Document:

EXHIBIT 10.1

 

AMENDMENT
NO. 2

TO

EMPLOYMENT/SEPARATION AGREEMENT

 

This Amendment (“Amendment”)
is entered into effective as of April 16, 2010, by and between Cornell
Companies, Inc. (the “Company”) and John R. Nieser (“Employee”), to amend
the Employment/Separation Agreement originally entered into on March 15,
2005, by and between the Company and Employee (as amended by Amendment to
Employment Separation Agreement dated March 14, 2007, the “Agreement”).

 

WHEREAS, the Company and
Employee previously entered into the Agreement; and

 

WHEREAS, the Board of
Directors of the Company has authorized this Amendment to clarify certain
provisions of the Agreement;

 

NOW, THEREFORE, the
parties hereto agree to this Amendment as follows:

 

1.                                       Section 1 of the Agreement is hereby
amended and restated in its entirety to read as follows:

 

“1.                                                    Employment and Term. 
The Company agrees to continue the employment of the Employee and the
Employee agrees to remain in the employ of the Company, in accordance with the
terms and provisions of this Agreement. The Employee’s employment term shall be
a rolling one year term, the current term of which shall expire on March 14,
2011 (the “Current Term”).  Upon
completion of the Current Term, this Agreement shall renew automatically from
year to year, unless and until terminated as provided in Section 7 of this
Agreement (the Current Term and all subsequent automatic renewals thereof, the “Employment
Period”).”

 

2.                                       Section 8(e) of the Agreement
is hereby amended and restated in its entirety to read as follows:

 

“(e)                                               Termination by Company without Cause. If the Employee’s employment shall be
terminated during the Employment Period by the Company without Cause pursuant
toSection 7(e), in lieu of the obligations of the Company hereunder, all
Employee’s rights and benefits provided for by this Agreement will terminate as
of such date; provided, however, that Employee will be paid, to the extent he
has not already been paid, Employee’s pro rata Annual Base Salary and pro rata
Annual Bonus as 

 

 

earned through the date
of termination. Employee shall also be entitled to one time his then-current
Annual Base Salary. This payment will be made within one month of the date of
termination and will be subject to all applicable tax withholdings. Employee will
also be entitled to extended health care benefits (COBRA) at Employee’s expense
and to the extent Employee is qualified for such benefits as provided by law.”

 

3.                                       Unless otherwise defined herein, the
capitalized terms used herein shall have the meanings given to them in the
Agreement.

 

4.                                       Except as amended hereby, the Agreement
shall be and remain in full force and effect.

 

IN WITNESS WHEREOF, the
parties have signed this Amendment, to be effective as of the date first set
forth above.

 

 

	
   

  	
  Cornell Companies, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James E. Hyman

  
	
   

  	
  Name: James E. Hyman

  
	
   

  	
  Title: President and
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ John R. Nieser

  
	
   

  	
  John R. Nieser

  

 

2Exhibit 10.1

 

EXECUTION VERSION

 

KEMET Corporation

 

$230,000,000 101⁄2 Senior Notes due 2018

PURCHASE AGREEMENT

dated April 21, 2010

 

Banc of America Securities LLC

 

KeyBanc Capital Markets Inc.

 

UBS Securities LLC

 

 

PURCHASE AGREEMENT

 

April 21, 2010

 

BANC OF AMERICA SECURITIES LLC

As Representative of the Initial Purchasers

c/o Banc of America Securities LLC

One Bryant Park

New York, New York  10036

 

Ladies and Gentlemen:

 

Introductory.  KEMET
Corporation, a Delaware corporation (the “Company”),
proposes to issue and sell to the several Initial Purchasers named in Schedule
A (the “Initial Purchasers”), acting severally
and not jointly, the respective amounts set forth in such Schedule A of
$230,000,000 aggregate principal amount of the Company’s 101⁄2 Senior Notes due
2018 (the “Notes”).  Banc of America Securities LLC has agreed to
act as the representative of the several Initial Purchasers (the “Representative”) in connection with the offering and sale of
the Securities (as defined below).

 

The Securities will be issued pursuant to an
indenture (the “Indenture”) to be dated as of the
Closing Date (as defined below) among the Company, the Guarantors (as defined
below) and Wilmington Trust Company, as trustee (the “Trustee”).  The Notes will be issued only in book-entry
form in the name of Cede & Co., as nominee of The Depository Trust
Company (the “Depositary”) pursuant to a letter
of representations, to be dated on or before the Closing Date (the “DTC Agreement”).

 

The holders of the Notes will be entitled to the
benefits of a registration rights agreement, to be dated as of May 5, 2010
(the “Registration Rights Agreement”), among
the Company, the Guarantors and the Initial Purchasers, pursuant to which the
Company and the Guarantors may be required to file with the Commission (as defined
below), under the circumstances set forth therein, (i) a registration
statement under the Securities Act (as defined below) relating to another
series of debt securities of the Company with terms substantially identical to
the Notes (the “Exchange Notes”) to be offered in
exchange for the Notes (the “Exchange Offer”)
and (ii) a shelf registration statement pursuant to Rule 415 of the
Securities Act relating to the resale by certain holders of the Notes, and in
each case, to use its commercially reasonable efforts to cause such
registration statements to be declared effective.  All references herein to the Exchange Notes
and the Exchange Offer are applicable only if the Company and the Guarantors
are in fact required to consummate the Exchange Offer pursuant to the terms of
the Registration Rights Agreement.

 

The payment of principal of, premium, if any, and
interest on the Notes will be fully and unconditionally guaranteed on a senior
secured basis, jointly and severally by (i) the entities listed on the
signature pages hereof as “Guarantors” (collectively, the “Guarantors”) and (ii) any subsidiary of the Company
formed or acquired after the Closing Date that executes an additional guarantee
in accordance with the terms of the Indenture, and their respective successors
and assigns, pursuant to their guarantees (such guarantees by the Guarantors,
the “Guarantees”).  The Notes and the Guarantees attached thereto
are herein collectively referred to as the “Securities”;
and the Exchange Notes and the Guarantees attached thereto are herein
collectively referred to as the “Exchange Securities.”

 

 

For purposes of this Purchase Agreement (this “Agreement”), a “Business Day”
means any day other than a Saturday or Sunday or other day on which banking
institutions in New York City are authorized or required by law to close.

 

The Securities will be secured on a first-priority
basis, subject to certain Permitted Collateral Liens (to be defined in the
Indenture), by a lien on the capital stock (or equivalent) of certain
subsidiaries of the Company and/or the Guarantors as described in the Pricing
Disclosure Package and set forth in the Security Documents (as defined below)
(the “Collateral”) and documented by one or
more pledge agreements (the “Pledge Agreements”),
and other instruments evidencing or creating a security interest (collectively,
the “Security Documents”) in favor of
Wilmington Trust Company, as collateral agent (in such capacity, the “Collateral Agent”), for its benefit and the benefit of the
Trustee and the holders of the Securities.

 

The Company understands that the Initial Purchasers
propose to make an offering of the Securities on the terms and in the manner
set forth herein and in the Pricing Disclosure Package (as defined below) and
agrees that the Initial Purchasers may resell, subject to the conditions set
forth herein, all or a portion of the Securities to purchasers (the “Subsequent Purchasers”) on the terms set forth in the Pricing
Disclosure Package (the first time when sales of the Securities are made, being
4:00 p.m. New York City time on April 21, 2010, is referred to as the
“Time of Sale”).  The Securities are to be offered and sold to
or through the Initial Purchasers without being registered with the Securities
and Exchange Commission (the “Commission”)
under the Securities Act of 1933 (as amended, the “Securities
Act,” which term, as used herein, includes the rules and
regulations of the Commission promulgated thereunder), in reliance upon
exemptions therefrom.  Pursuant to the
terms of the Securities and the Indenture, investors who acquire Securities
shall be deemed to have agreed that Securities may be resold or otherwise transferred,
after the date hereof, only if such Securities are registered for sale under
the Securities Act or if an exemption from the registration requirements of the
Securities Act is available (including the exemptions afforded by Rule 144A
under the Securities Act (“Rule 144A”)
or Regulation S under the Securities Act (“Regulation S”)).

 

The Company has prepared and delivered to each
Initial Purchaser copies of a Preliminary Offering Memorandum, dated April 20,
2010 (the “Preliminary Offering Memorandum”),
and has prepared and delivered to the Initial Purchasers copies of a Pricing
Supplement, dated April 21, 2010 (the “Pricing
Supplement”), describing the terms of the Securities, each for use
by such Initial Purchaser in connection with its solicitation of offers to
purchase the Securities.  The Preliminary
Offering Memorandum and the Pricing Supplement are herein referred to as the “Pricing Disclosure Package.” 
Promptly after this Agreement is executed and delivered, the Company
will prepare and deliver to each Initial Purchaser a final offering memorandum
dated the date hereof (the “Final Offering Memorandum”).

 

All references herein to the terms “Pricing Disclosure Package” and “Final
Offering Memorandum” shall be deemed to mean and include all
information filed under the Securities Exchange Act of 1934 (as amended, the “Exchange Act,” which term, as used herein, includes the rules and
regulations of the Commission promulgated thereunder) prior to the Time of Sale
and incorporated (or deemed to be incorporated) by reference in the Pricing
Disclosure Package (including the Preliminary Offering Memorandum) or the Final
Offering Memorandum (as the case may be), and all references herein to the
terms “amend,” “amendment”
or “supplement” with respect to the Final
Offering Memorandum shall be deemed to mean and include all information filed
under the Exchange Act after the Time of Sale and incorporated (or deemed to be
incorporated) by reference in the Final Offering Memorandum.

 

The Company and the Guarantors hereby confirm their
agreements with the Initial Purchasers as follows:

 

2

 

SECTION 1.                                Representations
and Warranties.  Each of the
Company and the Guarantors, jointly and severally, hereby represents, warrants
and covenants to each Initial Purchaser that, as of the date hereof and as of
the Closing Date (references in this Section 1 to the “Offering Memorandum” are to (x) the Pricing Disclosure
Package in the case of representations and warranties made as of the date
hereof and (y) the Final Offering Memorandum in the case of representations
and warranties made as of the Closing Date):

 

(a)                                  No
Registration Required. 
Subject to compliance by the Initial Purchasers with the representations
and warranties set forth in Section 2 hereof and with the procedures set
forth in Section 7 hereof, it is not necessary in connection with the
offer, sale and delivery of the Securities to the Initial Purchasers and to
each Subsequent Purchaser in the manner contemplated by this Agreement and the
Offering Memorandum to register the Securities under the Securities Act or,
until such time as the Exchange Securities are issued pursuant to an effective
registration statement, to qualify the Indenture under the Trust Indenture Act
of 1939 (the “Trust Indenture Act,” which term,
as used herein, includes the rules and regulations of the Commission promulgated
thereunder).

 

(b)                                 No
Integration of Offerings or General Solicitation.  None of the Company, its affiliates (as such
term is defined in Rule 501 under the Securities Act) (each, an “Affiliate”), or any person acting on its or any of their
behalf (other than the Initial Purchasers, as to whom the Company makes no
representation or warranty) has, directly or indirectly, solicited any offer to
buy or offered to sell, or will, directly or indirectly, solicit any offer to
buy or offer to sell, in the United States or to any United States citizen or
resident, any security which is or would be integrated with the sale of the Securities
in a manner that would require the Securities to be registered under the
Securities Act.  None of the Company, its
Affiliates, or any person acting on its or any of their behalf (other than the
Initial Purchasers, as to whom the Company makes no representation or warranty)
has engaged or will engage, in connection with the offering of the Securities,
in any form of general solicitation or general advertising within the meaning
of Rule 502 under the Securities Act. 
With respect to those Securities sold in reliance upon Regulation S, (i) none
of the Company, its Affiliates or any person acting on its or their behalf
(other than the Initial Purchasers, as to whom the Company makes no
representation or warranty) has engaged or will engage in any “directed selling
efforts” within the meaning of Regulation S and (ii) each of the Company
and its Affiliates and any person acting on its or their behalf (other than the
Initial Purchasers, as to whom the Company makes no representation or warranty)
has complied and will comply with the offering restrictions set forth in
Regulation S.

 

(c)                                  Eligibility
for Resale under Rule 144A.  The Securities are eligible for resale
pursuant to Rule 144A and will not be, at the Closing Date, of the same
class as securities listed on a national securities exchange registered under Section 6
of the Exchange Act or quoted in a U.S. automated interdealer quotation system.

 

(d)                                 The
Pricing Disclosure Package and Offering Memorandum.  Neither the Pricing Disclosure Package, as of
the Time of Sale, nor the Final Offering Memorandum, as of its date or (as
amended or supplemented in accordance with Section 3(a), as applicable) as
of the Closing Date, contains or represents an untrue statement of a material
fact or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that this representation, warranty and agreement
shall not apply to statements in or omissions from the Pricing Disclosure
Package, the Final Offering Memorandum or any amendment or supplement thereto
made in reliance upon and in conformity with information furnished to the
Company in writing by any Initial Purchaser 

 

3

 

through the Representative
expressly for use in the Pricing Disclosure Package, the Final Offering
Memorandum or amendment or supplement thereto, as the case may be; it being
understood and agreed that the only such information furnished by the Initial
Purchasers consists of the information described in Section 8(b).  The Pricing Disclosure Package contains, and
the Final Offering Memorandum will contain, all the information specified in,
and meeting the requirements of, Rule 144A.  The Company has not distributed and will not
distribute, prior to the later of the Closing Date and the completion of the
Initial Purchasers’ distribution of the Securities, any offering material in
connection with the offering and sale of the Securities other than the Pricing
Disclosure Package and the Final Offering Memorandum.

 

(e)                                  Company
Additional Written Communications.  The Company has not made, used, distributed
or authorized any person to make, use or distribute on its behalf, and will not
make, use, distribute, or authorize any person to make, use or distribute on
its behalf, any written communication that constitutes an offer to sell or
solicitation of an offer to buy the Securities other than (i) the Pricing
Disclosure Package, (ii) the Final Offering Memorandum and (iii) any
electronic road show or other written communications, in each case used in
accordance with Section 3(a).  Each
such communication by the Company or its agents and representatives pursuant to
clause (iii) of the preceding sentence (each, a “Company
Additional Written Communication”), when taken together with the
Pricing Disclosure Package, did not as of the Time of Sale, and at the Closing
Date will not, contain any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided that
this representation, warranty and agreement shall not apply to statements in or
omissions from each such Company Additional Written Communication made in
reliance upon and in conformity with information furnished to the Company in
writing by any Initial Purchaser through the Representative expressly for use
in any Company Additional Written Communication; it being understood and agreed
that the only such information furnished by the Initial Purchasers consists of
the information described in Section 8(b).

 

(f)                                    Incorporated
Documents.  The
documents incorporated or deemed to be incorporated by reference in the
Offering Memorandum at the time they were or hereafter are filed with the
Commission (collectively, the “Incorporated Documents”)
complied and will, if and when hereafter so filed, comply in all material
respects with the requirements of the Exchange Act.  Each such Incorporated Document, when taken
together with the Pricing Disclosure Package, did not as of the Time of Sale,
and at the Closing Date will not, contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.

 

(g)                                 The
Purchase Agreement.  This
Agreement has been duly authorized, executed and delivered by the Company and
the Guarantors.

 

(h)                                 The
Registration Rights Agreement.  The Registration Rights Agreement has been
duly authorized and, on the Closing Date, will have been duly executed and
delivered by, and will constitute a valid and binding agreement of, the Company
and the Guarantors, enforceable in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency, fraudulent conveyance
or transfer, reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles (regardless of whether such enforceability is considered in a
proceeding at law or in equity) and except as rights to indemnification and
contribution may be limited by applicable law and public policy considerations.

 

4

 

(i)                                     Authorization
of the Notes, the Guarantees and the Exchange Notes.  The Notes to be purchased by the Initial
Purchasers from the Company will on the Closing Date be in the form
contemplated by the Indenture, have been duly authorized for issuance and sale
pursuant to this Agreement and the Indenture and, at the Closing Date, will
have been duly executed by the Company and, when authenticated in the manner
provided for in the Indenture and delivered against payment of the purchase
price therefor, will constitute valid and binding obligations of the Company,
enforceable in accordance with their terms, except as the enforcement thereof
may be limited by bankruptcy, insolvency, fraudulent conveyance or transfer, reorganization,
moratorium or other similar laws relating to or affecting the rights and
remedies of creditors or by general equitable principles (regardless of whether
such enforceability is considered in a proceeding at law or in equity) and will
be entitled to the benefits of the Indenture. 
The Exchange Notes have been duly and validly authorized for issuance by
the Company, and when issued and authenticated in accordance with the terms of
the Indenture, the Registration Rights Agreement and the Exchange Offer, will
constitute valid and binding obligations of the Company, enforceable against
the Company in accordance with their terms, except as the enforcement thereof
may be limited by bankruptcy, insolvency, fraudulent conveyance or transfer,
reorganization, moratorium or other similar laws relating to or affecting the
rights and remedies of creditors or by general equitable principles (regardless
of whether such enforceability is considered in a proceeding at law or in
equity) and will be entitled to the benefits of the Indenture.  The Guarantees of the Notes on the Closing
Date and the Guarantees of the Exchange Notes when issued will be in the
respective forms contemplated by the Indenture and have been duly authorized
for issuance pursuant to this Agreement and the Indenture; the Guarantees of
the Notes, at the Closing Date, will have been duly executed by each of the
Guarantors and, when the Notes have been authenticated in the manner provided
for in the Indenture and issued and delivered against payment of the purchase
price therefor, the Guarantees of the Notes will constitute valid and binding
agreements of the Guarantors; and, when the Exchange Notes have been
authenticated in the manner provided for in the Indenture and issued and
delivered in accordance with the Registration Rights Agreement, the Guarantees
of the Exchange Notes will constitute valid and binding agreements of the Guarantors,
in each case, enforceable in accordance with their terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency, fraudulent
conveyance or transfer, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles (regardless of whether such enforceability is considered
in a proceeding at law or in equity) and will be entitled to the benefits of
the Indenture.

 

(j)                                     Authorization
of the Indenture.  The
Indenture has been duly authorized by the Company and the Guarantors and, at
the Closing Date, will have been duly executed and delivered by the Company and
the Guarantors and will constitute a valid and binding agreement of the Company
and the Guarantors, enforceable against the Company and the Guarantors in accordance
with its terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency, fraudulent conveyance or transfer, reorganization, moratorium or
other similar laws relating to or affecting the rights and remedies of
creditors or by general equitable principles (regardless of whether such
enforceability is considered in a proceeding at law or in equity).

 

(k)                                  Security
Documents.  Each of the
Security Documents has been duly authorized by the Company and/or the
applicable Guarantor, as appropriate, and, when executed and delivered by the
Company and/or the applicable Guarantor and the Collateral Agent, will
constitute the legal, valid, binding and enforceable agreement of the Company
and/or the applicable Guarantor, except as the enforcement thereof may be
limited by bankruptcy, insolvency, fraudulent conveyance or transfer,
reorganization, moratorium or other similar laws relating to or affecting the
rights and remedies of creditors or by general equitable principles (regardless
of whether such enforceability

 

5

 

is considered in a
proceeding at law or in equity) and except as rights to indemnification and
contribution may be limited by applicable law and public policy
considerations.  The Security Documents,
when executed and delivered in connection with the sale of the Securities, will
create in favor of the Collateral Agent for the benefit of the Trustee and the
holders of the Securities, valid and enforceable security interests in the
Collateral and, upon the filing of all necessary Uniform Commercial Code
financing statements, if any, in the proper filing office in the appropriate
jurisdiction and the taking of the other actions, in each case as further
described in the Security Documents (to the extent that a security interest in
the Collateral may be perfected by filing or such actions), the security
interests in the Collateral in favor of the Collateral Agent for the benefit of
the Trustee and the holders of the Securities will be perfected security
interests in the Collateral, superior to and prior to the liens in the
Collateral of all third persons other than Permitted Collateral Liens.

 

(l)                                     Description
of the Securities, the Exchange Securities, the Security Documents, the
Registration Rights Agreement and the Indenture.  The Securities, the Exchange Securities, the
Security Documents, the Registration Rights Agreement and the Indenture will
conform in all material respects to the respective statements relating thereto
contained in the Offering Memorandum.

 

(m)                               No
Material Adverse Change. 
Except as otherwise disclosed in the Offering Memorandum (exclusive of
any amendment or supplement thereto), subsequent to the respective dates as of
which information is given in the Offering Memorandum (exclusive of any amendment
or supplement thereto):  (i) there
has been no material adverse change, or any development that could reasonably
be expected to result in a material adverse change, in the condition, financial
or otherwise, or in the business or operations, whether or not arising from
transactions in the ordinary course of business, of the Company and its
subsidiaries, considered as one entity (any such change is called a “Material Adverse Change”); (ii) the Company and its
subsidiaries, considered as one entity, have not incurred any material
liability or obligation, indirect, direct or contingent, not in the ordinary
course of business nor entered into any material transaction or agreement not
in the ordinary course of business; and (iii) there has been no dividend
or distribution of any kind declared, paid or made by the Company or, except
for dividends paid to the Company or other subsidiaries, any of its subsidiaries
on any class of capital stock or repurchase or redemption by the Company or any
of its subsidiaries of any class of capital stock.

 

(n)                                 Independent
Accountants.  Each of KPMG
LLP and Deloitte & Touche S.p.A., which expressed its opinion with
respect to the audited consolidated financial statements (which term as used in
this Agreement includes the related notes thereto) of the Company and Arcotronics
Italia S.p.A., respectively, and Ernst & Young LLP, which reviewed
certain of the Company’s unaudited consolidated financial statements (which
term as used in this Agreement includes the related notes thereto), in each
case, filed with the Commission and included or incorporated by reference in
the Offering Memorandum, is an independent registered public accounting firm
with respect to the Company (in the case of KPMG LLP and Ernst & Young
LLP) or Arcotronics Italia S.p.A.(in the case of Deloitte & Touche
S.p.A.), as required by the Securities Act, the Exchange Act and the rules of
the Public Company Accounting Oversight Board. 
Any non-audit services provided by KPMG LLP or Ernst & Young
LLP to the Company or by Deloitte & Touche S.p.A. to Arcotronics
Italia S.p.A. have been approved by the Audit Committee of the Board of
Directors of the Company or Arcotronics Italia S.p.A., as applicable.

 

(o)                                 Preparation
of the Financial Statements.  The historical financial statements, together
with the related schedules and notes, included in the Offering Memorandum
present 

 

6

 

fairly in all material
respects the consolidated financial position of the entities to which they relate
as of and at the dates indicated and the results of their operations and cash
flows for the periods specified.  Such
financial statements have been prepared in conformity with generally accepted accounting
principles as applied in the United States applied on a consistent basis
throughout the periods involved, except as may be expressly stated in the
related notes thereto.  The financial data
set forth in the Offering Memorandum under the captions “Summary—Summary
Consolidated Financial Data” and “Selected Financial Data” fairly present in
all material respects the information set forth therein and have been compiled
on a basis consistent with that of the audited financial statements contained
in the Offering Memorandum.  The
statistical and market-related data included in the Offering Memorandum are
based on or derived from sources that the Company and its subsidiaries believe
to be reliable and accurate in all material respects.

 

(p)                                 Incorporation
and Good Standing of the Company, Guarantors and Significant Subsidiaries.  Each of the Company, the Guarantors and its “significant
subsidiaries” (as defined in Rule1-02(w) of Regulation S-X promulgated by
the Commission and, together with the Guarantors, the “Significant
Subsidiaries”)  has been duly
incorporated or formed, as applicable, and is validly existing as a
corporation, limited partnership or limited liability company, as applicable,
in good standing under the laws of the jurisdiction of its incorporation or
formation, as applicable, and has corporate, partnership or limited liability
company, as applicable, power and authority to own, lease and operate its
properties and to conduct its business as described in the Offering Memorandum
and, in the case of the Company and the Guarantors, to enter into and perform
its obligations under each of this Agreement, the Registration Rights
Agreement, the Securities, the Exchange Securities, the Security Documents and
the Indenture. Each of the Company and each Significant Subsidiary is duly
qualified as a foreign corporation, limited partnership or limited liability
company, as applicable, to transact business and is in good standing or
equivalent status in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except for such jurisdictions where the failure to so qualify or to
be in good standing would not, individually or in the aggregate, result in a
Material Adverse Change.  All of the
issued and outstanding capital stock or other ownership interest of each
Significant Subsidiary has been duly authorized and validly issued, is fully
paid and nonassessable and is owned by the Company, directly or through subsidiaries,
free and clear of any security interest, mortgage, pledge, lien, encumbrance or
claim, except as disclosed in the Offering Memorandum.  The Company does not own or control, directly
or indirectly, any corporation, association or other entity not listed in Exhibit 21
to the Company’s Annual Report on Form 10-K for the fiscal year ended March 31,
2009 that is required to be so listed.

 

(q)                                 Capitalization
and Other Capital Stock Matters.  At December 31,
2009, on a consolidated basis, after giving pro forma effect to the issuance
and sale of the Securities pursuant hereto and the use of the net proceeds from
the sale of the Securities as described under the caption “Use of Proceeds” in
the Offering Memorandum, the Company would have an authorized and outstanding
capitalization as set forth in the Offering Memorandum under the caption “Capitalization”
(other than for subsequent issuances of capital stock, if any, pursuant to
employee benefit plans described in the Offering Memorandum or upon exercise of
outstanding options or warrants described in the Offering Memorandum).

 

(r)                                    Non-Contravention
of Existing Instruments; No Further Authorizations or Approvals Required.  Neither the Company nor any
of its subsidiaries is (i) in violation of its charter, bylaws or other
constitutive document or (ii) in default (or, with the giving of notice or
lapse of time, would be in default) (“Default”) under
any indenture, mortgage, loan or credit 

 

7

 

agreement, note, contract,
franchise, lease or other instrument to which the Company or any of its
subsidiaries is a party or by which it or any of them may be bound (including,
without limitation, the respective instruments governing the Platinum Working
Capital Loan, Platinum Line of Credit Loan, Platinum Term Loan, UniCredit
Facility A, UniCredit Facility B, Vishay Term Loan and the Convertible Notes
(each as defined in the Offering Memorandum)) or to which any of the property
or assets of the Company or any of its subsidiaries is subject (each, an “Existing Instrument”), except, in the case of clause (ii) above,
for such Defaults as would not, individually or in the aggregate, result in a
Material Adverse Change.  The Company’s
and the Guarantors’, as applicable, execution, delivery and performance of this
Agreement, the Registration Rights Agreement, the Security Documents and the
Indenture, and the issuance and delivery of the Securities and the Exchange
Securities, and consummation of the transactions contemplated hereby and
thereby and by the Offering Memorandum (i) have been duly authorized by
all necessary corporate action and will not result in any violation of the provisions
of the charter, bylaws or other constitutive document of the Company or any
subsidiary, (ii) will not conflict with or constitute a breach of, or Default
or a Debt Repayment Triggering Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to, or require the
consent of any other party to, any Existing Instrument, except, in the case of
this clause (ii), for such conflicts, breaches, Defaults, liens, charges or
encumbrances as would not, individually or in the aggregate, result in a
Material Adverse Change and (iii) will not result in any violation of any
law, administrative regulation or administrative or court decree applicable to
the Company or any subsidiary, except, in the case of this clause (iii), for
such violations as would not, individually or in the aggregate, result in a Material
Adverse Change.  Subject to compliance by
the Initial Purchasers with the representations and warranties set forth in Section 2
hereof and with the procedures set forth in Section 7 hereof, no consent,
approval, authorization or other order of, or registration or filing with, any
court or other governmental or regulatory authority or agency is required for
the Company’s execution, delivery and performance of this Agreement, the
Registration Rights Agreement, the Security Documents or the Indenture, or the
issuance and delivery of the Securities or the Exchange Securities, or
consummation of the transactions contemplated hereby and thereby and by the
Offering Memorandum, except (A) such as have been obtained or made by the
Company and are in full force and effect under the Securities Act, applicable
securities laws of the several states of the United States or provinces of
Canada and except such as may be required by the securities laws of the several
states of the United States or provinces of Canada with respect to the Company’s
obligations under the Registration Rights Agreement and (B) filings of
financing statements under the Uniform Commercial Code as from time to time in
effect in the relevant jurisdictions and such filings necessary to perfect the
Collateral Agent’s security interests in the Collateral.  As used herein, a “Debt
Repayment Triggering Event” means any event or condition which gives,
or with the giving of notice or lapse of time would give, the holder of any
note, debenture or other evidence of indebtedness (or any person acting on such
holder’s behalf) the right to require the repurchase, redemption or repayment
of all or a portion of such indebtedness by the Company or any of its subsidiaries.

 

(s)                                  No
Material Actions or Proceedings.  There are no legal or governmental actions,
suits or proceedings pending or, to the best of the Company’s knowledge,
threatened (i) against or affecting the Company or any of its subsidiaries
or (ii) which has as the subject thereof any property owned or leased by,
the Company or any of its subsidiaries and any such action, suit or proceeding
that would result in a Material Adverse Change or adversely affect the consummation
of the transactions contemplated by this Agreement.  Except as would result in a Material Adverse
Change, no material labor dispute with the employees of the Company or any of
its subsidiaries exists or, to the best of the Company’s knowledge, is
threatened or imminent.

 

8

 

(t)                                    Intellectual
Property Rights.  The Company
and its subsidiaries own or possess a right to use sufficient trademarks, trade
names, patent rights, copyrights, licenses, approvals, trade secrets and other
similar rights (collectively, “Intellectual Property
Rights”) reasonably necessary to conduct their businesses as now
conducted, except where the failure to so own or possess would not,
individually or in the aggregate, result in a Material Adverse Change, and the
expected expiration of any of such Intellectual Property Rights would not
result in a Material Adverse Change. 
Neither the Company nor any of its subsidiaries has received any notice
of infringement or conflict with asserted Intellectual Property Rights of
others, which infringement or conflict would result in a Material Adverse
Change.

 

(u)                                 All
Necessary Permits, etc.  The
Company and each subsidiary possess such valid and current certificates,
authorizations or permits issued by the appropriate state, federal or foreign
regulatory agencies or bodies necessary to own, lease and operate its
properties and to conduct their respective businesses, except where the failure
to so possess would not, individually or in the aggregate, result in a Material
Adverse Change, and neither the Company nor any subsidiary has received any
notice of proceedings relating to the revocation or modification of, or
non-compliance with, any such certificate, authorization or permit which,
singly or in the aggregate, if the subject of an unfavorable decision, ruling
or finding, would result in a Material Adverse Change.

 

(v)                                 Title
to Properties.  The Company
and each of its subsidiaries has good and, in the case of real property only,
marketable title to all the properties and assets reflected as owned in the
financial statements referred to in Section 1(o) hereof (or elsewhere
in the Offering Memorandum), in each case free and clear of any security
interests, mortgages, liens, encumbrances, equities, claims and other defects,
except as disclosed in the Offering Memorandum and except for such security
interests, mortgages, liens, encumbrances, equities, claims and other defects
or failures to have such title as do not materially and adversely affect the
value of such properties taken as a whole and do not materially interfere with
the use made or proposed to be made of such properties by the Company and its
subsidiaries, considered as one enterprise. 
The real property, improvements, equipment and personal property held
under lease by the Company or any subsidiary are held under valid and
enforceable leases, with such exceptions as are not material and do not
materially interfere with the use made or proposed to be made of such real property,
improvements, equipment or personal property by the Company and its
subsidiaries, considered as one enterprise.

 

(w)                               Collateral.  After giving effect to the issuance and sale
of the Securities pursuant hereto and the use of the net proceeds therefrom as
described under the caption “Use of Proceeds” in the Offering Memorandum, the
Company and/or the applicable Guarantor will own, have rights in or have the
power to transfer rights in the Collateral, free and clear of any Liens (as defined
under the caption “Description of Notes” in the Offering Memorandum) other than
Permitted Collateral Liens and restrictions on transfer under applicable
securities laws.

 

(x)                                   Tax Law
Compliance.  The Company
and its subsidiaries have filed all necessary federal, state, local and foreign
tax returns and have timely paid all taxes required to be paid by any of them
(whether or not shown on a tax return), including as a withholding agent, and,
if due and payable, any related or similar assessment, fine or penalty levied against
any of them, except (i) for any payments as may be being contested in good
faith and by appropriate proceedings and for which the Company has established
adequate reserves in accordance with GAAP or (ii) where the failure to
make such filings or payment would not, individually or in the aggregate, result
in a Material Adverse Change.  The
Company has made adequate charges, accruals and reserves

 

9

 

in accordance with GAAP in
the applicable financial statements referred to in Section 1(o) hereof
in respect of all federal, state, local and foreign taxes for all periods as to
which the tax liability of the Company or any of its subsidiaries has not been
finally determined, except to the extent of any inadequacy that would not,
individually or in the aggregate, result in a Material Adverse Change.  Except as would not, individually or in the
aggregate, result in a Material Adverse Change, there is no tax deficiency that
has been, or could reasonably be expected to be, asserted against the Company
or any of its subsidiaries or any of their respective properties or assets.

 

(y)                                 Company
and Guarantors Not an “Investment Company”.  Neither the Company nor any Guarantor is, or
after receipt of payment for the Securities will be, an “investment company”
within the meaning of the Investment Company Act of 1940, as amended.

 

(z)                                   Insurance.  Each of the Company and its subsidiaries are
insured by recognized, financially sound institutions with policies in such
amounts and with such deductibles and covering such risks as the Company
considers adequate and customary for their businesses including, without
limitation, policies covering real and personal property owned or leased by the
Company and its subsidiaries against theft, damage, destruction, acts of
vandalism and earthquakes.  The Company
has no reason to believe that it or any subsidiary will not be able (i) to
renew its existing insurance coverage as and when such policies expire or (ii) to
obtain comparable coverage from similar institutions as may be necessary or
appropriate to conduct its business as now conducted and at a cost that would
not result in a Material Adverse Change. 
During the previous five fiscal years, neither the Company nor any
subsidiary has been denied any material insurance coverage which it has sought
or for which it has applied.

 

(aa)                            No
Price Stabilization or Manipulation.  None of the Company or any of the Guarantors
has taken or will take, directly or indirectly, any action designed to or that
might be reasonably expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Securities.

 

(bb)                          Solvency.  The Company and the Guarantors, taken as a
whole, are, and immediately after the Closing Date will be, Solvent.  As used herein, the term “Solvent” means, with respect to any person on a particular
date, that on such date (i) the fair market value of the assets of such person
is greater than the total amount of liabilities (including contingent
liabilities) of such person, (ii) the present fair salable value of the
assets of such person is greater than the amount that will be required to pay
the probable liabilities of such person on its debts as they become absolute
and matured, (iii) such person is able to realize upon its assets and pay
its debts and other liabilities, including contingent obligations, as they
mature and (iv) such person does not have unreasonably small capital.

 

(cc)                            Compliance
with Sarbanes-Oxley.  The Company
and its officers and directors, in their capacities as such, are in compliance
in all material respects with the applicable provisions of the Sarbanes-Oxley
Act of 2002 (the “Sarbanes-Oxley Act,”
which term, as used herein, includes the rules and regulations of the
Commission promulgated thereunder).

 

(dd)                          Company’s
Accounting System.  The Company
and its subsidiaries maintain a system of internal accounting controls that is
sufficient to provide reasonable assurances that: (i) transactions are
executed in accordance with management’s general or specific authorization; (ii) transactions
are recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles as applied in the
United States and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management’s 

 

10

 

general or specific authorization;
and (iv) the recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with respect to
any differences.

 

(ee)                            Disclosure
Controls and Procedures.  The
Company has established and maintains disclosure controls and procedures (as
such term is defined in Rules 13a-15 and 15d-15 under the Exchange Act);
such disclosure controls and procedures are reasonably effective to perform the
functions for which they were established subject to the limitations of any
such control system; the Company’s auditors and the Audit Committee of the
Board of Directors of the Company have been advised of:  (i) any significant deficiencies or
material weaknesses in the design or operation of internal accounting controls
which could adversely affect the Company’s ability to record, process,
summarize, and report financial data; and (ii) any fraud, whether or not
material, that involves management or other employees who have a role in the
Company’s internal accounting controls; and since the date of the most recent
evaluation of such disclosure controls and procedures, there have been no
significant changes in internal accounting controls or in other factors that
could significantly affect internal accounting controls, including any
corrective actions with regard to significant deficiencies and material
weaknesses.

 

(ff)                                Regulations
T, U, X.  Neither the Company nor any
Guarantor nor any of their respective subsidiaries nor any agent thereof acting
on their behalf has taken, and none of them will take, any action that might
cause this Agreement or the issuance or sale of the Securities to violate
Regulation T, Regulation U or Regulation X of the Board of Governors of the
Federal Reserve System.

 

(gg)                          Compliance
with and Liability under Environmental Laws.  Except as would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Change: (i) each
of the Company and its subsidiaries and their respective operations and facilities
are in compliance with, and not subject to any known liabilities under,
applicable Environmental Laws, which compliance includes, without limitation,
having obtained and being in compliance with any permits, licenses or other
governmental authorizations or approvals required by Environmental Laws, and
having made all filings and provided all financial assurances and notices,
required for the ownership and operation of the business, properties and
facilities of the Company or its subsidiaries required under applicable
Environmental Laws, and compliance with the terms and conditions thereof; (ii) neither
the Company nor any of its subsidiaries has received any written communication,
whether from a governmental authority, citizens group, employee or otherwise,
that alleges that the Company or any of its subsidiaries is in violation of any
Environmental Law; (iii) there is no claim, action or cause of action
filed with a court or governmental authority, no investigation with respect to
which the Company has received written notice, and no written notice by any
person or entity alleging actual or potential liability on the part of the
Company or any of its subsidiaries based on or pursuant to any Environmental
Law pending or, to the best of the Company’s knowledge, threatened against the
Company or any of its subsidiaries or any person or entity whose liability
under or pursuant to any Environmental Law the Company or any of its
subsidiaries has retained or assumed either contractually or by operation of
law; (iv) neither the Company nor any of its subsidiaries is conducting or
paying for, in whole or in part, any investigation, response or other
corrective action pursuant to any Environmental Law at any site or facility,
nor is any of them subject or a party to any order, judgment, decree, contract
or agreement which imposes any obligation or liability under any Environmental
Law; (v) no lien, charge, encumbrance or restriction has been recorded
pursuant to any Environmental Law with respect to any assets, facility or
property owned, or to the knowledge of the Company, operated or leased by the
Company or any of its subsidiaries; and (vi) there are no past or present
actions, activities, 

 

11

 

circumstances, conditions or
occurrences, including, without limitation, the Release or threatened Release
of any Material of Environmental Concern, that could reasonably be expected to
result in a violation of or liability under any Environmental Law on the part
of the Company or any of its subsidiaries, including without limitation, any
such liability which the Company or any of its subsidiaries has retained or
assumed either contractually or by operation of law.

 

For purposes of this Agreement, “Environment” means ambient air, indoor air, surface water,
groundwater, drinking water, soil, surface and subsurface strata, and natural
resources such as wetlands, flora and fauna. “Environmental
Laws” means the common law and all federal, state, local and foreign
laws or regulations, ordinances, codes, orders, decrees, judgments and injunctions
issued, promulgated or entered thereunder, relating to pollution or protection
of the Environment or protection of human health from exposure to Materials of
Environmental Concern, including without limitation, those relating to (i) the
Release or threatened Release of Materials of Environmental Concern; and (ii) the
manufacture, processing, distribution, use, generation, treatment, storage,
transport, handling or recycling of Materials of Environmental Concern.  “Materials of Environmental
Concern” means any substance, material, pollutant, contaminant, chemical,
waste, compound, or constituent, in any form, including without limitation,
petroleum and petroleum products, that is regulated under or which can give
rise to liability under any Environmental Law. 
“Release” means any release, spill,
emission, discharge, deposit, disposal, leaking, pumping, pouring, dumping,
emptying, injection or leaching into the Environment, or into, from or through any
building, structure or facility.

 

(hh)                          ERISA
Compliance.  Except as
disclosed in the Offering Memorandum and except as would not, individually or
in the aggregate, result in a Material Adverse Change, (A) the Company and
its subsidiaries and any “employee benefit plan” (as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974 (as amended, “ERISA,” which term, as used herein, includes the regulations
and published interpretations thereunder)) established or maintained by the
Company, its subsidiaries or their ERISA Affiliates (as defined below) are in
compliance with the applicable provisions of ERISA and other applicable laws, (B) no
“reportable event” (as defined under ERISA) has occurred or is reasonably
expected to occur with respect to any “employee benefit plan” (as defined in Section 3(3) of
ERISA) that is subject to ERISA and established or maintained by the Company,
its subsidiaries or any of their ERISA Affiliates, (C) no “single employer
plan” (as defined in Section 4001 of ERISA) that is subject to ERISA and
established or maintained by the Company, its subsidiaries or any of their
ERISA Affiliates, if such “employee benefit plan” were terminated, would have
any “amount of unfunded benefit liabilities” (as defined under ERISA), (D) none
of the Company, its subsidiaries or any of their ERISA Affiliates has incurred
or reasonably expects to incur any liability under (i) Title IV of
ERISA with respect to termination of, or withdrawal from, any “employee benefit
plan” or (ii) Sections 412, 4971, 4975 or 4980B of the Code and (E) each
“employee benefit plan” established or maintained by the Company or its subsidiaries  that is intended to be qualified under Section 401
of the Code is so qualified and nothing has occurred, whether by action or
failure to act, which would reasonably be expected to cause the loss of such
qualification.  “ERISA Affiliate”
means, with respect to the Company or a subsidiary, any member of any group of
organizations described in Sections 414(b) or (c) of the
Internal Revenue Code of 1986 (as amended, the “Code,”
which term, as used herein, includes the regulations and published
interpretations thereunder) or, solely for purposes of Sections 302 of ERISA
and 412 of the Code, Sections (m) or (o) of the Code, of which the
Company or such subsidiary is a member.

 

(ii)                                  Compliance
with Labor Laws.  Except as
would not, individually or in the aggregate, result in a Material Adverse
Change, (i) there is (A) no unfair labor practice complaint 

 

12

 

pending or, to the best of
the Company’s knowledge, threatened against the Company or any of its
subsidiaries before the National Labor Relations Board, and no grievance or
arbitration proceeding arising out of or under collective bargaining agreements
pending, or to the best of the Company’s knowledge, threatened, against the
Company or any of its subsidiaries, (B) no strike, labor dispute, slowdown
or stoppage pending or, to the best of the Company’s knowledge, threatened
against the Company or any of its subsidiaries and (C) no union
representation question existing with respect to the employees of the Company
or any of its subsidiaries and, to the best of the Company’s knowledge, no
union organizing activities taking place and (ii) there has been no
violation of any federal, state or local law relating to discrimination in
hiring, promotion or pay of employees or of any applicable wage or hour laws.

 

(jj)                                  Related
Party Transactions.  No
relationship, direct or indirect, exists between or among any of the Company or
any affiliate of the Company, on the one hand, and any director, officer,
member, stockholder, customer or supplier of the Company or any affiliate of
the Company, on the other hand, which is required by the Securities Act to be
disclosed in a registration statement on Form S-1 which is not so
disclosed in the Offering Memorandum. 
Except as disclosed in the Offering Memorandum, there are no outstanding
loans, advances (except advances for business expenses in the ordinary course
of business) or guarantees of indebtedness by the Company or any affiliate of
the Company to or for the benefit of any of the officers or directors of the
Company or any affiliate of the Company or any of their respective family
members.

 

(kk)                            No
Unlawful Contributions or Other Payments.  Neither the Company nor any of its
subsidiaries nor, to the knowledge of the Company, any director, officer,
agent, employee or affiliate of the Company or any of its subsidiaries is aware
of or has taken any action, directly or indirectly, that would result in a
violation by such persons of the FCPA, including, without limitation, making
use of the mails or any means or instrumentality of interstate commerce
corruptly in furtherance of an offer, payment, promise to pay or authorization
of the payment of any money, or other property, gift, promise to give, or
authorization of the giving of anything of value to any “foreign official” (as
such term is defined in the FCPA) or any foreign political party or official
thereof or any candidate for foreign political office, in contravention of the
FCPA and the Company, its subsidiaries and, to the knowledge of the Company,
its affiliates have conducted their businesses in compliance with the FCPA and
have instituted and maintain policies and procedures designed to ensure, and
which are reasonably expected to continue to ensure, continued compliance
therewith.

 

“FCPA” means
Foreign Corrupt Practices Act of 1977, as amended, and the rules and
regulations thereunder.

 

(ll)                                  No
Conflict with Money Laundering Laws.  The operations of the Company and its
subsidiaries are and have been conducted at all times in compliance with
applicable financial recordkeeping and reporting requirements of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, the money
laundering statutes of all applicable jurisdictions, the rules and
regulations thereunder and any related or similar rules, regulations or
guidelines issued, administered or enforced by any governmental agency
(collectively, the “Money Laundering Laws”)
and no action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Company or any of its
subsidiaries with respect to the Money Laundering Laws is pending or, to the
best knowledge of the Company, threatened.

 

(mm)                      No
Conflict with OFAC Laws. 
Neither the Company nor any of its subsidiaries nor, to the knowledge of
the Company, any director, officer, agent, employee or affiliate of the 

 

13

 

Company or any of its
subsidiaries is currently subject to any U.S. sanctions administered by the
Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not directly or indirectly use
the proceeds of the offering, or lend, contribute or otherwise make available
such proceeds to any subsidiary, joint venture partner or other person or
entity, for the purpose of financing the activities of any person currently
subject to any U.S. sanctions administered by OFAC.

 

(nn)                          Regulation
S.  The Company, the Guarantors and
their respective affiliates and all persons acting on their behalf (other than
the Initial Purchasers, as to whom the Company and the Guarantors make no
representation) have complied with and will comply with the offering restrictions
requirements of Regulation S in connection with the offering of the
Securities outside the United States and, in connection therewith, the Offering
Memorandum will contain the disclosure required by Rule 902(g)(2).  Each of the Company and the Guarantors is a “reporting
issuer”, as defined in Rule 902 under the Securities Act.

 

(oo)                          Recent
Developments.  The net
sales and adjusted EBITDA ranges for the quarter ended March 31, 2010
included in the Time of Sale Information and the Offering Memorandum (exclusive
of any amendment or supplement thereto) under the heading “Summary—Recent
Developments” were determined by the Company with a reasonable basis and in
good faith.  Nothing has come to the attention of the Company that has
caused it to believe that the actual net sales and adjusted EBITDA amounts for
the quarter ended March 31, 2010 will be materially different from the
ranges disclosed in the Time of Sale Information and the Offering Memorandum
(exclusive of any amendment or supplement thereto).

 

Any certificate signed by an officer of the Company
or any Guarantor and delivered to the Initial Purchasers or to counsel for the
Initial Purchasers in connection with the transactions contemplated by this
Agreement shall be deemed to be a representation and warranty by the Company or
such Guarantor to the Initial Purchasers as to the matters set forth therein.

 

SECTION 2.                                Purchase,
Sale and Delivery of the Securities.

 

(a)                                  The
Securities.  Each of the
Company and the Guarantors agrees to issue and sell to the Initial Purchasers,
severally and not jointly, all of the Securities, and the Initial Purchasers
agree, severally and not jointly, to purchase from the Company and the
Guarantors the aggregate principal amount of Securities set forth opposite
their names on Schedule A, at a purchase price of 96.685% of the principal
amount thereof (i.e., net of a fee of $4,600,000 to the Initial Purchasers)
payable on the Closing Date, in each case, on the basis of the representations,
warranties and agreements herein contained, and upon the terms, subject to the
conditions thereto, herein set forth.

 

(b)                                 The
Closing Date.  Delivery of
certificates for the Securities in definitive form to be purchased by the Initial
Purchasers and payment therefor shall be made at the offices of Cahill Gordon &
Reindel LLP, 80 Pine Street, New York, New York 10005 (or such other place as
may be agreed to by the Company and the Representative at 9:00 a.m. New
York City time, on May 5, 2010, or such other time and date as the
Representative shall designate by notice to the Company (the time and date of
such closing are called the “Closing Date”).  The Company hereby acknowledges that
circumstances under which the Representative may provide notice to postpone the
Closing Date as originally scheduled include, but are in no way limited to, any
determination by the Company or the Initial Purchasers to recirculate to investors
copies of an amended or supplemented Offering Memorandum.

 

14

 

(c)                                  Delivery
of the Securities.  The Company
shall deliver, or cause to be delivered, to the Representative for the accounts
of the several Initial Purchasers certificates for the Notes at the Closing
Date against the irrevocable release of a wire transfer of immediately
available funds for the amount of the purchase price therefor.  The certificates for the Notes shall be in
such denominations and registered in the name of Cede & Co., as
nominee of the Depositary, pursuant to the DTC Agreement, and shall be made
available for inspection on the Business Day preceding the Closing Date at a
location in New York City, as the Representative may designate.  Time shall be of the essence, and delivery at
the time and place specified in this Agreement is a further condition to the
obligations of the Initial Purchasers.

 

(d)                                 Initial
Purchasers as Qualified Institutional Buyer.  Each Initial Purchaser severally and not
jointly represents and warrants to, and agrees with, the Company that:

 

(i)                  it will offer
and sell Securities only to (a) persons who it reasonably believes are “qualified
institutional buyers” within the meaning of Rule 144A ( “Qualified Institutional Buyers”) in transactions meeting the
requirements of Rule 144A or (b) upon the terms and conditions set
forth in Annex I to this Agreement;

 

(ii)               it is an
institutional “accredited investor” within the meaning of Rule 501(a)(1),
(2), (3) or (7) under the Securities Act; and

 

(iii)            it will not
offer or sell Securities by, any form of general solicitation or general
advertising, including but not limited to the methods described in Rule 502(c) under
the Securities Act.

 

SECTION 3.                                Additional
Covenants.  Each of the
Company and the Guarantors, jointly and severally, further covenants and agrees
with each Initial Purchaser as follows:

 

(a)                                  Preparation
of Final Offering Memorandum; Initial Purchasers’ Review of Proposed Amendments
and Supplements and Company Additional Written Communications.  As promptly as practicable following the Time
of Sale and in any event not later than the second Business Day following the
date hereof, the Company will prepare and deliver to the Initial Purchasers the
Final Offering Memorandum, which shall consist of the Preliminary Offering Memorandum
as modified only by the information contained in the Pricing Supplement.  The Company will not amend or supplement the
Preliminary Offering Memorandum or the Pricing Supplement.  The Company will not amend or supplement the
Final Offering Memorandum prior to the Closing Date unless the Representative
and counsel for the Initial Purchasers shall previously have been furnished a
copy of the proposed amendment or supplement at least two Business Days prior
to the proposed use or filing, and shall not have objected to such amendment or
supplement.  Before making, preparing,
using, authorizing, approving or distributing any Company Additional Written
Communication, the Company will furnish to the Representative a copy of such
written communication for review and will not make, prepare, use, authorize,
approve or distribute any such written communication to which the
Representative reasonably objects.

 

(b)                                 Amendments
and Supplements to the Final Offering Memorandum and Other Securities Act
Matters.  If at any
time prior to the Closing Date (i) any event shall occur or condition
shall exist as a result of which any of the Pricing Disclosure Package as then
amended or supplemented would include any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading or (ii) it is necessary to amend or supplement any of the
Pricing Disclosure Package to comply with law, the Company and the Guarantors 

 

15

 

will immediately notify the
Initial Purchasers thereof and forthwith prepare and (subject to Section 3(a) hereof)
furnish to the Initial Purchasers such amendments or supplements to any of the
Pricing Disclosure Package as may be necessary so that the statements in any of
the Pricing Disclosure Package as so amended or supplemented will not, in the
light of the circumstances under which they were made, be misleading or so that
any of the Pricing Disclosure Package will comply with all applicable law.  If, prior to the completion of the
distribution of the Securities by the Initial Purchasers with the Subsequent
Purchasers, any event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Final Offering Memorandum, as then amended
or supplemented, in order to make the statements therein, in the light of the
circumstances when the Final Offering Memorandum is delivered to a Subsequent
Purchaser, not misleading, or if in the judgment of the Initial Purchasers or
counsel for the Initial Purchasers it is otherwise necessary to amend or
supplement the Final Offering Memorandum to comply with law, the Company and
the Guarantors agree to promptly prepare (subject to Section 3(a) hereof),
file with the Commission and furnish at its own expense to the Initial
Purchasers, amendments or supplements to the Final Offering Memorandum so that
the statements in the Final Offering Memorandum as so amended or supplemented
will not, in the light of the circumstances at the Closing Date and at the time
of sale of Securities, be misleading or so that the Final Offering Memorandum,
as amended or supplemented, will comply with all applicable law.

 

The Company hereby expressly acknowledges
that the indemnification and contribution provisions of Sections 8 and 9
hereof are specifically applicable and relate to each offering memorandum,
registration statement, prospectus, amendment or supplement referred to in this
Section 3.

 

(c)                                  Copies
of the Offering Memorandum.  The Company agrees to furnish the Initial
Purchasers, without charge, as many copies of the Pricing Disclosure Package
and the Final Offering Memorandum and any amendments and supplements thereto as
it shall reasonably request.

 

(d)                                 Blue
Sky Compliance.  Each of the
Company and the Guarantors shall cooperate with the Representative and counsel
for the Initial Purchasers to qualify or register (or to obtain exemptions from
qualifying or registering) all or any part of the Securities for offer and sale
under the securities laws of the several states of the United States, the
provinces of Canada or any other jurisdictions designated by the
Representative, shall comply with such laws and shall continue such
qualifications, registrations and exemptions in effect so long as required for
the distribution of the Securities; provided, however, that none of the Company
or any of the Guarantors shall be required to qualify as a foreign corporation
or to take any action that would subject it to general service of process in
any such jurisdiction where it is not presently qualified or where it would be
subject to taxation as a foreign corporation. 
The Company will advise the Representative promptly of the suspension of
the qualification or registration of (or any such exemption relating to) the
Securities for offering, sale or trading in any jurisdiction or any initiation
or threat of any proceeding for any such purpose, and in the event of the
issuance of any order suspending such qualification, registration or exemption,
each of the Company and the Guarantors shall use its best efforts to obtain the
withdrawal thereof at the earliest possible moment.

 

(e)                                  Use of
Proceeds.  The Company
shall apply the net proceeds from the sale of the Securities sold by it in the
manner described under the caption “Use of Proceeds” in the Pricing Disclosure
Package.

 

16

 

(f)                                    The
Depositary.  The Company
will cooperate with the Initial Purchasers and use its best efforts to permit
the Securities to be eligible for clearance and settlement through the
facilities of the Depositary.

 

(g)                                 The
Liens.  The Company and the Guarantors
shall cooperate with the Initial Purchasers and use their respective best
efforts to cause the Securities to be secured by perfected first priority liens
on the Collateral to the extent and in the manner provided for in the Indenture
and the Security Documents and as described in the Pricing Disclosure Package,
in each case subject to no Liens except Permitted Collateral Liens.

 

(h)                                 Additional
Issuer Information.  Prior to the
completion of the distribution of the Securities by the Initial Purchasers with
the Subsequent Purchasers, the Company shall file, on a timely basis, with the
Commission all reports and documents required to be filed under Section 13
or 15 of the Exchange Act.  Additionally,
at any time when the Company is not subject to Section 13 or 15 of the
Exchange Act, for the benefit of holders and beneficial owners from time to
time of the Securities, the Company shall furnish, at its expense, upon
request, to holders and beneficial owners of Securities and prospective
purchasers of Securities information (“Additional Issuer Information”)
satisfying the requirements of Rule 144A(d).

 

(i)                                     Agreement
Not To Offer or Sell Additional Securities.  During the period of 90 days following the
date hereof, the Company will not, without the prior written consent of Banc of
America Securities LLC (which consent may be withheld at the sole discretion of
Banc of America Securities LLC), directly or indirectly, sell, offer, contract
or grant any option to sell, pledge, transfer or establish an open “put
equivalent position” within the meaning of Rule 16a-1 under the Exchange
Act, or otherwise dispose of or transfer, or announce the offering of, or file
any registration statement under the Securities Act in respect of, any debt
securities of the Company or securities exchangeable for or convertible into
debt securities of the Company (other than as contemplated by this Agreement
and to register the Exchange Securities).

 

(j)                                     No
Integration.  The Company
agrees that it will not and will use reasonable best efforts to cause its
Affiliates not to make any offer or sale of securities of the Company of any
class if, as a result of the doctrine of “integration” referred to in Rule 502
under the Securities Act, such offer or sale would render invalid (for the
purpose of (i) the sale of the Securities by the Company to the Initial
Purchasers, (ii) the resale of the Securities by the Initial Purchasers to
Subsequent Purchasers or (iii) the resale of the Securities by such
Subsequent Purchasers to others) the exemption from the registration
requirements of the Securities Act provided by Section 4(2) thereof
or by Rule 144A or by Regulation S thereunder or otherwise.

 

(k)                                  No
General Solicitation or Directed Selling Efforts.  The Company agrees that it will not and will
not permit any of its Affiliates or any other person acting on its or their
behalf (other than the Initial Purchasers, as to which no covenant is given) to
(i) solicit offers for, or offer or sell, the Securities by means of any
form of general solicitation or general advertising within the meaning of Rule 502(c) of
Regulation D or in any manner involving a public offering within the meaning of
Section 4(2) of the Securities Act or (ii) engage in any
directed selling efforts with respect to the Securities within the meaning of
Regulation S, and the Company will and will cause all such persons to comply
with the offering restrictions requirement of Regulation S with respect to the
Securities.

 

17

 

(l)                                     No
Restricted Resales.  The Company
will not, and will not permit any of its affiliates (as defined in Rule 144
under the Securities Act) to resell any of the Notes that have been reacquired
by any of them.

 

(m)                               Legended
Securities.  Each
certificate for a Note will bear the legend contained in “Notice to Investors”
in the Preliminary Offering Memorandum for the time period and upon the other
terms stated in the Preliminary Offering Memorandum.

 

The Representative on behalf of the several Initial
Purchasers, may, in its sole discretion, waive in writing the performance by
the Company or any Guarantor of any one or more of the foregoing covenants or
extend the time for their performance.

 

SECTION 4.                                Payment
of Expenses.  Each of the
Company and the Guarantors, jointly and severally, agrees to pay all of its
costs, fees and expenses incurred in connection with the performance of its
obligations hereunder and in connection with the transactions contemplated
hereby, including, without limitation, (i) all expenses incident to the
issuance and delivery of the Securities (including all printing and engraving
costs), (ii) all necessary issue, transfer and other stamp taxes in
connection with the issuance and sale of the Securities to the Initial
Purchasers, (iii) all fees and expenses of the Company’s and the
Guarantors’ counsel, independent public or certified public accountants and
other advisors, (iv) all costs and expenses incurred in connection with
the preparation, printing, filing, shipping and distribution of the Pricing
Disclosure Package and the Final Offering Memorandum (including financial
statements and exhibits), and all amendments and supplements thereto, this
Agreement, the Registration Rights Agreement, the Indenture, the DTC Agreement,
the Notes, the Guarantees, the Exchange Notes and the Security Documents, (v) all
reasonable filing fees and all reasonable attorneys’ fees and expenses incurred
by the Company, the Guarantors or the Initial Purchasers in connection with
qualifying or registering (or obtaining exemptions from the qualification or
registration of) all or any part of the Securities for offer and sale under the
securities laws of the several states of the United States, the  provinces of Canada or other jurisdictions
designated by the Initial Purchasers (including, without limitation, the cost
of preparing, printing and mailing preliminary and final blue sky or legal
investment memoranda and any related supplements to the Pricing Disclosure
Package or the Final Offering Memorandum), (vi) the respective fees and
expenses of the Trustee and the Collateral Agent, including the fees and
disbursements of counsel for the Trustee and counsel for the Collateral Agent
in connection with the Indenture, the Securities, the Exchange Securities and
the Security Documents, (vii) any fees payable in connection with the
rating of the Securities or the Exchange Securities with the ratings agencies, (viii) any
filing fees incident to, and any reasonable fees and disbursements of counsel
to the Initial Purchasers in connection with the review by the Financial
Industry Regulatory Authority (“FINRA”), if
any, of the terms of the sale of the Securities or the Exchange Securities, (ix) all
fees and expenses (including reasonable fees and expenses of counsel) of the
Company and the Guarantors in connection with approval of the Securities by the
Depositary for “book-entry” transfer, and the performance by the Company and
the Guarantors of their respective other obligations under this Agreement and (x) all
expenses incident to the “road show” for any offering of the Securities
(including any offering previously commenced and cancelled), including one half
of the cost of any chartered airplane or other transportation.  Except as provided in this Section 4 and
Sections 6, 8 and 9 hereof, the Initial Purchasers shall pay their own
expenses, including the fees and disbursements of their counsel.

 

SECTION 5.                                Conditions
of the Obligations of the Initial Purchasers.  The obligations of the several Initial
Purchasers to purchase and pay for the Securities as provided herein on the
Closing Date shall be subject to the accuracy of the representations and
warranties on the part of the Company and the Guarantors set forth in Section 1
hereof as of the date hereof and as of the Closing Date as though then 

 

18

 

made and to the timely performance by the
Company of its covenants and other obligations hereunder, and to each of the
following additional conditions:

 

(a)                                  Accountants’
Comfort Letters.  On the date
hereof, the Initial Purchasers shall have received from (i) KPMG LLP, the
former independent registered public accounting firm for the Company, (ii) Deloitte &
Touche S.p.A., the former independent registered public accounting firm for
Arcotronics Italia S.p.A., and (iii) Ernst & Young LLP, the
current independent registered public accounting firm for the Company, “comfort
letters” dated the date hereof, in each case, in form and substance
satisfactory to the Representative, covering the financial information in the
Pricing Disclosure Package and other customary matters.  In addition, on the Closing Date, the Initial
Purchasers shall have received from such accountants, “bring-down comfort
letters” dated the Closing Date, in form and substance satisfactory to the
Representative, in the form of the “comfort letters” delivered on the date hereof,
except that (i) it shall cover the financial information in the Final Offering
Memorandum and any amendment or supplement thereto and (ii) procedures
shall be brought down to a date no more than 3 Business Days prior to the
Closing Date.

 

(b)                                 No
Material Adverse Change or Ratings Agency Change.  For the period from and after the date of
this Agreement and prior to the Closing Date:

 

(i)                                     in the judgment
of the Representative there shall not have occurred any Material Adverse
Change; and

 

(ii)                                  there shall not
have occurred any downgrading, nor shall any notice have been given of any
intended or potential downgrading or of any review for a possible change that
does not indicate the direction of the possible change, in the rating accorded
the Company or any of its subsidiaries or any of their securities or
indebtedness by any “nationally recognized statistical rating organization” as
such term is defined for purposes of Rule 436 under the Securities Act.

 

(c)                                  Opinion
of Counsel for the Company.  On the Closing Date the Initial Purchasers
shall have received (i) the favorable opinions and negative assurance
letter of Kirkland & Ellis LLP, counsel for the Company, dated as of
such Closing Date, in form and substance previously agreed by the Initial
Purchasers and the Company and (ii) the favorable opinions of foreign counsel
for certain of the Guarantors in such non-U.S. jurisdictions to be reasonably
agreed by the Initial Purchasers and the Company, dated as of such Closing
Date, in form and substance reasonably satisfactory to the Initial Purchasers.

 

(d)                                 Opinion
of Counsel for the Initial Purchasers.  On the Closing Date, the Initial Purchasers
shall have received the favorable opinion and negative assurance letter of
Cahill Gordon & Reindel LLP, counsel for the Initial Purchasers, dated
as of such Closing Date, with respect to such matters as may be reasonably requested
by the Initial Purchasers.

 

(e)                                  Officers’
Certificate.  On the
Closing Date, the Initial Purchasers shall have received a written certificate
executed by the Chairman of the Board, Chief Executive Officer or President of
the Company and each Guarantor and the Chief Financial Officer or Chief Accounting
Officer of the Company and each Guarantor, dated as of the Closing Date, to the
effect set forth in Section 5(b)(ii) hereof, and further to the
effect that:

 

19

 

(i)                                     for the period
from and after the date of this Agreement and prior to the Closing Date there
has not occurred any Material Adverse Change;

 

(ii)                                  the
representations, warranties and covenants of the Company and the Guarantors set
forth in Section 1 hereof were true and correct as of the date hereof and
are true and correct as of the Closing Date with the same force and effect as
though expressly made on and as of the Closing Date; and

 

(iii)                               the Company has
complied with all the agreements and satisfied all the conditions on its part
to be performed or satisfied at or prior to the Closing Date.

 

(f)                                    Indenture;
Registration Rights Agreement.  The Company and the Guarantors shall have
executed and delivered the Indenture, in form and substance reasonably satisfactory
to the Initial Purchasers, and the Initial Purchasers shall have received
executed copies thereof.  The Company and
the Guarantors shall have executed and delivered the Registration Rights Agreement,
in form and substance reasonably satisfactory to the Initial Purchasers, and
the Initial Purchasers shall have received such executed counterparts.

 

(g)                                 Security
Documents.  The Company
and the Guarantors shall have executed and delivered each of the Security
Documents, in form and substance reasonably satisfactory to the Initial
Purchasers, and the Initial Purchasers shall have received executed copies
thereof.  The Initial Purchasers shall
have received all other certificates, agreements or instruments necessary to
perfect the Collateral Agent’s security interest in all of the Collateral to
the extent required as described in the Pricing Disclosure Package and pursuant
to the Security Documents, and each such document shall be in full force and
effect and evidence that all of the liens on the Collateral other than
Permitted Collateral Liens have been released. 
The Initial Purchasers shall also have received copies of Uniform
Commercial Code searches for the Company and each Guarantor pledging capital
stock (or its equivalent), as of a recent date listing all effective financing
statements, lien notices or comparable documents that name the Company or such
Guarantor as debtor, as the Initial Purchasers deem reasonably necessary and
appropriate.

 

(h)                                 Additional
Documents.  On or before
the Closing Date, the Initial Purchasers and counsel for the Initial Purchasers
shall have received such information, documents and opinions as they may
reasonably require for the purposes of enabling them to pass upon the issuance
and sale of the Securities as contemplated herein, or in order to evidence the
accuracy of any of the representations and warranties, or the satisfaction of
any of the conditions or agreements, herein contained.

 

If any condition specified in this Section 5 is
not satisfied when and as required to be satisfied, this Agreement may be
terminated by the Representative by notice to the Company at any time on or
prior to the Closing Date, which termination shall be without liability on the
part of any party to any other party, except that Sections 4, 6, 8 and 9
hereof shall at all times be effective and shall survive such termination.

 

SECTION 6.                                Reimbursement
of Initial Purchasers’ Expenses.  If this Agreement is terminated by the
Representative pursuant to Section 5 hereof or clause (i), (iv) or (v) of
Section 10 hereof, the Company agrees to reimburse each Initial Purchaser,
severally, upon demand for all out-of-pocket expenses that shall have been
reasonably incurred by the Initial Purchasers in connection with the proposed
purchase and the offering and sale of the Securities, including, without
limitation, reasonable and documented

 

20

 

fees and disbursements of counsel, printing
expenses, travel expenses, postage, facsimile and telephone charges.

 

SECTION 7.                                Offer,
Sale and Resale Procedures.  Each of the Initial Purchasers, on the one
hand, and the Company and each of the Guarantors, on the other hand, hereby
agree to observe the following procedures in connection with the offer and sale
of the Securities:

 

(a)                                  Offers and
sales of the Securities will be made only by the Initial Purchasers or
Affiliates thereof (including, in the case of Banc of America Securities LLC,
Merrill Lynch International) qualified to do so in the jurisdictions in which
such offers or sales are made.  Each such
offer or sale shall only be made to persons whom the offeror or seller
reasonably believes to be Qualified Institutional Buyers or non-U.S. persons
outside the United States to whom the offeror or seller reasonably believes
offers and sales of the Securities may be made in reliance upon Regulation S
upon the terms and conditions set forth in Annex I hereto, which Annex I is
hereby expressly made a part hereof.

 

(b)                                 The Securities
will be offered by approaching prospective Subsequent Purchasers on an
individual basis.  No general
solicitation or general advertising (within the meaning of Rule 502 under
the Securities Act) will be used in the United States in connection with the
offering of the Securities.

 

(c)                                  Upon original
issuance by the Company, and until such time as the same is no longer required
under the applicable requirements of the Securities Act, the Notes (and all
securities issued in exchange therefor or in substitution thereof, other than
the Exchange Securities) shall bear the following legend:

 

“THE
SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.  EACH PURCHASER OF THE SECURITY EVIDENCED
HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE
144A UNDER THE SECURITIES ACT.  THE
HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE KEMET
CORPORATION (THE “COMPANY”) THAT (I) SUCH SECURITY MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(A) INSIDE THE UNITED STATES TO
A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (B) OUTSIDE
THE UNITED STATES TO A NON-U.S. PERSON (AS DEFINED IN REGULATION S UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR RULE
904 OF REGULATION S 

 

21

 

UNDER
THE SECURITIES ACT, (C) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF APPLICABLE) OR (D) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY
IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (II) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE SECURITY EVIDENCED HEREBY OF
THE RESALE RESTRICTIONS SET FORTH IN CLAUSE (I) ABOVE.  NO REPRESENTATION CAN BE MADE AS TO THE
AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT FOR
RESALE OF THE SECURITY EVIDENCED HEREBY.”

 

Following the sale of the Securities by the Initial
Purchasers to Subsequent Purchasers pursuant to the terms hereof, the Initial
Purchasers shall not be liable or responsible to the Company for any losses,
damages or liabilities suffered or incurred by the Company, including any
losses, damages or liabilities under the Securities Act, arising from or
relating to any resale or transfer of any Security by any Subsequent Purchaser.

 

SECTION 8.                                Indemnification.

 

(a)                                  Indemnification
of the Initial Purchasers.  Each of the Company and the Guarantors,
jointly and severally, agrees to indemnify and hold harmless each Initial
Purchaser, its directors, officers and employees, and each person, if any, who
controls any Initial Purchaser within the meaning of the Securities Act and the
Exchange Act against any loss, claim, damage, liability or expense, as
incurred, to which such Initial Purchaser, director, officer, employee or
controlling person may become subject, under the Securities Act, the Exchange
Act or other federal or state statutory law or regulation, or at common law or
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of the Company), insofar as such loss, claim,
damage, liability or expense (or actions in respect thereof as contemplated
below) arises out of or is based: (i) upon any untrue statement or alleged
untrue statement of a material fact contained in the Preliminary Offering
Memorandum, the Pricing Supplement, any Company Additional Written
Communication or the Final Offering Memorandum (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; or (ii) in whole or in part
upon any inaccuracy in the representations and warranties of the Company
contained herein; or (iii) in whole or in part upon any failure of the
Company to perform its obligations hereunder or under law; and to reimburse the
Initial Purchasers and each such director, officer, employee or controlling
person for any and all reasonable expenses (including the reasonable fees and
disbursements of counsel chosen by Banc of America Securities LLC) incurred by
such Initial Purchaser or such director, officer, employee or controlling
person in connection with investigating, defending, settling, compromising or
paying any such loss, claim, damage, liability, expense or action; provided,
however, that the foregoing indemnity agreement shall not apply, with respect
to an Initial Purchaser, to any loss, claim, damage, liability or expense to
the extent, but only to the extent, arising out of or based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
reliance upon and in conformity with written information furnished to the
Company by such Initial Purchaser 

 

22

 

through the Representative
expressly for use in the Preliminary Offering Memorandum, the Pricing Supplement,
any Company Additional Written Communication or the Final Offering Memorandum
(or any amendment or supplement thereto). 
The indemnity agreement set forth in this Section 8(a) shall
be in addition to any liabilities that the Company may otherwise have.

 

(b)                                 Indemnification
of the Company and the Guarantors.  Each Initial Purchaser agrees, severally and
not jointly, to indemnify and hold harmless the Company, each Guarantor, each
of their respective directors, officers and employees and each person, if any,
who controls the Company or any Guarantor within the meaning of the Securities
Act or the Exchange Act, against any loss, claim, damage, liability or expense,
as incurred, to which the Company, any Guarantor or any such director, officer,
employee or controlling person may become subject, under the Securities Act,
the Exchange Act, or other federal or state statutory law or regulation, or at
common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of such Initial Purchaser),
insofar as such loss, claim, damage, liability or expense (or actions in
respect thereof as contemplated below) arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact contained in
the Preliminary Offering Memorandum, the Pricing Supplement, any Company
Additional Written Communication or the Final Offering Memorandum (or any
amendment or supplement thereto), or the omission or alleged omission therefrom
of a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, in each
case to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in the Preliminary
Offering Memorandum, the Pricing Supplement, any Company Additional Written
Communication or the Final Offering Memorandum (or any amendment or supplement
thereto), in reliance upon and in conformity with written information furnished
to the Company by such Initial Purchaser through the Representative expressly
for use therein; and to reimburse the Company, any Guarantor and each such
director, officer, employee or controlling person for any and all expenses
(including the fees and disbursements of counsel) as such expenses are
reasonably incurred by the Company, any Guarantor or such director, officer,
employee or controlling person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability,
expense or action.  Each of the Company
and the Guarantors hereby acknowledges that the only information that the Initial
Purchasers through the Representative have furnished to the Company expressly
for use in the Preliminary Offering Memorandum, the Pricing Supplement, any Company
Additional Written Communication or the Final Offering Memorandum (or any
amendment or supplement thereto) are the statements set forth in the third
sentence of the paragraph under the caption “Plan of Distribution—New Issue of
Notes and the first paragraph under the caption “Plan of Distribution—Short
Positions” in the Preliminary Offering Memorandum and the Final Offering
Memorandum.  The indemnity agreement set
forth in this Section 8(b) shall be in addition to any liabilities
that each Initial Purchaser may otherwise have.

 

(c)                                  Notifications
and Other Indemnification Procedures.  Promptly after
receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this Section 8,
notify the indemnifying party in writing of the commencement thereof, but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party hereunder for contribution
or otherwise than under the indemnity agreement contained in this Section 8
or to the extent it is not prejudiced (through the forfeiture of substantive
rights and defenses) as a result of such failure and shall not relieve the
indemnifying party from any liability that the indemnifying party may have to
an indemnified party otherwise than under the provisions of this Section 8
and Section 9.  In case any such action
is brought against any indemnified party and such indemnified party seeks or
intends to seek indemnity from an indemnifying party, the indemnifying party
will be entitled to participate in and, to the extent that it shall elect,
jointly with all other indemnifying parties similarly notified, by written
notice delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified

 

23

 

party, to assume the defense thereof with
counsel reasonably satisfactory to such indemnified party; provided, however,
if the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded that
a conflict may arise between the positions of the indemnifying party and the
indemnified party in conducting the defense of any such action or that there
may be legal defenses available to it and/or other indemnified parties which
are different from or additional to those available to the indemnifying party,
the indemnified party or parties shall have the right to select separate
counsel to assume such legal defenses and to otherwise participate in the
defense of such action on behalf of such indemnified party or parties.  Upon receipt of notice from the indemnifying
party to such indemnified party of such indemnifying party’s election so to
assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party
under this Section 8 for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the immediately preceding sentence (it being understood, however,
that the indemnifying party shall not be liable for the expenses of more than
one separate counsel (together with local counsel (in each jurisdiction)),
approved by the indemnifying party (Banc of America Securities LLC in the case
of Sections 8(b) and 9 hereof), representing the indemnified parties
who are parties to such action) or (ii) the indemnifying party shall not
have employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of the
action, in each of which cases the fees and expenses of counsel shall be at the
expense of the indemnifying party.

 

(d)                                 Settlements.  The indemnifying party under this Section 8
shall not be liable for any settlement of any proceeding effected without its
written consent, which will not be unreasonably withheld, but if settled with
such consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party against any loss, claim, damage,
liability or expense by reason of such settlement or judgment.  Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as
contemplated by this Section 8, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 60 days
after receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement
at least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed the indemnified party in
accordance with such request, or disputed in good faith the indemnified party’s
entitlement to such reimbursement, prior to the date of such settlement.  No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement,
compromise or consent to the entry of judgment in any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or
could have been a party and indemnity was or could have been sought hereunder
by such indemnified party, unless such settlement, compromise or consent (i) includes
an unconditional release of such indemnified party from all liability on claims
that are the subject matter of such action, suit or proceeding and (ii) does
not include any statements as to or any findings of fault, culpability or
failure to act by or on behalf of any indemnified party.

 

SECTION 9.                                Contribution.  If the indemnification provided for in Section 8
hereof is for any reason held to be unavailable to or otherwise insufficient to
hold harmless an indemnified party in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount paid or payable by such indemnified party,
as incurred, as a result of any losses, claims, damages, liabilities or
expenses referred to therein (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Guarantors, on
the one hand, and the Initial Purchasers, on the other hand, from the offering
of the Securities pursuant to this Agreement or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion

 

24

 

as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative
fault of the Company and the Guarantors, on the one hand, and the Initial
Purchasers, on the other hand, in connection with the statements or omissions
or inaccuracies in the representations and warranties herein which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations.  The
relative benefits received by the Company and the Guarantors, on the one hand,
and the Initial Purchasers, on the other hand, in connection with the offering
of the Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company, and the total discount received by the Initial Purchasers bear to
the aggregate initial offering price of the Securities.  The relative fault of the Company and the
Guarantors, on the one hand, and the Initial Purchasers, on the other hand,
shall be determined by reference to, among other things, whether any such
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact or any such inaccurate or alleged inaccurate
representation or warranty relates to information supplied by the Company and
the Guarantors, on the one hand, or the Initial Purchasers, on the other hand,
and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission or inaccuracy.

 

The amount paid or payable by a party as a result of
the losses, claims, damages, liabilities and expenses referred to above shall
be deemed to include, subject to the limitations set forth in Section 8
hereof, any legal or other reasonable fees or expenses incurred by such party
in connection with investigating or defending any action or claim.  The provisions set forth in Section 8
hereof with respect to notice of commencement of any action shall apply if a
claim for contribution is to be made under this Section 9; provided,
however, that no additional notice shall be required with respect to any action
for which notice has been given under Section 8 hereof for purposes of
indemnification.

 

The Company, the Guarantors and the Initial
Purchasers agree that it would not be just and equitable if contribution
pursuant to this Section 9 were determined by pro rata allocation (even if
the Initial Purchasers were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to in this Section 9.

 

Notwithstanding the provisions of this Section 9,
no Initial Purchaser shall be required to contribute any amount in excess of
the discount received by such Initial Purchaser in connection with the Securities
distributed by it.  No person guilty of
fraudulent misrepresentation (within the meaning of Section 11 of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. 
The Initial Purchasers’ obligations to contribute pursuant to this Section 9
are several, and not joint, in proportion to their respective commitments as
set forth opposite their names in Schedule A. 
For purposes of this Section 9, each director, officer and employee
of an Initial Purchaser and each person, if any, who controls an Initial
Purchaser within the meaning of the Securities Act and the Exchange Act shall
have the same rights to contribution as such Initial Purchaser, and each
director, officer and employee of the Company or any Guarantor, and each
person, if any, who controls the Company or any Guarantor within the meaning of
the Securities Act and the Exchange Act shall have the same rights to
contribution as the Company and the Guarantors.

 

SECTION 10.                          Termination
of this Agreement.  Prior to the
Closing Date, this Agreement may be terminated by the Representative by notice
given to the Company if at any time:  (i) trading
or quotation in any of the Company’s securities shall have been suspended or
limited by the Commission or by the OTC Bulletin Board, or trading in securities
generally on either the NASDAQ Stock Market or the New York Stock Exchange
shall have been suspended or limited, or minimum or maximum prices shall have
been generally established on any of such quotation system or stock exchange by
the Commission or FINRA; (ii) a general banking moratorium shall have been
declared by any federal, New York or Delaware

 

25

 

authorities; (iii) there shall have
occurred any outbreak or escalation of national or international hostilities or
any crisis or calamity, or any change in the United States or international
financial markets, or any substantial change or development involving a
prospective substantial change in United States’ or international political,
financial or economic conditions, as in the judgment of the Representative is
material and adverse and makes it impracticable or inadvisable to proceed with
the offering sale or delivery of the Securities in the manner and on the terms
described in the Pricing Disclosure Package or to enforce contracts for the
sale of securities; (iv) in the judgment of the Representative there shall
have occurred any Material Adverse Change; or (v) the Company shall have
sustained a loss by strike, fire, flood, earthquake, accident or other calamity
of such character as in the judgment of the Representative may interfere materially
with the conduct of the business and operations of the Company regardless of
whether or not such loss shall have been insured.  Any termination pursuant to this Section 10
shall be without liability on the part of (i) the Company or any Guarantor
to any Initial Purchaser, except that the Company and the Guarantors shall be
obligated to reimburse the expenses of the Initial Purchasers pursuant to
Sections 4 and 6 hereof, if applicable, (ii) any Initial Purchaser to
the Company, or (iii) any party hereto to any other party except that the
provisions of Sections 8 and 9 hereof shall at all times be effective and
shall survive such termination.

 

SECTION 11.                          Representations
and Indemnities to Survive Delivery.  The respective indemnities, agreements,
representations, warranties and other statements of the Company, the
Guarantors, their respective officers and the several Initial Purchasers set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Initial Purchaser,
the Company, any Guarantor or any of their partners, officers or directors or
any controlling person, as the case may be, and will survive delivery of and
payment for the Securities sold hereunder and any termination of this
Agreement.

 

SECTION 12.                          Notices.  All communications hereunder shall be in
writing and shall be mailed, hand delivered, couriered or facsimiled and confirmed
to the parties hereto as follows:

 

If to the Initial Purchasers:

 

Banc of America Securities
LLC

One Bryant Park

New York, New York 10036 

Facsimile: (212) 901-7897

Attention:  Legal Department

 

with a copy to:

Cahill Gordon &
Reindel LLP

80 Pine Street

New York, New York 10005

Facsimile: (212) 701-2169

Attention:  James J. Clark, Esq.

William J. Miller, Esq.

 

If to the Company or the Guarantors:

 

KEMET Corporation

2835 KEMET Way

 

26

 

Simpsonville, South Carolina
29681

Facsimile:  (864) 228-4161

Attention:  Chief Financial Officer

 

with a copy to:

 

Kirkland & Ellis
LLP

300 North LaSalle Street

Chicago, Illinois 60654

Facsimile:  (312) 862-2200

Attention:  H. Kurt von Moltke, P.C.

William R. Burke

 

Any party hereto may change the address or facsimile
number for receipt of communications by giving written notice to the others.

 

SECTION 13.                          Successors.  This Agreement will inure to the benefit of
and be binding upon the parties hereto, and to the benefit of the indemnified
parties referred to in Sections 8 and 9 hereof, and in each case their
respective successors, and no other person will have any right or obligation
hereunder.  The term “successors” shall
not include any Subsequent Purchaser or other purchaser of the Securities as
such from the Initial Purchasers merely by reason of such purchase.

 

SECTION 14.                          Authority
of the Representative.  Any
action by the Initial Purchasers hereunder may be taken by Banc of America
Securities LLC on behalf of the Initial Purchasers, and any such action taken
by Banc of America Securities LLC shall be binding upon the Initial Purchasers.

 

SECTION 15.                          Partial
Unenforceability.  The
invalidity or unenforceability of any section, paragraph or provision of this
Agreement shall not affect the validity or enforceability of any other section,
paragraph or provision hereof.  If any
section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.

 

SECTION 16.                          Governing
Law Provisions; Consent to Jurisdiction.

 

(a)                                  THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH
STATE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF.

 

(b)                                 Any legal suit,
action or proceeding arising out of or based upon this Agreement or the
transactions contemplated hereby (“Related Proceedings”)
may be instituted in the federal courts of the United States of America located
in the City and County of New York or the courts of the State of New York in
each case located in the City and County of New York (collectively, the “Specified Courts”), and each party irrevocably submits to
the exclusive jurisdiction (except for suits, actions, or proceedings
instituted in regard to the enforcement of a judgment of any Specified Court in
a Related Proceeding, as to which such jurisdiction is non-exclusive) of the
Specified Courts in any Related Proceeding. 
Service of any process, summons, notice or document by mail to such
party’s address set forth above shall be effective service of process for any
Related Proceeding brought in any Specified Court.  The parties irrevocably and unconditionally
waive any objection to the laying of venue of any Specified Proceeding in the
Specified Courts and irrevocably and unconditionally waive and agree not to
plead or claim in any Specified

 

27

 

Court that any Related Proceeding brought in
any Specified Court has been brought in an inconvenient forum.

 

SECTION 17.                          Default
of One or More of the Several Initial Purchasers.  If any one or more of the several Initial
Purchasers shall fail or refuse to purchase Securities that it or they have
agreed to purchase hereunder on the Closing Date, and the aggregate number of
Securities which such defaulting Initial Purchaser or Initial Purchasers agreed
but failed or refused to purchase does not exceed 10% of the aggregate number
of the Securities to be purchased on such date, the other Initial Purchasers
shall be obligated, severally, in the proportions that the number of Securities
set forth opposite their respective names on Schedule A bears to the aggregate
number of Securities set forth opposite the names of all such non-defaulting
Initial Purchasers, or in such other proportions as may be specified by the
Initial Purchasers with the consent of the non-defaulting Initial Purchasers,
to purchase the Securities which such defaulting Initial Purchaser or Initial
Purchasers agreed but failed or refused to purchase on the Closing Date.  If any one or more of the Initial Purchasers
shall fail or refuse to purchase Securities and the aggregate number of
Securities with respect to which such default occurs exceeds 10% of the
aggregate number of Securities to be purchased on the Closing Date, and
arrangements satisfactory to the Initial Purchasers and the Company for the
purchase of such Securities are not made within 48 hours after such default,
this Agreement shall terminate without liability of any party to any other
party except that the provisions of Sections 4, 6, 8 and 9 hereof shall at
all times be effective and shall survive such termination.  In any such case either the Initial
Purchasers or the Company shall have the right to postpone the Closing Date, as
the case may be, but in no event for longer than seven days in order that the
required changes, if any, to the Final Offering Memorandum or any other documents
or arrangements may be effected.

 

As used in this Agreement, the term “Initial Purchaser” shall be deemed to include any person
substituted for a defaulting Initial Purchaser under this Section 17.  Any action taken under this Section 17
shall not relieve any defaulting Initial Purchaser from liability in respect of
any default of such Initial Purchaser under this Agreement.

 

SECTION 18.                          No
Advisory or Fiduciary Responsibility.  Each of the Company and the Guarantors
acknowledges and agrees that: (i) the purchase and sale of the Securities
pursuant to this Agreement, including the determination of the offering price
of the Securities and any related discounts and commissions, is an arm’s-length
commercial transaction between the Company and the Guarantors, on the one hand,
and the several Initial Purchasers, on the other hand, and the Company and the
Guarantors are capable of evaluating and understanding and understand and
accept the terms, risks and conditions of the transactions contemplated by this
Agreement; (ii) in connection with each transaction contemplated hereby
and the process leading to such transaction each Initial Purchaser is and has
been acting solely as a principal and is not the agent or fiduciary of the
Company, the Guarantors or their respective affiliates, stockholders, creditors
or employees or any other party; (iii) no Initial Purchaser has assumed or
will assume an advisory or fiduciary responsibility in favor of the Company and
the Guarantors with respect to any of the transactions contemplated hereby or
the process leading thereto (irrespective of whether such Initial Purchaser has
advised or is currently advising the Company and the Guarantors on other
matters) or any other obligation to the Company and the Guarantors except the
obligations expressly set forth in this Agreement; (iv) the several
Initial Purchasers and their respective affiliates may be engaged in a broad
range of transactions that involve interests that differ from those of the
Company and the Guarantors and that the several Initial Purchasers have no
obligation to disclose any of such interests by virtue of any fiduciary or
advisory relationship; and (v) the Initial Purchasers have not provided
any legal, accounting, regulatory or tax advice with respect to the offering
contemplated hereby and the Company and the Guarantors have consulted their own
legal, accounting, regulatory and tax advisors to the extent they deemed appropriate.

 

28

 

This Agreement supersedes all prior agreements and
understandings (whether written or oral) between the Company, the Guarantors
and the several Initial Purchasers, or any of them, with respect to the subject
matter hereof.  The Company and the
Guarantors hereby waive and release, to the fullest extent permitted by law,
any claims that the Company and the Guarantors may have against the several
Initial Purchasers with respect to any breach or alleged breach of fiduciary
duty.

 

SECTION 19.                          General
Provisions.  This Agreement
constitutes the entire agreement of the parties to this Agreement and
supersedes all prior written or oral and all contemporaneous oral agreements,
understandings and negotiations with respect to the subject matter hereof.  This Agreement may be executed in one or more
counterparts, each one of which shall be an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument.  Delivery of an executed counterpart of a
signature page to this Agreement by telecopier, facsimile, email or other
electronic transmission (i.e., a “pdf” or “tif”) shall be effective as delivery
of a manually executed counterpart thereof. 
This Agreement may not be amended or modified unless in writing by all
of the parties hereto, and no condition herein (express or implied) may be
waived unless waived in writing by each party whom the condition is meant to
benefit.  The section headings herein are
for the convenience of the parties only and shall not affect the construction
or interpretation of this Agreement.

 

[Signature Pages Follow]

 

29

 

If the foregoing is in accordance with your
understanding of our agreement, kindly sign and return to the Company the
enclosed copies hereof, whereupon this instrument, along with all counterparts
hereof, shall become a binding agreement in accordance with its terms.

 

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  KEMET CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ William M. Lowe, Jr.

  
	
   

  	
   

  	
  Name: William M. Lowe, Jr.

  
	
   

  	
   

  	
  Title: EVP and CFO

  
	
   

  	
   

  
	
   

  	
  Guarantors:

  
	
   

  	
   

  
	
   

  	
  KEMET Electronics Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ William M. Lowe, Jr.

  
	
   

  	
   

  	
  Name: William M. Lowe, Jr.

  
	
   

  	
   

  	
  Title: EVP and CFO

  
	
   

  	
   

  
	
   

  	
  KEMET Services Corporation 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Conrado Hinojosa

  
	
   

  	
   

  	
  Name: Conrado Hinojosa

  
	
   

  	
   

  	
  Title: President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  KRC Trade Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ William M. Lowe, Jr.

  
	
   

  	
   

  	
  Name: William M. Lowe, Jr.

  
	
   

  	
   

  	
  Title: President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  The Forest Electric Company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Charles C. Meeks, Jr.

  
	
   

  	
   

  	
  Name: Charles C. Meeks, Jr.

  
	
   

  	
   

  	
  Title: President

  

 

 

The foregoing Purchase
Agreement is hereby confirmed and accepted by the Initial Purchasers as of the
date first above written.

 

BANC
OF AMERICA SECURITIES LLC

Acting on behalf of itself

and as the Representative of

the several Initial Purchasers

 

By:
Banc of America Securities LLC

 

 

	
  By:

  	
  /s/
  William Pegler

  	
   

  
	
   

  	
  Principal

  	
   

  

 

 

SCHEDULE
A

 

	
  Initial
  Purchasers

  	
   

  	
  Aggregate 

  Principal 

  Amount of

  Securities to be 

  Purchased

  	
   

  
	
  Banc of America Securities LLC

  	
   

  	
  $

  	
  161,000,000

  	
   

  
	
  KeyBanc Capital Markets Inc.

  	
   

  	
  34,500,000

  	
   

  
	
  UBS Securities LLC

  	
   

  	
  34,500,000

  	
   

  
	
  Total

  	
   

  	
  $

  	
  230,000,000

  	
   

  

 

Schedule A-1

 

ANNEX I

 

Resale Pursuant to Regulation S
or Rule 144A.  Each
Initial Purchaser understands that:

 

Such Initial Purchaser agrees that it has not
offered or sold and will not offer or sell the Securities in the United States
or to, or for the benefit or account of, a U.S. Person (other than a
distributor), in each case, as defined in Rule 902 of Regulation S (i) as
part of its distribution at any time and (ii) otherwise until 40 days
after the later of the commencement of the offering of the Securities pursuant
hereto and the Closing Date, other than in accordance with Regulation S or
another exemption from the registration requirements of the Securities
Act.  Such Initial Purchaser agrees that,
during such 40-day restricted period, it will not cause any advertisement with
respect to the Securities (including any “tombstone” advertisement) to be
published in any newspaper or periodical or posted in any public place and will
not issue any circular relating to the Securities, except such advertisements
as are permitted by and include the statements required by Regulation S.

 

Such Initial Purchaser agrees that at or prior to
confirmation of a sale of Securities by it to any distributor, dealer or person
receiving a selling concession, fee or other remuneration during the 40-day
restricted period referred to in Rule 903 of Regulation S, it will
send to such distributor, dealer or person receiving a selling concession, fee
or other remuneration a confirmation or notice to substantially the following
effect:

 

“The
Securities covered hereby have not been registered under the U.S. Securities
Act of 1933, as amended (the “Securities Act”), and may not be offered and sold
within the United States or to, or for the account or benefit of, U.S. persons (i) as
part of your distribution at any time or (ii) otherwise until 40 days
after the later of the date the Securities were first offered to persons other
than distributors in reliance upon Regulation S and the Closing Date,
except in either case in accordance with Regulation S under the Securities Act
(or in accordance with Rule 144A under the Securities Act or to accredited
investors in transactions that are exempt from the registration requirements of
the Securities Act), and in connection with any subsequent sale by you of the
Securities covered hereby in reliance on Regulation S under the Securities
Act during the period referred to above to any distributor, dealer or person
receiving a selling concession, fee or other remuneration, you must deliver a
notice to substantially the foregoing effect. 
Terms used above have the meanings assigned to them in Regulation S under
the Securities Act.”

 

Such Initial Purchaser agrees that the Securities
offered and sold in reliance on Regulation S will be represented upon
issuance by a global security that may not be exchanged for definitive
securities until the expiration of the 40-day restricted period referred to in Rule 903
of Regulation S and only upon certification of beneficial ownership of
such Securities by non-U.S. persons or U.S. persons who purchased such
Securities in transactions that were exempt from the registration requirements
of the Securities Act.

 

Annex I-1

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