawsuit or arbitration proceeding.

 

8.                                      WARRANTIES. Apart from payments due hereunder, Read warrants and agrees that the Company has paid Read all wages, forms of compensation, and other monies due to Read as of the date of execution of this Agreement. Read further warrants and agrees that all forms of compensation, wages, and other monies paid to Read by the Company through the date of Read’s execution of this Agreement have been accurately calculated, have represented the proper amounts due to Read, and

 

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have been based on the Company’s merit-based compensation system. If Read or someone on Read’s behalf claims any entitlement to further compensation from the Company for any reason, Read agrees that the Company is entitled to full offset of the amounts paid to Read under this Agreement.

 

9.                                      NON-DISPARAGEMENT AND THIRD PARTY ASSISTANCE. In consideration for and expressly conditioned on the receipt of payment of the Severance Payment, Read agrees that Read will not, directly or indirectly, in any individual or representative capacity, make any statement, oral or written, or perform any act or omission which is detrimental in any material respect to the reputation or goodwill of the Company.  The Company agrees that it will instruct its executives and directors and Read’s managers not to directly or indirectly, in any individual or representative capacity, make any statement, oral or written, or perform any act or omission which is detrimental in any material respect to the reputation or goodwill of Read.  Read agrees that Read will not voluntarily counsel, assist, participate in, or encourage any persons in the presentation or prosecution of any disputes, differences, grievances, claims, charges, or complaints by any third party against the Company without first providing written notice to the Company’s General Counsel at Flextronics, 6201 America Centre Drive, San Jose, California, 95002. Read and the Company agree that Read’s compliance with a subpoena or other legally compulsive process, disclosure required pursuant to the Company’s Code of Business Conduct and Ethics, or participation as a witness in a lawsuit shall not violate the terms of this paragraph but further agree Read will nevertheless provide the Company’s General Counsel written notice of such subpoena, other legally compulsive process, disclosure pursuant to the Company’s Code of Business Conduct and Ethics, or potential participation as a witness promptly after receiving notice of same.

 

10.                               COOPERATION. Read will make himself reasonably available to the Company in connection with any claim, lawsuit, or proceeding that relates to Read’s conduct or duties at the Company or that are based on facts about which Read obtained personal knowledge while employed at the Company.  In return, the Company agrees to reimburse Read for direct and reasonable out of pocket expenses incurred in connection with cooperation provided by Read pursuant to this Section.

 

11.                               RETURN OF PROPERTY. Read agrees that, prior to the Separation Date, Read will return to the Company any and all documents relating to the Company or its business operations (and any and all copies thereof, whether in paper form or electronic form), computer equipment, badges, credit cards, and any other Company property in Read’s possession, care, custody, or control. Read represents and agrees that Read will not take any such documents or property from the control or premises of Company. If Read should come into possession of any Company documents or property at any time in the future, Read agrees to return such documents or property to the Company immediately.  Notwithstanding the above, Read may retain his laptop computer upon following this procedure:  Read will remove his personal information from the laptop, the Company will copy and retain the remaining Company related information from the laptop and then delete all Company information from the laptop and return the clean laptop to Read for his personal use.

 

12.                               NO FUTURE RIGHT TO ACCESS. Read agrees that as of the earlier of the date of termination of his employment or the Separation Date Read has no right of access to any Company site or personnel, whether as a contractor, assigned worker, partner representative, client representative, or in any other capacity, and Read represents Read has no interest in such access. Read agrees Company may decide any request by or on behalf of Read for access to any Company site or personnel in its sole and absolute discretion and may consider Read’s representation in this

 

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paragraph that he has no interest in access, and any other consideration not prohibited by law in making that decision.

 

13.                               CONFIDENTIALITY. Read and the Company represent they have  not disclosed the existence of, the terms of, or any other information regarding this Separation Agreement to anyone other than their attorneys or tax advisors, or to Read’s immediate family members. The Parties agree that they will not disclose the existence of, the terms of, or any other information regarding this Separation Agreement to anyone other than, their attorneys and tax advisors and Read’s immediate family members, provided the parties agree that their respective attorneys, tax advisors and immediate family members (as applicable) first agree to be bound by the foregoing confidentiality obligation prior to any such disclosure. The Parties also agree that the Company may make disclosures, without violating the obligations of this Separation Agreement, to the extent such disclosures are required by law, rule or regulations. Nothing in this provision is intended to prevent the Parties from complying with a subpoena or other compulsory legal process, responding truthfully to any inquiry by a government agency, or providing truthful testimony in a court of law or other formal legal proceeding.

 

14.                               NON-DISCLOSURE.

 

a.                                      Read acknowledges and agrees the Company has provided Read with valuable confidential information relating to the Company’s business, technology, plans, customers, potential customers, relationships, and personnel. Read acknowledges and agrees that he will remain bound by the confidentiality obligations set forth below (the “Confidentiality Agreement”). Read agrees that any original works of authorship, products, software, or applications that Read created or developed while employed by the Company is the sole property of the Company. Read further acknowledges and agrees that Read shall not disclose or use for any purpose any Confidential Information. Confidential Information shall mean any and all proprietary or confidential information of the Company or any of its vendors, customers, or partners, including without limitation the following: (i) any and all technical information, including, without limitation, product data and specifications, know-how, formulae, source code, or other software information, test results, processes, inventions, research projects or product development; (ii) any and all business information, including, without limitation, cost information, profits, profit margins, sales information, costs, overhead, accounting and unpublished financial information, business plans, markets, marketing methods, vendor or customer lists, including without limitation, a vendor’s or customer’s specific needs, advertising and operating strategies; and (iii) any and all employee information, including, without limitation, salaries, and specific strengths, weaknesses and skills of Company employees.

 

15.                               If Read is subject to any subpoena or other form of legally compulsive process seeking to require Read to disclose any information protected by this Separation Agreement, any other written agreement between Read and the Company, any statute, or the common law, Read will immediately provide written notice of same to the Company’s General Counsel at Flextronics, 6201 America Centre Drive, San Jose, California, 95002.

 

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16.                               NON-SOLICITATION.

 

a.                                      Read recognizes the highly competitive nature of the business of the Company and acknowledges that Read has been exposed to confidential information regarding the Company’s employees. Read agrees the relationship between the Company and each of its employees constitutes a valuable asset of the Company and that information related to employees’ skills and compensation is kept confidential and may not be disclosed or used by Read or any third party for any reason whatsoever. In consideration for and expressly conditioned on the receipt of payment of the Severance Payments, for a period of one (1) year commencing on the date of termination of Read’s employment with the Company (the “Standstill Period”), Read will not, either directly or indirectly, recruit, solicit, or assist others in recruiting, attempt to recruit, any person who is an employee of the Company, or induce or attempt to induce any such employee to terminate his or her employment with the Company.

 

b.                                      Read acknowledges that the Standstill Period and the scope and period of restrictions are fair and reasonable and are reasonably required for the protection of Flextronics. Read and the Company intend that the provisions of this Section shall be enforced to the fullest extent permissible under applicable law. If any particular provision or portion of this Section shall be held to be invalid or unenforceable, this Separation Agreement shall be deemed amended to revise those provisions or portions to the minimum extent necessary to render them enforceable. Such amendment shall apply only with respect to the operation of this Section for purposes of the law under which such holding was made.

 

c.                                       Read acknowledges that any breach of the covenants of this Section will result in immediate and irreparable injury to the Company. Accordingly, Read consents to the application for injunctive relief and such other equitable remedies for the benefit of Flextronics as may be appropriate in the event such a breach occurs or is threatened. The foregoing remedies shall be in addition to all other remedies to which the Company may be entitled hereunder, including, without limitation, monetary damages.

 

17.                               BINDING AGREEMENT. This Agreement will be binding upon Read and Company and their respective heirs, administrators, trustees, representatives, executors, successors, and assigns.

 

18.                               REVIEW. Read understands that Read has twenty-one (21) days in which to review and consider this Agreement before signing it. Read understands Read may use as much or as little of this 21-day period as Read wishes. Read is encouraged to consult an attorney before signing this Agreement. Read agrees that any changes Read and the Company agree to make to this Agreement, whether material or not, do not restart or extend this 21-day review period. If Read does not accept this Agreement within the 21-day review period, this offer will expire. By executing this Agreement, Read acknowledges Read was afforded a period of at least 21 days in which to review and consider this Agreement.

 

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19.                               REVOCATION. If Read decides to accept and sign this Separation Agreement, Read will have seven (7) days from the date of execution in which to revoke his acceptance. Read understands any such revocation will not be effective unless Read delivers a written notice of such revocation to Flextronics, c/o General Counsel, 6201 America Centre Drive, San Jose, California, 95002, prior to the expiration of seven days after Read executes this Agreement. Read understands this Agreement will not become effective or enforceable until the seven days have elapsed without Read having revoked Read’s acceptance of this Separation Agreement.

 

20.                               ENTIRETY. This is the entire agreement between the Read and the Company regarding Read’s separation from the Company and the other matters addressed herein and supersedes all prior agreements between them regarding same, other than those agreements referenced herein. In executing this Separation Agreement, Read is not relying on any representations or promises not explicitly contained in this Separation Agreement.

 

21.                               ARBITRATION. Read and Company agree that any and all disputes between them, including but not limited to any disputes arising out of or relating to this Agreement, the claims purported to be released by Read in this Agreement, Read’s employment with Company, or the termination of any such employment shall be settled by binding arbitration in San Jose, California administered by the American Arbitration Association under its National Rules for the Resolution of Employment Disputes, and that judgment upon the award rendered by the arbitrator(s) may be entered in any court with jurisdiction. Notwithstanding any of the foregoing, any other provision of this Agreement, or any provision of any other agreement:

 

a.                                      A court of competent jurisdiction shall have the power to maintain the status quo pending the arbitration of any dispute, and neither this Section nor any other agreement shall require the arbitration of an application for emergency or temporary injunctive relief by either party pending arbitration; provided, however, that the remainder of any such dispute beyond the resolution of any application for emergency or application for temporary injunctive relief, if such applications are made, shall be subject to arbitration; and

 

b.                                      This Section shall not require the arbitration of: (i) claims by Read for workers’ compensation or unemployment insurance (an exclusive government-created remedy exists for these claims); or (ii) claims which could not have been litigated in court or before any administrative proceeding under applicable federal, state, or local law (e.g., claims barred by limitations).

 

22.                               CHOICE OF LAW, VENUE, MODIFICATION, AND EXECUTION. This Separation Agreement will be construed in accordance with and governed by the laws of the State of California. Read  and Company agree that the exclusive venue for resolving any dispute not submitted to arbitration for any reason shall be the state and federal courts located in San Jose, California, unless a different venue is required by applicable law. Read understands that once this Agreement is executed, only Mike McNamara, Chief Executive Officer, will have the authority to modify this Agreement on behalf of the Company, and that Mr. McNamara will have such authority only when acting in writing. In this connection, the parties agree this Agreement will not be modified or amended except by a written instrument(s), signed by both parties, with Mr. McNamara signing for the Company. This Agreement may be executed in multiple counterparts.

 

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23.          NON-ADMISSION OF LIABILITY. By entering into this Agreement, neither party admits they have done anything wrong.

 

	
ACCEPTED AND AGREED:
    	
Flextronics International USA, Inc.
    
	
 
    	
 
    
	
 
    	
/s/   Michael McNamara
    
	
 
    	
Michael   McNamara,
    
	
 
    	
Chief   Executive Officer
    
	
 
    	
 
    
	
 
    	
6/4/13
    
	
 
    	
Date
    

 

 

I ACKNOWLEDGE THAT I HAVE CAREFULLY READ THE FOREGOING AGREEMENT, THAT I UNDERSTAND ALL OF ITS TERMS, THAT I UNDERSTAND THAT IT CONTAINS A COMPLETE RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS, AND THAT I AM ENTERING INTO IT VOLUNTARILY.

 

	
 
    	
/s/   Paul Read
    
	
 
    	
Paul Read
    
	
 
    	
 
    
	
 
    	
June 6, 2013
    
	
 
    	
Date
    

 

10

 

Exhibit A

Closing Statement

 

	
Paul Read
    	
 
    	
Closing Statement as of:
    	
7/5/2013
    
	
512771
    	
 
    	
Estimated Stock Price:
    	
$7.15
    

 

Options

 

	
Grant ID
    	
 
    	
Grant Date
    	
 
    	
Plan
    	
 
    	
Type
    	
 
    	
Price
    	
 
    	
Granted
    	
 
    	
Exercised
    	
 
    	
Exercisable
    	
 
    	
Cancelled
    	
 
    	
Value
    	
 
    	
Expiration
    	
 
    
	
021593
    	
 
    	
7/1/2003
    	
 
    	
2002
    	
 
    	
NQ
    	
 
    	
$
    	
10.34
    	
 
    	
20,000
    	
 
    	
0
    	
 
    	
20,000
    	
 
    	
0
    	
 
    	
$
    	
0
    	
 
    	
10/5/2013
    	
 
    
	
017872
    	
 
    	
1/9/2004
    	
 
    	
2002
    	
 
    	
NQ
    	
 
    	
$
    	
16.57
    	
 
    	
80,000
    	
 
    	
0
    	
 
    	
80,000
    	
 
    	
0
    	
 
    	
$
    	
0
    	
 
    	
10/5/2013
    	
 
    
	
023638
    	
 
    	
9/28/2004
    	
 
    	
2001
    	
 
    	
NQ
    	
 
    	
$
    	
13.18
    	
 
    	
50,000
    	
 
    	
0
    	
 
    	
50,000
    	
 
    	
0
    	
 
    	
$
    	
0
    	
 
    	
10/5/2013
    	
 
    
	
024607
    	
 
    	
10/29/2004
    	
 
    	
2001
    	
 
    	
NQ
    	
 
    	
$
    	
12.05
    	
 
    	
125,000
    	
 
    	
0
    	
 
    	
125,000
    	
 
    	
0
    	
 
    	
$
    	
0
    	
 
    	
10/5/2013
    	
 
    
	
32104
    	
 
    	
6/2/2008
    	
 
    	
2001
    	
 
    	
NQ
    	
 
    	
$
    	
10.59
    	
 
    	
700,000
    	
 
    	
0
    	
 
    	
700,000
    	
 
    	
0
    	
 
    	
$
    	
0
    	
 
    	
10/5/2013
    	
 
    
	
M32105
    	
 
    	
6/2/2008
    	
 
    	
2001
    	
 
    	
NQ
    	
 
    	
$
    	
10.59
    	
 
    	
700,000
    	
 
    	
0
    	
 
    	
700,000
    	
 
    	
0
    	
 
    	
$
    	
0
    	
 
    	
10/5/2013
    	
 
    
	
33023
    	
 
    	
12/5/2008
    	
 
    	
2001
    	
 
    	
NQ
    	
 
    	
$
    	
2.26
    	
 
    	
2,000,000
    	
 
    	
1,200,000
    	
 
    	
800,000
    	
 
    	
0
    	
 
    	
$
    	
4,072,000
    	
 
    	
10/5/2013
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
TOTALS:
    	
 
    	
3,675,000
    	
 
    	
1,200,000
    	
 
    	
2,475,000
    	
 
    	
0
    	
 
    	
$
    	
4,072,000
    	
 
    	
 
    	
 
    

 

Restricted Stock

 

	
Grant ID
    	
 
    	
Grant Date
    	
 
    	
Plan
    	
 
    	
Type
    	
 
    	
Price
    	
 
    	
Granted
    	
 
    	
Vested
    	
 
    	
Will Vest
    	
 
    	
Cancelled
    	
 
    	
Value
    	
 
    
	
33213
    	
 
    	
6/15/2010
    	
 
    	
2001
    	
 
    	
RSU
    	
 
    	
$
    	
0.00
    	
 
    	
137,500
    	
 
    	
0
    	
 
    	
68,750
    	
 
    	
68,750
    	
 
    	
$
    	
505,313
    	
 
    
	
2011PR
    	
 
    	
6/3/2011
    	
 
    	
2010
    	
 
    	
RSU
    	
 
    	
$
    	
0.00
    	
 
    	
162,500
    	
 
    	
16,250
    	
 
    	
32,500
    	
 
    	
113,750
    	
 
    	
$
    	
238,875
    	
 
    
	
RS0517120002
    	
 
    	
5/17/2012
    	
 
    	
2010
    	
 
    	
RSU
    	
 
    	
$
    	
0.00
    	
 
    	
162,000
    	
 
    	
40,500
    	
 
    	
0
    	
 
    	
121,500
    	
 
    	
$
    	
0
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
TOTALS:
    	
 
    	
 
    	
 
    	
462,000
    	
 
    	
56,750
    	
 
    	
101,250
    	
 
    	
304,000
    	
 
    	
$
    	
744,188
    	
 
    

 

Market and Performance Awards

 

	
Grant ID
    	
 
    	
Grant Date
    	
 
    	
Plan
    	
 
    	
Type
    	
 
    	
Price
    	
 
    	
Granted
    	
 
    	
Vested
    	
 
    	
Eligible to Vest
    	
 
    	
Likely to
   Vest
    	
 
    	
Cancelled
    	
 
    	
Value
    	
 
    
	
M2010PR
    	
 
    	
6/15/2010
    	
 
    	
2001
    	
 
    	
RSU
    	
 
    	
$
    	
0.00
    	
 
    	
137,500
    	
 
    	
0
    	
 
    	
68,750
    	
 
    	
0
    	
 
    	
137,500
    	
 
    	
$
    	
0
    	
 
    
	
M2011PR
    	
 
    	
6/3/2011
    	
 
    	
2010
    	
 
    	
RSU
    	
 
    	
$
    	
0.00
    	
 
    	
162,500
    	
 
    	
0
    	
 
    	
0
    	
 
    	
0
    	
 
    	
162,500
    	
 
    	
$
    	
0
    	
 
    
	
MRS051712002
    	
 
    	
5/17/2012
    	
 
    	
2010
    	
 
    	
RSU
    	
 
    	
$
    	
0.00
    	
 
    	
162,000
    	
 
    	
0
    	
 
    	
0
    	
 
    	
0
    	
 
    	
162,000
    	
 
    	
$
    	
0
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
TOTALS:
    	
 
    	
 
    	
 
    	
462,000
    	
 
    	
0
    	
 
    	
68,750
    	
 
    	
0
    	
 
    	
462,000
    	
 
    	
$
    	
0
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
TOTAL INTRINSIC VALUE:
    	
 
    	
$
    	
4,816,188
    	
 
    

 

11Exhibit 10.1

 

CONSOLIDATED AMENDMENT TO LOAN AND SECURITY AGREEMENT

 

THIS CONSOLIDATED AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”) is made as of July 8, 2013 by and among KEMET ELECTRONICS CORPORATION, a Delaware corporation (“KEC”), KEMET FOIL MANUFACTURING, LLC, a Delaware limited liability company (“KEMET Foil”), KEMET BLUE POWDER CORPORATION, a Nevada corporation (“KEMET Blue” and, together with KEC and KEMET Foil, collectively, “U.S. Borrowers”), KEMET ELECTRONICS MARKETING (S) PTE LTD., a Singapore corporation (“Singapore Borrower” and, together with U.S. Borrowers, each individually, a “Borrower” and, collectively, “Borrowers”), the financial institutions party hereto as lenders (collectively, “Lenders”) and BANK OF AMERICA, N.A., a national banking association, as agent for the Lenders (“Agent”).

 

W I T N E S S E T H:

 

WHEREAS, Borrowers, Lenders and Agent have entered into a Loan and Security Agreement, dated as of September 30, 2010 (as amended, restated, renewed, extended, substituted, modified and otherwise supplemented from time to time, the “Loan Agreement”), and certain other Loan Documents (as defined in the Loan Agreement);

 

WHEREAS, Borrowers have entered into certain amendments since the effective date of the Loan Agreement and, for ease of reference, Borrowers, Lenders and Agent desire to consolidate all amendments to the Loan Agreement in the same document;

 

NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:

 

SECTION 1.   DEFINITIONS.

 

Capitalized terms used and not defined in this Amendment shall have the respective meanings given them in the Loan Agreement.

 

“OEM Transactions” means the transactions between Parent and an original equipment manufacturer (“OEM”), pursuant to one or more of the OEM Transaction Agreements.

 

“OEM Transaction Agreements” means the advance payment agreement, statement of work and master purchase agreement, each of which was executed on August 28, 2012, the forms of which were provided to Agent and Lenders, receipt of which is hereby acknowledged, and which are further described in Parent’s Report on Form 10-K filed with the Securities and Exchange Commission on  September 4, 2012.

 

“Prepayment” means a certain prepayment made by OEM to Parent, the proceeds of which were used by Parent to acquire the Subject CapEx.

 

“Repayment” means any repayment by Parent of the Prepayment in accordance with the terms of the OEM Transaction Agreements.

 

“Subject CapEx” means the fixed assets purchased by Parent from the proceeds of the Prepayment.

 

 

SECTION 2.   ACKNOWLEDGMENTS.

 

2.1                               Acknowledgment of Obligations.  Each Borrower hereby acknowledges, confirms and agrees that as of July 8, 2013, U.S. Borrower jointly and severally are indebted to Agent and Lenders in respect of Revolver Loans in the principal amount of $0 and in respect of LC Obligations in the amounts of $16,000,000.00 and EUR 1,105,254.95, and Singapore Borrower is indebted to Agent and Lenders in respect of the Revolver Loans in the principal amount of $0.  All such amounts, together with interest accrued and accruing thereon, and fees, costs, expenses and other charges now or hereafter payable by each Borrower to Agent and Lenders, are unconditionally owing by such Borrower to Agent and Lenders in accordance with the terms of the Loan Documents, without offset, defense or counterclaim of any kind, nature or description whatsoever.

 

2.2                               Acknowledgment of Security Interests.  Each Borrower hereby acknowledges, confirms and agrees that Agent, for the benefit of Secured Parties, has and shall continue to have valid, enforceable and perfected first priority Liens, subject to Permitted Liens, upon and security interests in the Collateral of such Borrower heretofore granted to Agent, for the benefit of Secured Parties, pursuant to the Loan Documents or otherwise granted to or held by Agent, for the benefit of Secured Parties, and upon and in which Agent, for the benefit of Secured Parties, presently has perfected first priority Liens and security interests.

 

2.3                               Binding Effect of Documents.  Each Borrower hereby acknowledges, confirms and agrees that: (a) each of the Loan Documents to which it is a party has been duly executed and delivered, and each is in full force and effect as of the date hereof, (b) the agreements and obligations of such Borrower contained in the Loan Documents and in this Amendment constitute the legal, valid and binding obligations of such Borrower, enforceable against it in accordance with their respective terms, and such Borrower has no valid defense to the enforcement of such obligations, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the rights of creditors generally and to the effect of general principles of equity whether applied by a court of law or equity, and (c) Agent and Lenders are and shall be entitled to the rights, remedies and benefits provided for in the Loan Documents and applicable law.

 

2.4                               Acknowledgment of Guarantor.  Parent hereby makes the acknowledgments, confirmations and agreements (i) set forth in Section 2.2 hereof with respect to the security interests granted by Parent pursuant to the Loan Documents to which it is party, and (ii) set forth in Section 2.3 hereof with respect to the Loan Documents to which it is party, including without limitation, the Guaranty to which it is party.

 

SECTION 3.   AMENDMENTS.

 

3.1                               The definition of “Equipment Formula Amount” set forth in Section 1.1 of the Loan Agreement has been amended and restated in its entirety as follows:

 

“Equipment Formula Amount: the lesser of (a) $6,000,000 and (b) 80% of the NOLV Percentage of the Value of Eligible Equipment.”

 

3.2                               The definition of “Letter of Credit Subline” set forth in Section 1.1 of the Loan Agreement has been amended and restated in its entirety as follows:

 

“Letter of Credit Subline: $20,000,000.”

 

2

 

3.3                               All references to the terms “Borrower” and “Borrowers” in the Loan Agreement and the other Loan Documents have been amended to mean, individually and collectively, jointly and severally, KEC, Singapore Borrower, KEMET Foil, and KEMET Blue.

 

3.4                               All references to the term “U.S. Borrower” in the Loan Agreement and the other Loan Documents have been amended to mean, individually and collectively, jointly and severally, KEC, KEMET Foil and KEMET Blue.

 

3.5                               Schedules 8.5, 8.6.1, 9.1.4, 9.1.11, 9.1.14, 9.1.15, 9.1.16, 9.1.18, 9.1.20, 10.2.2, 10.2.6, 10.2.8, 10.2.9 and 10.2.17 have been replaced with updated Schedules which have been provided to Agent and Lenders in connection with previous amendments to the Loan Agreement.

 

3.6                               Section 1.1 of the Loan Agreement has been amended by inserting the following new definitions in the appropriate alphabetical order:

 

“Banker’s Acceptance: a time draft or bill of exchange or other deferred payment obligation relating to a documentary Letter of Credit which has been accepted by U.S. Issuing Bank for the benefit of U.S. Borrower.”

 

“Spot Rate: the exchange rate, as determined by Agent, that is applicable to conversion of one currency into another currency, which is (a) the exchange rate reported by Bloomberg (or other commercially available source designated by Agent) as of the end of the preceding business day in the financial market for the first currency; or (b) if such report is unavailable for any reason, the spot rate for the purchase of the first currency with the second currency as in effect during the preceding business day in Agent’s principal foreign exchange trading office for the first currency.”

 

3.7                               The definition of “LC Conditions” in Section 1.1 of the Loan Agreement has been amended in its entirety to read as follows:

 

“LC Conditions: the following conditions necessary for issuance of a Letter of Credit: (a) each of the conditions set forth in Section 6; (b) after giving effect to such issuance, total LC Obligations do not exceed the Letter of Credit Subline, no Overadvance exists and, if no Revolver Loans are outstanding, the U.S. LC Obligations do not exceed the U.S. Borrowing Base (without giving effect to the LC Reserve for purposes of this calculation) and the Singapore LC Obligations do not exceed the Singapore Borrowing Base (without giving effect to the LC Reserve for purposes of this calculation); (c) the expiration date of such Letter of Credit is (i) no more than three hundred sixty-five (365) days from issuance, in the case of standby Letters of Credit (subject to automatic renewals), (ii) no more than three hundred (300) days from issuance, in the case of documentary Letters of Credit, and (iii) at least twenty (20) Business Days prior to the Revolver Termination Date; (d) the Letter of Credit and payments thereunder are denominated in Dollars or such other currency as is acceptable to Agent and Issuing Bank in their sole discretion; and (e) the purpose and form of the proposed Letter of Credit is reasonably satisfactory to Agent and Issuing Bank.”

 

3.8                               The definition of “U.S. Letter of Credit” Section 1.1 of the Loan Agreement has been amended in its entirety to read as follows:

 

“U.S. Letter of Credit: any standby or documentary letter of credit issued by U.S. Issuing Bank for the account of U.S. Borrower, any Bankers Acceptance, or any indemnity, guarantee, exposure transmittal memorandum or similar form of credit support issued by Agent or U.S. Issuing Bank for the benefit of U.S. Borrower.”

 

3

 

3.9                               Section 1.4 of the Loan Agreement has been amended by deleting the words “issuances of Letters of Credit” from the seventh sentence of such Section.

 

3.10                        Section 1 of the Loan Agreement has been amended by inserting at the end of such Section the following new Section 1.5:

 

1.5.                            Currency Equivalents.

 

1.5.1.                  Calculations. All references in the Loan Documents to Loans, Letters of Credit, Obligations, Borrowing Base components and other amounts shall be denominated in Dollars, unless expressly provided otherwise. The Dollar equivalent of any amounts denominated or reported under a Loan Document in a currency other than Dollars shall be determined by Agent on a daily basis, based on the current Spot Rate. Borrowers shall report Value and other Borrowing Base components to Agent in the currency invoiced by Borrowers or shown in Borrowers’ financial records, and unless expressly provided otherwise, shall deliver financial statements and calculate financial covenants in Dollars. Notwithstanding anything herein to the contrary, if any Obligation is funded and expressly denominated in a currency other than Dollars, Borrowers shall repay such Obligation in such other currency.

 

1.5.2.                  Judgments. If, for purposes of obtaining judgment in any court, it is necessary to convert a sum from the currency provided under a Loan Document (“Agreement Currency”) into another currency, the Spot Rate shall be used as the rate of exchange. Notwithstanding any judgment in a currency (“Judgment Currency”) other than the Agreement Currency, a Borrower shall discharge its obligation in respect of any sum due under a Loan Document only if, on the Business Day following receipt by Agent of payment in the Judgment Currency, Agent can use the amount paid to purchase the sum originally due in the Agreement Currency. If the purchased amount is less than the sum originally due, such Borrower agrees, as a separate obligation and notwithstanding any such judgment, to indemnify Agent and Lenders against such loss. If the purchased amount is greater than the sum originally due, Agent shall return the excess amount to such Borrower (or to the Person legally entitled thereto).

 

SECTION 4.   CAPITAL EXPENDITURES AND FIXED CHARGES IN RESPECT OF THE OEM TRANSACTIONS.

 

4.1                               Notwithstanding anything to the contrary contained in the Loan Agreement or any of the other Loan Documents, the following amounts shall not be included in calculating Capital Expenditures permitted under Section 10.2.3 of the Loan Agreement, including, without limitation, in calculating the Fixed Charge Coverage Ratio for the purposes thereof: (i) payments made in respect of the Subject CapEx; and (ii) an additional amount of Capital Expenditures, not to exceed $8,000,000, made by Borrowers solely in connection with the OEM Transactions.

 

4.2                               Notwithstanding anything to the contrary contained in the Loan Agreement or any of the other Loan Documents, to the extent that any Repayment amounts constitute principal payments on Borrowed Money, such Repayment amounts shall not be included in calculating the Fixed Charges or the Fixed Charge Coverage Ratio.

 

SECTION 5.   REPRESENTATIONS, WARRANTIES AND COVENANTS.

 

Each Borrower and Parent hereby represents, warrants and covenants with and to Agent and Lenders as follows:

 

4

 

5.1                               Representations in Loan Documents.  Each of the representations and warranties made by or on behalf of such Borrower to Agent and Lenders in any of the Loan Documents was true and correct in all material respects when made (except for those representations and warranties that were already qualified by concepts of materiality or by express thresholds, which representations and warranties shall be true and correct in all respects) and is true and correct in all material respects on and as of the date of this Amendment with the same full force and effect as if each of such representations and warranties had been made by or on behalf of such Borrower on the date hereof and in this Amendment (other than such representations and warranties that relate solely to a specific prior date).

 

5.2                               Binding Effect of Documents.  This Amendment and the other Loan Documents have been duly executed and delivered to the Lender by such Borrower and are in full force and effect, as modified hereby.

 

5.3                               No Conflict, Etc.  The execution, delivery and performance of this Amendment by such Borrower will not violate or cause a default under any Applicable Law (including, without limitation, federal and state securities laws) or Material Contract of such Borrower and will not result in, or require, the creation or imposition of any Lien on any of its properties or revenues, other than Permitted Liens.

 

5.4                               No Default or Event of Default.  No Default or Event of Default (including, without limitation, an Event of Default arising under Section 11.1(f) of the Loan Agreement in respect of any breach or default under any Convertible Notes Document or Senior Notes Document) exists immediately prior to the execution of this Amendment and no Default or Event of Default (including, without limitation, an Event of Default arising under Section 11.1(f) of the Loan Agreement in respect of any breach or default under any Convertible Notes Document or Senior Notes Document) will exist immediately after the execution of this Amendment and the other documents, instruments and agreements executed and delivered in connection herewith.

 

5.5                               Additional Covenants.  In addition to the covenants set forth in the Loan Agreement and the other Loan Documents, Parent hereby agrees that such Obligor shall not agree to, nor permit any Person to agree to, any amendment of any OEM Transaction Agreement that is adverse to Agent or to any Lender, as determined by Agent in its sole discretion, without the prior written consent of Agent.

 

5.6                               Additional Events of Default.  Any misrepresentation by any Borrower or Parent, or any failure of any Borrower or Parent to comply with the covenants, conditions and agreements contained in any Loan Document, herein or in any other document, instrument or agreement at any time executed and/or delivered by any Borrower or Parent with, to or in favor of Agent and/or Lenders shall, subject to the terms and provisions of the Loan Agreement and the other Loan Documents, constitute an Event of Default hereunder, under the Loan Agreement and the other Loan Documents.

 

SECTION 6.   PROVISIONS OF GENERAL APPLICATION.

 

6.1                               Effect of this Amendment.  Except as modified pursuant hereto, and pursuant to the other documents, instruments and agreements executed and delivered in connection herewith, no other changes or modifications to the Loan Documents are intended or implied and in all other respects the Loan Documents are hereby specifically ratified, restated and confirmed by all parties hereto as of the effective date hereof. In no event is this Amendment intended to negate, limit or modify the waivers and consents set forth in any amendments to the Loan Documents executed

 

5

 

prior to the date hereof.  To the extent of conflict between the terms of this Amendment and the other Loan Documents, the terms of the other Loan Documents shall control. Any Loan Document amended hereby shall be read and construed with this Amendment as one agreement.

 

6.2                               Costs and Expenses.  Borrowers absolutely and unconditionally agree to pay to Agent, on demand by Agent at any time and as often as the occasion therefor may require, whether or not all or any of the transactions contemplated by this Amendment are consummated: all reasonable fees and disbursements of any counsel to Agent in connection with the preparation, negotiation, execution, or delivery of this Amendment and any agreements delivered in connection with the transactions contemplated hereby and all reasonable out-of-pocket expenses which shall at any time be incurred or sustained by Agent or its directors, officers, employees or agents as a consequence of or in any way in connection with the preparation, negotiation, execution, or delivery of this Amendment and any agreements prepared, negotiated, executed or delivered in connection with the transactions contemplated hereby.

 

6.3                               No Third Party Beneficiaries.  The terms and provisions of this Amendment shall be for the benefit of the parties hereto and their respective successors and assigns; no other person, firm, entity or corporation shall have any right, benefit or interest under this Amendment.

 

6.4                               Further Assurances.  The parties hereto shall execute and deliver such additional documents and take such additional action as may be reasonably necessary or desirable to effectuate the provisions and purposes of this Amendment.

 

6.5                               Binding Effect.  This Amendment shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns.

 

6.6                               Merger.  This Amendment sets forth the entire agreement and understanding of the parties with respect to the matters set forth herein. This Amendment cannot be changed, modified, amended or terminated except in a writing executed by the party to be charged.

 

6.7                               Survival of Representations and Warranties.  All representations and warranties made in this Amendment or any other document furnished in connection with this Amendment shall survive the execution and delivery of this Amendment and the other documents, and no investigation by Agent or any closing shall affect the representations and warranties or the right of Agent to rely upon them.

 

6.8                               Severability.  Any provision of this Amendment held by a court of competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this Amendment.

 

6.9                               Reviewed by Attorneys.  Each Borrower represents and warrants to Agent and Lenders that it (a) understands fully the terms of this Amendment and the consequences of the execution and delivery of this Amendment, (b) has been afforded an opportunity to have this Amendment reviewed by, and to discuss this Amendment and each document executed in connection herewith with, such attorneys and other persons as such Borrower may wish, and (c) has entered into this Amendment and executed and delivered all documents in connection herewith of its own free will and accord and without threat, duress or other coercion of any kind by any Person. The parties hereto acknowledge and agree that neither this Amendment nor the other documents executed pursuant hereto shall be construed more favorably in favor of one than the other based upon which party drafted the same, it being acknowledged that all parties hereto

 

6

 

contributed substantially to the negotiation and preparation of this Amendment and the other documents executed pursuant hereto or in connection herewith.

 

6.10                        Governing Law; Consent to Jurisdiction and Venue.

 

(a)                                 THIS AMENDMENT, UNLESS OTHERWISE SPECIFIED, SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES (BUT GIVING EFFECT TO FEDERAL LAWS RELATING TO NATIONAL BANKS).

 

(b)                                 EACH BORROWER HEREBY CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF ANY FEDERAL OR STATE COURT SITTING IN OR WITH JURISDICTION OVER THE STATE OF NEW YORK, IN ANY PROCEEDING OR DISPUTE RELATING IN ANY WAY HERETO, AND AGREES THAT ANY SUCH PROCEEDING SHALL BE BROUGHT BY IT SOLELY IN ANY SUCH COURT. EACH BORROWER IRREVOCABLY WAIVES ALL CLAIMS, OBJECTIONS AND DEFENSES THAT IT MAY HAVE REGARDING SUCH COURT’S PERSONAL OR SUBJECT MATTER JURISDICTION, VENUE OR INCONVENIENT FORUM. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 14.3.1 OF THE LOAN AGREEMENT. Nothing herein shall limit the right of Agent or any Lender to bring proceedings against any Obligor in any other court, nor limit the right of any party to serve process in any other manner permitted by Applicable Law. Nothing in this Amendment shall be deemed to preclude enforcement by Agent of any judgment or order obtained in any forum or jurisdiction.

 

6.11                        Waivers.  TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH BORROWER WAIVES (A) THE RIGHT TO TRIAL BY JURY (WHICH AGENT AND EACH LENDER HEREBY ALSO WAIVES) IN ANY PROCEEDING OR DISPUTE OF ANY KIND RELATING IN ANY WAY HERETO; (B) PRESENTMENT, DEMAND, PROTEST, NOTICE OF PRESENTMENT, DEFAULT, NON-PAYMENT, MATURITY, RELEASE, COMPROMISE, SETTLEMENT, EXTENSION OR RENEWAL OF ANY COMMERCIAL PAPER, ACCOUNTS, DOCUMENTS, INSTRUMENTS, CHATTEL PAPER AND GUARANTIES AT ANY TIME HELD BY AGENT ON WHICH A BORROWER MAY IN ANY WAY BE LIABLE, AND HEREBY RATIFIES ANYTHING AGENT MAY DO IN THIS REGARD; (C) NOTICE PRIOR TO TAKING POSSESSION OR CONTROL OF ANY COLLATERAL; (D) ANY BOND OR SECURITY THAT MIGHT BE REQUIRED BY A COURT PRIOR TO ALLOWING AGENT TO EXERCISE ANY RIGHTS OR REMEDIES; (E) THE BENEFIT OF ALL VALUATION, APPRAISEMENT AND EXEMPTION LAWS; (F) ANY CLAIM AGAINST AGENT OR ANY LENDER, ON ANY THEORY OF LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES (AS OPPOSED TO DIRECT OR ACTUAL DAMAGES) IN ANY WAY RELATING TO ANY ENFORCEMENT ACTION, OBLIGATIONS, LOAN DOCUMENTS OR TRANSACTIONS RELATING THERETO; AND (G) NOTICE OF ACCEPTANCE HEREOF. Each Borrower acknowledges that the foregoing waivers are a material inducement to Agent and Lenders entering into this Amendment and that Agent and Lenders are relying upon the foregoing in their dealings with Borrowers. Each Borrower has reviewed the foregoing waivers with its legal counsel and has knowingly and voluntarily waived its jury trial and other rights following consultation with legal

 

7

 

counsel. In the event of litigation, this Amendment may be filed as a written consent to a trial by the court.

 

6.12                        Counterparts.  This Amendment may be executed in one or more counterparts, each of which shall constitute but one and the same Amendment. In making proof of this Amendment, it shall not be necessary to produce or account for more than one counterpart thereof signed by each of the parties hereto. Delivery of an executed counterpart of this Amendment electronically or by facsimile shall be effective as delivery of an original executed counterpart of this Amendment.

 

[Signature page follows]

 

8

 

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

 

 

	
 
    	
KEMET ELECTRONICS CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ MICHAEL W. BOONE
    
	
 
    	
 
    	
 
    
	
 
    	
Name: Michael W. Boone
    
	
 
    	
 
    
	
 
    	
Title: Vice President and   Treasurer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
KEMET ELECTRONICS MARKETING (S) PTE LTD.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ ZHU YING_
    
	
 
    	
 
    	
 
    
	
 
    	
Name: Zhu Ying
    
	
 
    	
 
    
	
 
    	
Title: Financial Controller /   Director
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
KEMET FOIL MANUFACTURING, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ STEVEN R. LANE
    
	
 
    	
 
    	
 
    
	
 
    	
Name: Steven R. Lane
    
	
 
    	
 
    
	
 
    	
Title: Senior Director / Manager
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
KEMET BLUE POWDER CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ CHARLES C. MEEKS, JR.
    
	
 
    	
 
    	
 
    
	
 
    	
Name: Charles C. Meeks, Jr.
    
	
 
    	
 
    
	
 
    	
Title: President
    

 

 

	
 
    	
ACKNOWLEDGED AND AGREED
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
KEMET CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ MICHAEL W. BOONE
    
	
 
    	
 
    	
 
    
	
 
    	
Name: Michael W. Boone
    
	
 
    	
 
    
	
 
    	
Title: Vice President and   Treasurer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
BANK OF AMERICA, N.A.,
    
	
 
    	
as Agent and sole Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ ANDREW A. DOHERTY
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
Andrew A. Doherty
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
Senior Vice President

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