Document:

Exhibit

Exhibit 10.1
AMENDMENT NO. 8 TO LOAN AND SECURITY AGREEMENT
THIS AGREEMENT NO. 8 TO LOAN AND SECURITY AGREEMENT (this “Agreement”) is made as of May 2, 2016 by and among KEMET ELECTRONICS CORPORATION, a Delaware corporation (“KEC”), KEMET FOIL MANUFACTURING, LLC, a Delaware limited liability company (“KEMET Foil”), KEMET BLUE POWDER CORPORATION, a Nevada corporation,  (“KEMET Blue”), THE FOREST ELECTRIC COMPANY ̧ an Illinois corporation (“FELCO” and, together with KEC, KEMET Foil, and KEMET Blue, each individually, a “U.S. Borrower” and, collectively, “U.S. Borrowers”), KEMET ELECTRONICS MARKETING (S) PTE LTD., a Singapore corporation (“Singapore Borrower” and, together with U.S. Borrowers, each individually, a “Borrower” and, collectively, “Borrowers”), the financial institutions party hereto as lenders (collectively, “Lenders”) and BANK OF AMERICA, N.A., a national banking association, as agent for the Lenders (“Agent”).
W I T N E S S E T H:
WHEREAS, Borrowers, Lenders and Agent have entered into a Loan and Security Agreement, dated as of September 30, 2010 (as amended, restated, renewed, extended, substituted, modified and otherwise supplemented from time to time, the “Loan Agreement”), and certain other Loan Documents (as defined in the Loan Agreement); 
WHEREAS, Borrowers have requested that Agent and Lenders agree to amend certain provisions of the Loan Agreement, and Agent and Lenders are willing to do so, subject to the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1.   DEFINITIONS. 
Capitalized terms used and not defined in this Agreement shall have the respective meanings given them in the Loan Agreement.
		
	SECTION 2.
	ACKNOWLEDGMENTS.

2.1    Acknowledgment of Obligations.  Each Borrower hereby acknowledges, confirms and agrees that as of May 2, 2016, U.S. Borrowers are jointly and severally indebted to Agent and Lenders in respect of the Revolver Loans in the principal amount of $19,881,290.73 and in respect of LC Obligations in the amount of $0, and Singapore Borrower is indebted to Agent and Lenders in respect of the Revolver Loans in the principal amount of US$14,000,000.  All such amounts, together with interest accrued and accruing thereon, and fees, costs, expenses and other charges now or hereafter payable by each Borrower to Agent and Lenders, are unconditionally owing by such Borrower to 

	
			
	4318741.1
	 
	 

Agent and Lenders in accordance with the terms of the Loan Documents, without offset, defense or counterclaim of any kind, nature or description whatsoever.
2.2    Acknowledgment of Security Interests. Each Borrower hereby acknowledges, confirms and agrees that Agent, for the benefit of Secured Parties, has and shall continue to have valid, enforceable and perfected first priority Liens, subject to Permitted Liens, upon and security interests in the Collateral of such Borrower heretofore granted to Agent, for the benefit of Secured Parties, pursuant to the Loan Documents or otherwise granted to or held by Agent, for the benefit of Secured Parties, and upon and in which Agent, for the benefit of Secured Parties, presently has perfected first priority Liens and security interests.
2.3    Binding Effect of Documents. Each Borrower hereby acknowledges, confirms and agrees that: (a) each of the Loan Documents to which it is a party has been duly executed and delivered, and each is in full force and effect as of the date hereof, (b) the agreements and obligations of such Borrower contained in the Loan Documents and in this Agreement constitute the legal, valid and binding obligations of such Borrower, enforceable against it in accordance with their respective terms, and such Borrower has no valid defense to the enforcement of such obligations, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the rights of creditors generally and to the effect of general principles of equity whether applied by a court of law or equity, and (c) Agent and Lenders are and shall be entitled to the rights, remedies and benefits provided for in the Loan Documents and applicable law.
SECTION 3.    AMENDMENTS
3.1    Exhibit A to the Loan Agreement is hereby deleted in its entirety and replaced with the new Exhibit A to the Loan Agreement set forth on Exhibit I attached hereto.
3.2    Schedule 1.1 to the Loan Agreement is hereby deleted in its entirety and replaced with the new Schedule 1.1 set forth on Exhibit II attached hereto.
3.3    Section 1.1 of the Loan Agreement is hereby amended to insert the following new defined term in the appropriate alphabetical order:
“Eighth Amendment Effective Date: May 2, 2016.”
3.4    The definition of “LIBOR” set forth Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety as follows:
“LIBOR: for any Interest Period with respect to a LIBOR Revolver Loan, the per annum rate of interest (rounded up to the nearest 1/8th of 1%) determined by Agent at or about 11:00 a.m. (London time) two (2) Business Days prior to commencement of such Interest Period, for a term equivalent to such Interest Period, equal to the London Interbank Offered Rate, or comparable or successor rate approved by Agent, as published on the applicable Reuters screen page (or other commercially available source designated by Agent from time to time); provided, that any comparable successor rate shall be applied by Agent, if administratively feasible, in a manner consistent with market practice; provided, further, that in no event shall LIBOR be less than zero.”

	
			
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SECTION 4.    AGREEMENT REGARDING INCREASE IN REVOLVER COMMITMENT.
Borrowers, Agent, and the Lenders hereby acknowledge, confirm, and agree that the increase in the Revolver Commitment on the Eighth Amendment Effective Date set forth in this Agreement (the “Eighth Amendment Increase”) shall not constitute an increase in the U.S. Revolver Commitments described in Section 2.1.8 of the Loan Agreement, and the Eighth Amendment Increase shall be made without regard to and notwithstanding the terms, conditions, and limitations set forth in Section 2.1.8 of the Loan Agreement.
SECTION 5.    REPRESENTATIONS, WARRANTIES AND COVENANTS.
Each Borrower hereby represents, warrants and covenants with and to Agent and Lenders as follows: 
5.1    Authorization.  
(a)    Each Obligor has the corporate or limited liability company power and authority to execute, deliver and perform this Agreement and, in the case of the Borrowers, to obtain the extensions and increases of credit under the Loan Agreement as amended by this Agreement (the “Amended Loan Agreement”).
(b)    No consent or authorization of, filing with, notice to or other act by, or in respect of, any Governmental Authority or any other Person is required to be obtained by the Loan Parties in connection with this Agreement, except consents, authorizations, filings, acts and notices which have been obtained, taken or made and are in full force and effect.
(c)    This Agreement has been duly executed and delivered on behalf of each Obligor that is a party hereto. This Agreement and the Amended Loan Agreement constitute the legal, valid and binding obligations of the Borrowers and the other Loan Parties and are enforceable against the Borrowers and the other Loan Parties in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.
5.2    Representations in Loan Documents. Each of the representations and warranties made by or on behalf of such Borrower to Agent and Lenders in any of the Loan Documents was true and correct in all material respects when made (except for those representations and warranties that were already qualified by concepts of materiality or by express thresholds, which representations and warranties shall be true and correct in all respects) and is true and correct in all material respects on and as of the date of this Agreement with the same full force and effect as if each of such representations and warranties had been made by or on behalf of such Borrower on the date hereof and in this Agreement (other than such representations and warranties that relate solely to a specific prior date). 
5.3    Binding Effect of Documents. This Agreement and the other Loan Documents have been duly executed and delivered to the Lender by such Borrower and are in full force and effect, as modified hereby.

	
			
	3275418.4
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5.4    No Conflict, Etc. The execution, delivery and performance of this Agreement by such Borrower will not violate or cause a default under any Applicable Law or Material Contract of such Borrower and will not result in, or require, the creation or imposition of any Lien on any of its properties or revenues, other than Permitted Liens.
5.5    No Default or Event of Default. No Default or Event of Default exists immediately prior to the execution of this Agreement and no Default or Event of Default will exist immediately after the execution of this Agreement and the other documents, instruments and agreements executed and delivered in connection herewith.
5.6    Additional Events of Default. Any misrepresentation by such Borrower, or any failure of such Borrower to comply with the covenants, conditions and agreements contained in any Loan Document, herein or in any other document, instrument or agreement at any time executed and/or delivered by such Borrower with, to or in favor of Agent and/or Lenders shall, subject to the terms and provisions of the Loan Agreement and the other Loan Documents, constitute an Event of Default hereunder, under the Loan Agreement and the other Loan Documents.  
SECTION 6.    AMENDMENT FEE.  
On the date hereof, in consideration of the amendments to the Loan Agreement requested by Borrowers and agreed to by Agent and Lenders, Borrowers shall pay to Agent an amendment fee in the amount of $12,500 (the “Amendment Fee”).  The Amendment Fee shall be fully earned, due and payable on the date hereof and shall not be subject to refund, rebate or proration for any reason whatsoever.
		
	SECTION 7.
	CONDITIONS PRECEDENT.

The effectiveness of the terms and provisions of this Agreement shall be subject to the receipt by Agent of: 
(a)    this Agreement, in form and substance satisfactory to Agent in its sole discretion, duly authorized, executed and delivered by each Borrower, Lenders and Agent; 
(b)    a Fourth Amended and Restated Revolver Note, in form and substance satisfactory to Agent in its sole discretion, duly authorized, executed and delivered by each Borrower;
(c)    the Amendment Fee; and 
(d)    such other documents, instruments and agreements as Agent in its discretion deems reasonably necessary, all in form and substance satisfactory to Agent. 
SECTION 8.    PROVISIONS OF GENERAL APPLICATION.
8.1    Effect of this Agreement. Except as modified pursuant hereto, and pursuant to the other documents, instruments and agreements executed and delivered in connection herewith, no other changes or modifications to the Loan Documents are intended or implied and in all other respects the Loan Documents are hereby specifically ratified, restated and confirmed by all parties hereto as of the effective date hereof. To the extent of conflict between the terms of this Agreement and the other Loan 

	
			
	3275418.4
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Documents, the terms of this Agreement shall control. Any Loan Document amended hereby shall be read and construed with this Agreement as one agreement.
8.2    Costs and Expenses. Borrowers absolutely and unconditionally agree to pay to Agent, on demand by Agent at any time and as often as the occasion therefor may require, whether or not all or any of the transactions contemplated by this Agreement are consummated: all reasonable fees and disbursements of any counsel to Agent in connection with the preparation, negotiation, execution, or delivery of this Agreement and any agreements delivered in connection with the transactions contemplated hereby and all reasonable out-of-pocket expenses which shall at any time be incurred or sustained by Agent or its directors, officers, employees or agents as a consequence of or in any way in connection with the preparation, negotiation, execution, or delivery of this Agreement and any agreements prepared, negotiated, executed or delivered in connection with the transactions contemplated hereby.
8.3    No Third Party Beneficiaries. The terms and provisions of this Agreement shall be for the benefit of the parties hereto and their respective successors and assigns; no other person, firm, entity or corporation shall have any right, benefit or interest under this Agreement.
8.4    Further Assurances. The parties hereto shall execute and deliver such additional documents and take such additional action as may be reasonably necessary or desirable to effectuate the provisions and purposes of this Agreement.
8.5    Binding Effect. This Agreement shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns.
8.6    Merger. This Agreement sets forth the entire agreement and understanding of the parties with respect to the matters set forth herein. This Agreement cannot be changed, modified, amended or terminated except in a writing executed by the party to be charged.
8.7    Survival of Representations and Warranties. All representations and warranties made in this Agreement or any other document furnished in connection with this Agreement shall survive the execution and delivery of this Agreement and the other documents, and no investigation by Agent or any closing shall affect the representations and warranties or the right of Agent to rely upon them.
8.8    Severability. Any provision of this Agreement held by a court of competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this Agreement.
8.9    Reviewed by Attorneys. Each Borrower represents and warrants to Agent and Lenders that it (a) understands fully the terms of this Agreement and the consequences of the execution and delivery of this Agreement, (b) has been afforded an opportunity to have this Agreement reviewed by, and to discuss this Agreement and each document executed in connection herewith with, such attorneys and other persons as such Borrower may wish, and (c) has entered into this Agreement and executed and delivered all documents in connection herewith of its own free will and accord and without threat, duress or other coercion of any kind by any Person. The parties hereto acknowledge 

	
			
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and agree that neither this Agreement nor the other documents executed pursuant hereto shall be construed more favorably in favor of one than the other based upon which party drafted the same, it being acknowledged that all parties hereto contributed substantially to the negotiation and preparation of this Agreement and the other documents executed pursuant hereto or in connection herewith.
8.10    Governing Law; Consent to Jurisdiction and Venue. 
(a)    THIS AGREEMENT, UNLESS OTHERWISE SPECIFIED, SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES (BUT GIVING EFFECT TO FEDERAL LAWS RELATING TO NATIONAL BANKS).
(b)    EACH BORROWER HEREBY CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF ANY FEDERAL OR STATE COURT SITTING IN OR WITH JURISDICTION OVER THE STATE OF NEW YORK, IN ANY PROCEEDING OR DISPUTE RELATING IN ANY WAY HERETO, AND AGREES THAT ANY SUCH PROCEEDING SHALL BE BROUGHT BY IT SOLELY IN ANY SUCH COURT. EACH BORROWER IRREVOCABLY WAIVES ALL CLAIMS, OBJECTIONS AND DEFENSES THAT IT MAY HAVE REGARDING SUCH COURT’S PERSONAL OR SUBJECT MATTER JURISDICTION, VENUE OR INCONVENIENT FORUM. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 14.3.1 OF THE LOAN AGREEMENT. Nothing herein shall limit the right of Agent or any Lender to bring proceedings against any Obligor in any other court, nor limit the right of any party to serve process in any other manner permitted by Applicable Law.  Nothing in this Agreement shall be deemed to preclude enforcement by Agent of any judgment or order obtained in any forum or jurisdiction.
8.11    Waivers. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH BORROWER WAIVES (A) THE RIGHT TO TRIAL BY JURY (WHICH AGENT AND EACH LENDER HEREBY ALSO WAIVES) IN ANY PROCEEDING OR DISPUTE OF ANY KIND RELATING IN ANY WAY HERETO; (B) PRESENTMENT, DEMAND, PROTEST, NOTICE OF PRESENTMENT, DEFAULT, NON-PAYMENT, MATURITY, RELEASE, COMPROMISE, SETTLEMENT, EXTENSION OR RENEWAL OF ANY COMMERCIAL PAPER, ACCOUNTS, DOCUMENTS, INSTRUMENTS, CHATTEL PAPER AND GUARANTIES AT ANY TIME HELD BY AGENT ON WHICH A BORROWER MAY IN ANY WAY BE LIABLE, AND HEREBY RATIFIES ANYTHING AGENT MAY DO IN THIS REGARD; (C) NOTICE PRIOR TO TAKING POSSESSION OR CONTROL OF ANY COLLATERAL; (D) ANY BOND OR SECURITY THAT MIGHT BE REQUIRED BY A COURT PRIOR TO ALLOWING AGENT TO EXERCISE ANY RIGHTS OR REMEDIES; (E) THE BENEFIT OF ALL VALUATION, APPRAISEMENT AND EXEMPTION LAWS; (F) ANY CLAIM AGAINST AGENT OR ANY LENDER, ON ANY THEORY OF LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES (AS OPPOSED TO DIRECT OR ACTUAL DAMAGES) IN ANY WAY RELATING TO ANY ENFORCEMENT ACTION, OBLIGATIONS, LOAN DOCUMENTS OR TRANSACTIONS RELATING THERETO; AND (G) NOTICE OF ACCEPTANCE HEREOF. Each Borrower 

	
			
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acknowledges that the foregoing waivers are a material inducement to Agent and Lenders entering into this Agreement and that Agent and Lenders are relying upon the foregoing in their dealings with Borrowers. Each Borrower has reviewed the foregoing waivers with its legal counsel and has knowingly and voluntarily waived its jury trial and other rights following consultation with legal counsel. In the event of litigation, this Agreement may be filed as a written consent to a trial by the court.
8.12    Counterparts. This Agreement may be executed in one or more counterparts, each of which shall constitute but one and the same Amendment. In making proof of this Agreement, it shall not be necessary to produce or account for more than one counterpart thereof signed by each of the parties hereto. Delivery of an executed counterpart of this Agreement electronically or by facsimile shall be effective as delivery of an original executed counterpart of this Agreement.

[Signature page follows]

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

KEMET ELECTRONICS CORPORATION

By: _____________________________________
Name: __________________________________
Title: ___________________________________

KEMET ELECTRONICS MARKETING (S) PTE LTD.

By: _____________________________________
Name: __________________________________
Title: ___________________________________

KEMET FOIL MANUFACTURING, LLC

By: _____________________________________
Name: __________________________________
Title: ___________________________________

KEMET BLUE POWDER CORPORATION

By: _____________________________________
Name: __________________________________
Title: ___________________________________

THE FOREST ELECTRIC COMPANY

By: _____________________________________
Name: __________________________________
Title: ___________________________________

BANK OF AMERICA, N.A.,  
 as Agent and sole Lender

By: _____________________________________
Name: __________________________________
Title: ___________________________________

EXHIBIT I
EXHIBIT A
to
LOAN AND SECURITY AGREEMENT

FOURTH AMENDED AND RESTATED REVOLVER NOTE
	
			
	May 2, 2016
	$65,000,000
	New York, New York

KEMET ELECTRONICS CORPORATION, a Delaware corporation (“KEC”), KEMET FOIL MANUFACTURING, LLC, a Delaware limited liability company (“Foil”), KEMET BLUE POWDER CORPORATION, a Nevada corporation (“KEMET Blue”), THE FOREST ELECTRIC COMPANY ̧ an Illinois corporation (“FELCO”  and, together with KEC, Foil, and KEMET Blue, each individually a “Borrower” and, collectively, “Borrowers”), for value received, hereby unconditionally promises to pay to the order of BANK OF AMERICA, N.A. (“Lender”), the principal sum of SIXTY FIVE MILLION DOLLARS ($65,000,000), or such lesser amount as may be advanced by Lender as U.S. Revolver Loans and owing as U.S. LC Obligations from time to time under the Loan Agreement described below, together with all accrued and unpaid interest thereon.  Terms are used herein as defined in the Loan and Security Agreement dated as of September 30, 2010, among Borrowers, KEMET Electronics Marketing (S) Pte Ltd., a Singapore corporation, Bank of America, N.A., as Agent, Lender, and certain other financial institutions, as such agreement may be amended, modified, renewed or extended from time to time (“Loan Agreement”).
Principal of and interest on this Fourth Amended and Restated Revolver Note (this “Note”) from time to time outstanding shall be due and payable as provided in the Loan Agreement.  This Revolver Note is issued pursuant to and evidences U.S. Revolver Loans and U.S. LC Obligations under the Loan Agreement, to which reference is made for a statement of the rights and obligations of Lender and the duties and obligations of Borrowers.  The Loan Agreement contains provisions for acceleration of the maturity of this Revolver Note upon the happening of certain stated events, and for the borrowing, prepayment and reborrowing of amounts upon specified terms and conditions.
The holder of this Note is hereby authorized by Borrowers to record on a schedule annexed to this Note (or on a supplemental schedule) the amounts owing with respect to U.S. Revolver Loans and U.S. LC Obligations, and the payment thereof.  Failure to make any notation, however, shall not affect the rights of the holder of this Note or any obligations of Borrowers hereunder or under any other Loan Documents.
Time is of the essence of this Note.  Each Borrower and all endorsers, sureties and guarantors of this Note hereby severally waive demand, presentment for payment, protest, notice of protest, notice of intention to accelerate the maturity of this Note, diligence in collecting, the bringing of any suit against any party, and any notice of or defense on account of any extensions, renewals, partial payments, or changes in any manner of or in this Note or in any of its terms, provisions and covenants, or any releases or substitutions of any security, or any delay, indulgence or other act of any trustee or any holder hereof, whether before or after maturity.  Borrowers jointly and severally agree to pay, and to save the holder of this Note harmless against, any liability for the payment of all costs and expenses (including without limitation reasonable attorneys’ fees) if this Note is collected by or through an attorney-at-law.
In no contingency or event whatsoever shall the amount paid or agreed to be paid to the holder of this Note for the use, forbearance or detention of money advanced hereunder exceed the highest lawful rate permitted under Applicable Law.  If any such excess amount is inadvertently paid by Borrowers or inadvertently received by the holder of this Note, such excess shall be returned to Borrowers or credited as a payment of principal, in accordance with the Loan Agreement.  It is the intent hereof that Borrowers not pay or contract to pay, and that holder of this Note not receive or contract to receive, directly or indirectly in any manner whatsoever, interest in excess of that which may be paid by Borrowers under Applicable Law.
This Note shall be governed by the laws of the State of New York, without giving effect to any conflict of law principles (but giving effect to federal laws relating to national banks).
This Note amends, restates, supersedes and replaces in its entirety that certain Third Amended and Restated Revolver Note dated December 19, 2014 executed by Borrowers in favor of Lender (the “Existing Note”).  This Note is being delivered in substitution for and replacement of, and not in satisfaction of, the Existing Note.  This Note is not intended to extinguish, release or otherwise discharge Borrowers’ obligations under the Existing Note and is not intended to be a novation of Borrowers’ obligations thereunder.

[Signature page follows]

IN WITNESS WHEREOF, this Note is executed as of the date set forth above.

	
		
	

	KEMET ELECTRONICS CORPORATION

By_____________________________________
     Title:

	 
	KEMET FOIL MANUFACTURING, LLC

By_____________________________________
       Title:

	 
	KEMET BLUE POWDER CORPORATION

By_____________________________________
     Title:

	
		
	 
	THE FOREST ELECTRIC COMPANY

By_____________________________________
     Title:

EXHIBIT II
Schedule 1.1

Revolver Commitments of Lenders
	
		
	

Lender
	

Revolver Commitment

	Bank of America, N.A.
	$65,000,000

	 
	 

	 
	 

	 
	 

	

	 

	
			
	3275418.4
	7Exhibit

Exhibit 10.1

MRV COMMUNICATIONS, INC.
CHANGE IN CONTROL AGREEMENT

AGREEMENT made as of the 5th day of May, 2016, by and between MRV COMMUNICATIONS, INC. (the “Company”) and Stephen G. Krulik (the “Employee”).
WHEREAS, the Company considers it essential to the best interests of its stockholders to foster the continued employment of key management personnel; and
WHEREAS, the Company has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members of the Company’s management, including the Employee, to their assigned duties without distraction;
NOW, THEREFORE, the Company and the Employee agree as follows:
1.Definitions. For the purposes of this Agreement, the following terms shall have the meanings ascribed to them below.

(a)“Cause” means (a) if there is an employment or other services agreement between the Employee and the Company or a subsidiary that defines the term "cause" (or a term of like import), the Employee’s engaging in conduct that constitutes "cause" (or a term of like import) within the meaning of that agreement, or (b) if there is no employment or other services agreement between the Employee and the Company or a subsidiary that defines the term "cause" (or a term of like import), (1) the Employee’s repeated failure (other than temporarily while physically or mentally incapacitated) or refusal to perform the duties of his or her employment or other service if such failure or refusal shall not have ceased or been remedied within fifteen days following written warning from the Company or a subsidiary; (2) the Employee’s conviction of or plea of no contest to a felony; (3) the Employee’s breach of a fiduciary trust (including, without limitation, misappropriation of funds, material misrepresentation (other than as a result of a good faith mistake) of the Company's financial performance, operating results or financial condition to the Board or any officer, use of the Company's or a subsidiary's assets to pursue other interests, or diversion of any business opportunity belonging to the Company or a subsidiary to or for the benefit of the Employee or a third party); (4) material unauthorized disclosure by the Employee to any person of any confidential information or trade secrets of the Company or any of its subsidiaries; (5) the Employee’s engaging in conduct or activities materially damaging to the property, business or reputation of the Company or a subsidiary or to the ability of the Employee to perform the duties of his or her employment or other services; (6) any act or omission by the Employee involving gross malfeasance or gross negligence in the performance of the Employee’s duties to the material detriment of the Company or a subsidiary; or (7) the Employee’s failure to comply in all material respects with the policies of the Company or a subsidiary or with any non-competition, non-solicitation or other restrictive covenants made by the Employee to the Company or a subsidiary; in each of such cases as determined by the Board or the Compensation Committee acting in its good faith discretion.

(b)“Change in Control” means any of the following events:

(i)the acquisition by any "person" as such term is used in Sections 13(d) and 14(d) of the Exchange Act (other than (i) a subsidiary of the Company, (ii) any trustee or other fiduciary holding securities under any employee benefit plan of the Company, or (iii) any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company) of beneficial ownership (within the meaning of Rule l3d-3 under the Exchange Act), of securities of the Company representing more than 50% of the combined voting power of the Company's then outstanding securities, other than an acquisition directly from the Company; or

(ii)the consummation of a merger, consolidation or other form of reorganization involving the Company unless all or substantially all of the persons who were the beneficial owners of the voting securities of the Company immediately prior to such merger, consolidation or reorganization beneficially own more than 50% of the combined voting power of the securities of the Company (or the surviving entity or any parent thereof, as the case may be) that are outstanding immediately after such merger, consolidation or reorganization in substantially the same proportion as their ownership of the voting securities of the Company immediately prior to such merger, consolidation or reorganization; or

(iii)the consummation of a complete liquidation or dissolution of the Company, or of a sale or disposition of all or substantially all of the Company's assets (whether in one transaction or a series of related transactions), unless all or substantially all of the persons who were the beneficial owners of the voting securities of the Company immediately prior to such sale or disposition beneficially own more than 50% of the combined voting power of the securities of the person or entity that acquires such assets that are outstanding immediately after such sale or disposition.

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because fifty percent (50%) or more of the then outstanding Voting Securities is acquired by (1) a trustee or other fiduciary holding securities under one or more employee benefit plans maintained by the Company or any of its subsidiaries, (2) any corporation which, immediately prior to such acquisition, is owned directly or indirectly by the stockholders of the Company in the same proportion as their ownership of stock in the Company immediately prior to such acquisition, or (3) any Person who, as of the date hereof, owns more than 25% of the outstanding Voting Securities.
(c)“Company” means MRV Communications, Inc. and any direct or indirect successor to the business of the Company.
 
(d)“Good Reason” means, without the written consent of the Executive:

(i) a material diminution in Employee’s duties or responsibilities; 

(ii)any reduction in the Employee’s annual base salary in effect immediately prior to the Change in Control; or 

(iii)the Company's requiring the Employee to be based at any office or location more than fifty (50) miles from the office where the Employee was employed immediately prior to the Change in Control.

Notwithstanding the foregoing, the Employee will not have “Good Reason” to terminate his employment merely because the Employee is no longer an Employee of a public company and/or has a change in title, duties, authority, responsibilities or reporting structure as a result of the Change in Control transaction (including having a reporting relationship within a larger company). In order to terminate employment for Good Reason, the Employee must, within 90 days after the occurrence of the event or condition giving rise to Good Reason, furnish written notice to the Company indicating Employee’s intention to terminate employment for Good Reason and describing the act(s) and/or omission(s) that the Employee deems to constitute Good Reason. The Company shall have 30 days after receipt of such notice to review and correct the situation (and thus prevent Employee’s termination for Good Reason) and, if the Company fails to do so, the Employee will then have 30 days within which to terminate for Good Reason. 

(e)“Severance Event” means a termination of the Employee’s employment with the Company and its subsidiaries (1) by the Company without Cause, or (2) by the Employee for Good Reason, in either case occurring within twelve (12) months following the date of a Change in Control.

2.Change in Control Severance Protection. If a Severance Event occurs, then the Employee will be entitled to receive any accrued and unpaid compensation, consisting of the unpaid amount, if any, of Employee’s previously earned base salary; the unpaid amount, if any, of a bonus earned by the Employee for the preceding year; and any vested payments and benefits accrued by the Employee under and in accordance with the terms of any employee plan in which the Employee was a participant. In addition, subject to the provisions hereof, including, as applicable, the release and other conditions set forth in Section 4 and the non-duplication provisions of Section 6, the Employee will be entitled to receive the following payments and benefits:

(a)a single sum cash payment equal to nine months of Employee’s base salary as of the date that Employee’s employment with the Company ceases; and

(b)if the Employee (and/or the Employee’s covered spouse and/or dependents) timely elects COBRA group health plan continuation coverage, the Company will pay the full amount of the premiums for the number of months of salary comprising the severance payment described in Section 2(a) above, but in no event later than the date the Employee becomes eligible to receive corresponding coverage under a new employer’s group health plan. 

3.Equity Awards. If a Change in Control occurs, then all outstanding stock option, restricted stock and other equity compensation awards will be subject to the vesting and other terms and provisions of the applicable award agreement and Company plan. 

4.Release of Claims and Other Conditions; Timing of Payments. The Employee’s right to receive and retain any severance payments or benefits pursuant to Section 2 may be conditioned upon the Employee’s delivery to the Company of a signed release of claims (substantially in the form attached hereto as Exhibit A) within 60 days after the date of the Severance Event and the Employee’s not revoking such release. If the Company decides to impose the release condition, it must furnish written notification of its decision to the Employee within five days after the date of the Severance Event. Severance payments and benefits that are subject to a release condition under this paragraph will be made on the day following the date on which the release condition is satisfied, provided that, if the 60-day period during which the release condition may be satisfied straddles two calendar years, payment will be made on the later of the date on which the release condition is satisfied and January 2 of the calendar year following the calendar year in which the Severance Event occurs. On the deferred payment date, the Employee will receive a catch-up payment equal to the aggregate amount that otherwise would have been received by such date if there had been no deferral. If the Company does not provide the written release notice to the Employee within five days after the date of the Severance Event, then the severance amounts payable to the Employee under Section 2 shall be made or begin within ten business days after the date of the Severance Event. Notwithstanding the foregoing, (i) if the release condition is timely invoked by the Company and not satisfied by the Employee, the Company will be entitled to recoup the amount of any premiums it may have paid for group health continuation coverage under Section 2(b); and (ii) the Employee will not be entitled to payments or benefits described in Section 2 if, at any time from the date hereof until the date of the Change in Control, the Employee fails to use Employee’s best efforts to perform the duties and responsibilities of the Employee’s employment with the Company (including participating positively and constructively with respect to the discussions, negotiation of and process leading up to a possible Change in Control), all to the reasonable satisfaction of the Board. 

5.Golden Parachute Tax Limitation. If, when combined with the payments and benefits the Employee is entitled to receive under any other agreement, plan, program or arrangement of the Company, the Employee would be subject to excise tax under Section 4999 of the Code or the Company would be denied a deduction under Section 280G of the Code, then the severance amounts otherwise payable to the Employee under this Agreement will be reduced by the minimum amount necessary to ensure that the Employee will not be subject to such excise tax and the Company’s deduction will not be so denied. 

6.Effect of Other Agreements. Notwithstanding the any other provision hereof, if the Employee is entitled to receive separation payments or benefits pursuant to another agreement with the Company or an affiliate or pursuant to applicable law, then the separation payments and benefits otherwise payable to the Employee under Section 2 of this Agreement shall be reduced by any corresponding payments and benefits that the Employee receives or will receive pursuant to such other agreement or applicable law, in order to avoid duplication.

7.Not a Contract of Employment.  This Agreement shall not be deemed to constitute a contract of employment between the Employee and the Company.  Unless the Employee is employed pursuant to an employment agreement for a specified period of time, the Employee is employed on an at-will basis.  Nothing contained herein shall be deemed to give the Employee a right to be retained in the employ or other service of the Company or to interfere with the right of the Company to terminate the Employee’s employment at any time.

8.Governing Law. This Agreement shall be governed by the laws of the state of New York, excluding its conflict of law rules.

9.Counterparts. This Agreement may be executed in separate counterparts, each of which will be an original and all of which taken together shall constitute one and the same agreement, and any party hereto may execute this Agreement by signing any such counterpart.

10.Tax Withholding; Section 409A Compliance. 

(a)Withholding. The payment of any amount pursuant to this Agreement shall be subject to all applicable tax withholding. 

(b)Section 409A. It is intended that any amounts payable to the Employee under this Agreement will be exempt from the provisions of Section 409A of the Internal Revenue Code of 1986 and the regulations issued thereunder (“Section 409A”). Nevertheless, if and to the extent that a payment under the Agreement is deemed to be subject to Section 409A (a “Covered Payment”), then, for the purposes of the Agreement and Section 409A:

(i)Each Covered Payment will be treated as a separate payment under Section 409A.

(ii)The term “termination of employment” or words of like import shall be deemed to mean a “separation from service” within the meaning of Section 409A.

(iii)If the Employee is treated as a “specified employee” within the meaning of Section 409A at the time of the termination of the Employee’s employment, then any Covered Payment that would otherwise be due within six months after such termination of employment will be delayed until the first business day of the seventh month following the date of termination or, if earlier, the date of the Employee’s death, to the extent such delay is required by Section 409A. On the delayed payment date, the Employee (or, if applicable, the deceased Employee’s estate) will receive a catch-up payment equal to the aggregate amount of the Covered Payments that were delayed pursuant to the preceding sentence. 

(iv)Notwithstanding the foregoing, the Employee shall be solely responsible for, and the Company shall have no liability for or with respect to any taxes, acceleration of taxes, interest or penalties arising under Section 409A. 

11.Entire Agreement. This Agreement contains the entire understanding between the parties hereto with respect to the subject matter hereof and supersedes any prior and/or contemporaneous understandings, agreements or representations, written or oral, relating to the subject matter hereof. This Agreement may be amended only by a written instrument signed by both parties.

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

	
					
	 
	 
	 
	 
	 

	MRV COMMUNICATIONS, INC.
	 
	EMPLOYEE

	 
	 
	 
	 
	 

	By:
	/s/ Mark J. Bonney
	 
	By:
	/s/ Stephen G. Krulik

	Name:
	Mark J. Bonney
	 
	 
	Stephen G. Krulik

	Title:
	Chief Executive Officer
	 
	 
	 

EXHIBIT A
RELEASE AGREEMENT

This Release Agreement (“Agreement”) is made as of • by and between • (“Employee”) and MRV COMMUNICATIONS, INC. (the “Company”). Capitalized terms used but not defined herein shall have the meanings ascribed to them by the Change in Control Agreement made by and between the Company and the Employee as of the 5th day of May, 2016 (the “Change in Control Agreement”).
1.    This will confirm that a Severance Event has occurred. In accordance with the Change in Control Agreement, the Company has timely notified the Employee that the Employee’s right to receive and retain certain severance payments and benefits under Section 2 of the Change in Control Agreement is conditioned upon the timely receipt by the Company of a release by the Employee which is no longer subject to revocation. Accordingly, in consideration of the severance payments and benefits under the Change in Control Agreement and other good and valuable consideration, Employee for himself/herself and for the executors and administrators of the Employee’s estate, and the Employee’s heirs, successors and assigns, hereby releases and forever discharges the Company and its officers, directors, employees and stockholders (the “Released Parties”) from any and all claims, actions, causes of action, suits, sums of money, debts, dues, accounts, reckonings, bonds, bills, covenants, contracts, controversies, agreements, promises, demands or damages of any nature whatsoever or by reason of any matter, cause or thing regardless of whether known or unknown at present, which against the Company or any of its officers, directors, employees or stockholders Employee ever had, now has or may have arising out of or relating to the Employee’s employment with the Company or the termination of such employment occurring or existing at any time prior to and including the date of this Release (collectively defined herein as “Claims”). This Release includes, but is not limited to, all Claims the Employee might have under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. §§2000e, et. seq.; 42 U.S.C. §§1981, et. seq.; the Americans with Disabilities Act, 29 U.S.C. §§2000e, et. seq.; the Age Discrimination in Employment Act; the Older Workers Benefits Protection Act; the federal Family and Medical Leave Act; Section 451 et. seq.; similar state or other laws that may be applicable, and any and all statutory and common law causes of action for defamation; slander; slander per se; defamation per se; false light; tortious interference with prospective business relationships; assault; sexual assault; battery; sexual harassment; sexual discrimination; hostile work environment; discrimination; retaliation; workers’ compensation retaliation; wrongful termination; intentional infliction of emotional distress; breach of a duty or obligation of any kind or description, including any implied covenant of good faith and fair dealing; and for breach of contract or any tort whatsoever, as well as any expenses or attorney’s fees associated with such Claims. The parties acknowledge that this Release does not either affect the rights and responsibilities of the Equal Employment Opportunity Commission to enforce the Age Discrimination in Employment Act, or justify interfering with the protected right of an employee to file a charge or participate in an investigation or proceeding conducted by the Equal Employment Opportunity Commission under the Age Discrimination in Employment Act. In the event the Equal Employment Opportunity Commission commences a proceeding against the Company in which Employee is a named party, the Employee agrees to waive and forego any monetary claims which may be alleged by the Equal Employment Opportunity Commission to be owed to Executive. Notwithstanding the foregoing, nothing in the provisions of this Release shall act as a release by the Employee of any Claims against the Company with respect to (i) any amounts or benefits to which the Employee may become entitled to receive under the Change in Control Agreement, (ii) any right the Employee may have to indemnification under the terms of the Change in Control Agreement or under the terms of any other applicable indemnification agreement, the organizational documents of the Company, the terms of any insurance policy, the terms of any Company indemnification policy, the terms of applicable law or otherwise, (iii) the Employee’s rights under and in accordance with the terms of any employee benefit plan in which Employee participates, and (iii) any Claims arising with respect to acts, events or occurrences taking place after the date of this Release. 
2.    EMPLOYEE UNDERSTANDS THAT THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.  [In giving this release, which includes claims which may be unknown to Employee at present, Employee acknowledges that he has read and understands Section 1542 of the California Civil Code, which states:  “A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.”]  Employee hereby expressly waives and relinquishes all rights and benefits under that section and any law of any jurisdiction of similar effect with respect to Employee’s release of any unknown or unsuspected claims Employee may have against the Released Parties.

3.    Employee has been advised to consult with an attorney prior to executing this Agreement.  By executing this Agreement, Employee acknowledges that (a) Employee has been provided with an opportunity to consult with an attorney or other advisor of his/her choice regarding the terms of this Agreement, (b) this is a final offer and Employee has been given [21 or 45, as applicable] days in which to consider whether Employee wishes to enter into this Agreement, (c) Employee has elected to enter into this Agreement knowingly and voluntarily and (d) if Employee does so within fewer than [21]/[45] days from receipt of the final document the Employee has knowingly and voluntarily waived the remaining time.  This Agreement shall be fully effective and binding upon all parties hereto immediately upon execution of this Agreement except as to rights or claims arising under the ADEA, in which case Employee has 7 days following execution of this Agreement to change his/her mind.
	
					
	 
	 
	 
	 
	 

	MRV COMMUNICATIONS, INC.
	 
	EMPLOYEE

	 
	 
	 
	 
	 

	By:
	 
	 
	By:
	 

	 
	 
	 
	 
	 

	Title:

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