Document:

Exhibit 10.1

 

	
 
    	

    	
 
    	
PLAINS

ALL   AMERICAN
    

 

February 21, 2013

 

«First» «MI» «Last»

«Address1»

«City» «State» «Zip»

 

Re:                             Grant of Phantom Units

 

Dear «First»:

 

I am pleased to inform you that you have been granted «Units» Phantom Units as of the above date pursuant to the Company’s Long-Term Incentive Plan (the “Plan”).  In addition, in tandem with each Phantom Unit you have been granted a distribution equivalent right (a “DER”). A DER represents the right to receive a cash payment equivalent to the amount, if any, paid in cash distributions on one Common Unit of Plains All American Pipeline, L.P. (“PAA” or the “Partnership”) to the holder of such Common Unit.  The terms and conditions of this grant are as set forth below.

 

1.              Subject to the further provisions of this Agreement, your Phantom Units shall vest (become payable in the form of one Common Unit of PAA for each Phantom Unit) as follows: (i) one-third shall vest upon the later to occur of the August 2016 Distribution Date and the date on which the Partnership pays an annualized quarterly distribution of at least $2.35 per unit, (ii) one-third shall vest upon the later to occur of the August 2017 Distribution Date and the date on which the Partnership pays an annualized quarterly distribution of at least $2.50 per unit, and (iii) one-third shall vest upon the later to occur of the August 2018 Distribution Date and the date on which the Partnership pays an annualized quarterly distribution of at least $2.65 per unit.  Any remaining Phantom Units that are not vested by the August 2019 Distribution Date, and any tandem DERs (regardless of vesting) associated with such Phantom Units, shall expire on such date.

 

2.              Subject to the further provisions of this Agreement, your DERs shall vest (become payable in cash) as follows: (i) one-third shall vest upon and effective with the date on which the Partnership pays an annualized quarterly distribution of at least $2.35 per unit, (ii) one-third shall vest upon and effective with date on which the Partnership pays an annualized quarterly distribution of at least $2.50 per unit, and (iii) one-third shall vest upon and effective with the date on which the Partnership pays an annualized quarterly distribution of at least $2.65 per unit.

 

3.                    Your DERs shall not accrue payments prior to vesting.

 

4.                    The number of Phantom Units subject to this award and any distribution level required for vesting under paragraphs 1 or 2 above shall be proportionately reduced

 

 

or increased for any split or reverse split, respectively, of the Units, or any event or transaction having similar effect.

 

5.                    Upon vesting of any Phantom Units, an equivalent number of DERs will expire.  Any such DERs that are vested prior to, or that would vest as of, the Distribution Date on which the Phantom Units vest, shall be payable on such Distribution Date prior to their expiration.

 

6.                    In the event of the termination of your employment with the Company and its Affiliates (other than in connection with a Change in Status or by reason of your death or “disability,” as defined in paragraph 7 below), all of your then outstanding DERs (regardless of vesting) and Phantom Units shall automatically be forfeited as of the date of termination; provided, however, that if the Company or its Affiliates terminate your employment other than as a result of a Termination for Cause: (i) any unvested Phantom Units that have satisfied all vesting criteria as of the date of termination but for the passage of time shall be deemed nonforfeitable on the date of termination, and shall vest on the next following Distribution Date; (ii) any DERs associated with the unvested, nonforfeitable Phantom Units described in clause (i) shall not be forfeited on the date of termination, but shall be payable and shall expire in accordance with paragraph 5 above; and (iii) any unvested Phantom Units that have satisfied none of the vesting criteria as of the date of termination, and any tandem DERs (regardless of vesting) associated with such Phantom Units, shall automatically be forfeited as of the date of termination.

 

7.                    In the event of termination of your employment with the Company and its Affiliates by reason of your death or your “disability” (a physical or mental infirmity that impairs your ability substantially to perform your duties for a period of eighteen months or that the Company otherwise determines constitutes a “disability”), your then outstanding Phantom Units and tandem DERs shall not be forfeited on such date, and (i) such DERs shall vest in accordance with paragraph 2 above and expire in accordance with paragraph 1 or paragraph 5 above, as applicable, and  (ii) such Phantom Units shall vest or expire in accordance with paragraph 1 above; provided, however, that such vesting of Phantom Units shall occur either (x) on the date the Partnership pays the quarterly distribution specified in clause (i), (ii) or (iii) of paragraph 1 (and in the proportion indicated therein) without regard to any requirement for further passage of time or (y) if the relevant quarterly distribution has been paid prior to the date of termination, on the next following Distribution Date.  As soon as administratively practicable after the vesting of any Phantom Units pursuant to this paragraph 7, payment will be made in cash in an amount equal to the Market Value of the number of Phantom Units vesting.

 

8.                    In the event of a Change in Status, all of your then outstanding Phantom Units and tandem DERs shall be deemed 100% nonforfeitable on such date, and such Phantom Units shall vest in full upon the next Distribution Date.

 

2

 

9.                    Upon payment pursuant to a DER, you agree that the Company may withhold any taxes due from your compensation as required by law.  Upon vesting of a Phantom Unit, you agree that the Company may withhold any taxes due from your compensation as required by law, which (in the sole discretion of the Company) may include withholding a number of Common Units otherwise payable to you.

 

As used herein, (i) the “Company” refers to Plains All American GP LLC; (ii) “Distribution Date” means the day in February, May, August or November in any year (as context dictates) that is 45 days after the end of the most recently completed calendar quarter (or, if not a business day, the closest previous business day); and (iii) “Market Value” means the average of the closing sales prices for a Common Unit on the New York Stock Exchange for the five trading days preceding the then most recent “ex dividend” date for payment of a distribution by the Partnership.

 

The phrase “Change in Status” means (A) the termination of your employment by the Company other than a Termination for Cause, within two and a half months prior to or one year following a Change of Control (the “Protected Period”), or (B) the termination of your employment by you due to the occurrence during the Protected Period, without your written consent, of (i) any material diminution in your authority, duties or responsibilities, (ii) any material reduction in your base salary or (iii) any other action or inaction that constitutes a material breach of this Agreement by the Company.  A termination by you shall not be a Change in Status unless (1) you provide written notice to the Company of the condition in (B)(i)(ii) or (iii) that would constitute a Change in Status within 90 days of the initial existence of the condition and (2) the Company fails to remedy the condition within the 30-day period following such notice.

 

The phrase “Change of Control” means, and shall be deemed to have occurred upon the occurrence of, one or more of the following events:  (i) the Company ceasing to retain direct or indirect control of the general partner of the Partnership; (ii) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Partnership or the Company to any Person and/or its Affiliates, other than to the Partnership or the Company, including any employee benefit plan thereof; (iii) a consolidation, reorganization, merger or any other similar transaction involving (a) a Person other than the Partnership or the Company and (b) the Partnership, the Company or both; (iv) the Persons who own membership interests in the Company on the date hereof cease to beneficially own, directly or indirectly, more than 50% of the membership interest in the Company; or (v) any Person, including any partnership, limited partnership, syndicate or other group deemed a “person” for purposes of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended, becoming after the date hereof the beneficial owner, directly or indirectly, of more than 49.9% of the membership interest in the Company.  Notwithstanding the foregoing, no Change of Control shall be deemed to have occurred in connection with a restructuring or reorganization related to a securitization and sale to the public of direct or indirect equity interests in the general partner if (x) the Company retains direct or indirect control over the general partner and (y) the Persons

 

3

 

who own membership interests in the Company on the date hereof continue to beneficially own, directly or indirectly, more than 50% of the membership interest in the Company.

 

The phrase “Termination for Cause” shall mean severance of your employment with the Company or its Affiliates based on your (i) failure to perform the duties and responsibilities of your position at an acceptable level as reasonably determined in good faith by the CEO of the Company, or (ii) violation of the Company’s Code of Business Conduct (unless waived in accordance with the terms thereof), in each case, with the specific failure or violation described to you in writing.

 

Terms used herein that are not defined herein shall have the meanings set forth in the Plan or, if not defined in the Plan, in the Fourth Amended and Restated Agreement of Limited Partnership of Plains All American Pipeline, L.P., as amended (the “Partnership Agreement”).

 

This award is intended to either (i) qualify as a “short-term deferral” under Section 409A of the Internal Revenue Code of 1986, as amended, or (ii) comply with the provisions of Section 409A.  If it is determined that any payments or benefits to be made or provided under this Agreement do not comply with Section 409A, the parties agree to amend this Agreement or take such other actions as reasonably necessary or appropriate to comply with Section 409A while preserving the economic agreement of the parties.

 

By signing below, you agree that the Phantom Units and DERs granted hereunder are governed by the terms of the Plan.  Copies of the Plan and the Partnership Agreement are available upon request.

 

4

 

In order for this grant to be effective you must designate a beneficiary that will be entitled to receive any benefits payable under this grant in the event of your death.  Unless you indicate otherwise by checking the appropriate box the named beneficiaries on this form will serve as your beneficiaries for all previous LTIP grants.  Please execute and return a copy of this grant letter to me and retain a copy for your records

 

	
 
    	
PLAINS ALL AMERICAN PIPELINE, L.P.
    
	
 
    	
 
    
	
 
    	
By: PAA GP LLC
    
	
 
    	
By: PLAINS AAP, L.P.
    
	
 
    	
By: PLAINS ALL AMERICAN GP LLC
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
Richard   McGee
    
	
 
    	
Title:
    	
Executive   Vice President & General Counsel
    

 

Beneficiary Designation

 

	
Primary Beneficiary Name
    	
 
    	
Relationship
    	
 
    	
Percent (Must total 100%)
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

	
Secondary Beneficiary Name
    	
 
    	
Relationship
    	
 
    	
Percent (Must total 100%)
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

o Check this box only if designation does not apply to prior grants

 

 

	
«First» «MI» «Last»
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Units:
    	
«Units»
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Dated:
    	
 
    	
 
    	
 
    

 

5Exhibit 10.1

 

Conformed Copy

 

 

 

Development and Cross-Licensing Agreement

 

between

 

NEC TOKIN Corporation

 

and

 

KEMET Electronics Corporation

 

 

 

 

	
1.
    	
Definitions
    	
 
    	
5
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
1.1.
    	
“Agreement”
    	
 
    	
5
    
	
 
    	
1.2.
    	
“Capacitor”
    	
 
    	
5
    
	
 
    	
1.3.
    	
“Collaborative   Development”
    	
 
    	
5
    
	
 
    	
1.4.
    	
“Development Inventions”
    	
 
    	
5
    
	
 
    	
1.5.
    	
“Development Know-How”
    	
 
    	
5
    
	
 
    	
1.6.
    	
“Documentation”
    	
 
    	
5
    
	
 
    	
1.7.
    	
“Effective Date”
    	
 
    	
6
    
	
 
    	
1.8.
    	
“Joint Development   Inventions”
    	
 
    	
6
    
	
 
    	
1.9.
    	
“Joint Development   Know-How”
    	
 
    	
6
    
	
 
    	
1.10.
    	
“KEMET Development   Inventions”
    	
 
    	
6
    
	
 
    	
1.11.
    	
“KEMET Development IPR”
    	
 
    	
6
    
	
 
    	
1.12.
    	
“KEMET Development   Know-How”
    	
 
    	
6
    
	
 
    	
1.13.
    	
“KEMET Tantalum Supply   Chain”
    	
 
    	
6
    
	
 
    	
1.14.
    	
“Licensed Valve Metal   Capacitor Products and Components”
    	
 
    	
6
    
	
 
    	
1.15.
    	
“Licensed Technology”
    	
 
    	
6
    
	
 
    	
1.16.
    	
“Licensee”
    	
 
    	
6
    
	
 
    	
1.17.
    	
“Licensor”
    	
 
    	
6
    
	
 
    	
1.18.
    	
“Other Development and   Production Rights”
    	
 
    	
6
    
	
 
    	
1.19.
    	
“Party” or “Parties”
    	
 
    	
7
    
	
 
    	
1.20.
    	
“Patent Rights”
    	
 
    	
7
    
	
 
    	
1.21.
    	
“Person”
    	
 
    	
7
    
	
 
    	
1.22.
    	
“Prior Agreements”
    	
 
    	
7
    
	
 
    	
1.23.
    	
“Relevant KEMET   Intellectual Property Rights”
    	
 
    	
7
    
	
 
    	
1.24.
    	
“Relevant KEMET   Technology”
    	
 
    	
7
    
	
 
    	
1.25.
    	
“Relevant TOKIN   Intellectual Property Rights”
    	
 
    	
7
    
	
 
    	
1.26.
    	
“Relevant TOKIN   Technology”
    	
 
    	
8
    
	
 
    	
1.27.
    	
“Rights under Copyright”
    	
 
    	
8
    
	
 
    	
1.28.
    	
“Subsidiary”
    	
 
    	
8
    
	
 
    	
1.29.
    	
“Technical Steering   Committee”
    	
 
    	
8
    
	
 
    	
1.30.
    	
“Term”
    	
 
    	
8
    
	
 
    	
1.31.
    	
“Third Party”
    	
 
    	
8
    
	
 
    	
1.32.
    	
“TOKIN Development   Inventions”
    	
 
    	
8
    
	
 
    	
1.33.
    	
“TOKIN Development IPR”
    	
 
    	
8
    
	
 
    	
1.34.
    	
“TOKIN Development   Know-How”
    	
 
    	
8
    
	
 
    	
1.35.
    	
“Trade Secret Rights”
    	
 
    	
8
    
	
 
    	
1.36.
    	
“Valve Metal”
    	
 
    	
9
    
	
 
    	
1.37.
    	
“Valve Metal Capacitor   Components”
    	
 
    	
9
    
	
 
    	
1.38.
    	
“Valve Metal Capacitor   Product”
    	
 
    	
9
    
	
 
    	
1.39.
    	
“Valve Metal Capacitor   Products and Components”
    	
 
    	
9
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
2.
    	
Technical Steering   Committee
    	
 
    	
9
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.1.
    	
Formation of Technical   Steering Committee
    	
 
    	
9
    
	
 
    	
2.2.
    	
Composition
    	
 
    	
9
    
	
 
    	
2.3.
    	
Meetings
    	
 
    	
10
    
	
 
    	
2.4.
    	
Decision-Making
    	
 
    	
10
    
	
 
    	
2.5.
    	
Functions
    	
 
    	
10
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
3.
    	
Delivery of Licensed   Technology
    	
 
    	
10
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
3.1.
    	
Initial Delivery
    	
 
    	
10
    
	
 
    	
3.2.
    	
Subsequent Deliveries
    	
 
    	
10
    
	
 
    	
3.3.
    	
No Disclosure Of Third Party Confidential   Information
    	
 
    	
10
    
	
 
    	
3.4.
    	
No Breach of Existing Contractual   Obligations
    	
 
    	
10
    

 

2

 

	
4.
    	
Supply Chain Access
    	
 
    	
10
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.1.
    	
Development of Supply   Chain
    	
 
    	
10
    
	
 
    	
4.2.
    	
Access
    	
 
    	
11
    
	
 
    	
4.3.
    	
No Resale Rights
    	
 
    	
11
    
	
 
    	
4.4.
    	
No Obligations
    	
 
    	
11
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
5.
    	
Collaborative Development
    	
 
    	
11
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
6.
    	
Collaborative Development   Contributions by Subsidiaries
    	
 
    	
11
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
7.
    	
Ownership Rights Arising   from Collaborative Development
    	
 
    	
11
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
7.1.
    	
Ownership of Development   Inventions
    	
 
    	
11
    
	
 
    	
7.2.
    	
Ownership of Development Know-How
    	
 
    	
12
    
	
 
    	
7.3.
    	
Disclosure
    	
 
    	
12
    
	
 
    	
7.4.
    	
Developments Outside Field of Valve Metal   Capacitor Products and Components
    	
 
    	
12
    
	
 
    	
7.5.
    	
Assistance
    	
 
    	
12
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
8.
    	
Patent Prosecution and   Maintenance
    	
 
    	
12
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.1.
    	
Infringement Actions
    	
 
    	
12
    
	
 
    	
8.2.
    	
Enforcement Control
    	
 
    	
13
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
9.
    	
Grant of Rights
    	
 
    	
13
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
9.1.
    	
Non-Exclusive License to   TOKIN
    	
 
    	
13
    
	
 
    	
9.2.
    	
Non-Exclusive License to KEMET
    	
 
    	
13
    
	
 
    	
9.3.
    	
Contract Manufacturing License
    	
 
    	
13
    
	
 
    	
9.4.
    	
No Sublicensing
    	
 
    	
13
    
	
 
    	
9.5.
    	
Grant of Rights in Documentation
    	
 
    	
14
    
	
 
    	
9.6.
    	
Ownership
    	
 
    	
14
    
	
 
    	
9.7.
    	
Exclusion
    	
 
    	
14
    
	
 
    	
9.8.
    	
Other Development and Sales
    	
 
    	
14
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
10.
    	
Rights of Subsidiaries
    	
 
    	
14
    
	
 
    	
 
    	
 
    	
 
    
	
11.
    	
No Royalties
    	
 
    	
14
    
	
 
    	
 
    	
 
    	
 
    
	
12.
    	
Record-Keeping and   Inspections
    	
 
    	
14
    
	
 
    	
 
    	
 
    	
 
    
	
13.
    	
Representations and   Warranties
    	
 
    	
14
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
13.1.
    	
Authority
    	
 
    	
14
    
	
 
    	
13.2.
    	
Ownership and Rights
    	
 
    	
15
    
	
 
    	
13.3.
    	
Non-Infringement
    	
 
    	
15
    
	
 
    	
13.4.
    	
Licensed Technology
    	
 
    	
15
    
	
 
    	
13.5.
    	
Compliance with Laws
    	
 
    	
15
    
	
 
    	
13.6.
    	
Disclaimer of Other Warranties
    	
 
    	
15
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
14.
    	
Confidentiality
    	
 
    	
15
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
14.1.
    	
Confidential Information
    	
 
    	
15
    
	
 
    	
14.2.
    	
Non-disclosure
    	
 
    	
15
    
	
 
    	
14.3.
    	
Exceptions
    	
 
    	
15
    
	
 
    	
14.4.
    	
Limited Disclosure
    	
 
    	
16
    
	
 
    	
14.5.
    	
Confidential Nature of Agreement
    	
 
    	
16
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
15.
    	
Indemnification
    	
 
    	
16
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
15.1.
    	
Indemnity
    	
 
    	
16
    
	
 
    	
15.2.
    	
Procedure for Indemnity
    	
 
    	
16
    

 

3

 

	
16.
    	
Limitations On Liability
    	
 
    	
16
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
16.1.
    	
Consequential Damages   Waiver
    	
 
    	
16
    
	
 
    	
16.2.
    	
Limitation of Liability
    	
 
    	
16
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
17.
    	
Effect on Prior Agreements
    	
 
    	
16
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
18.
    	
Term
    	
 
    	
17
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
19.
    	
Termination
    	
 
    	
17
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
19.1.
    	
Termination for Cause
    	
 
    	
17
    
	
 
    	
19.2.
    	
Insolvency
    	
 
    	
17
    
	
 
    	
19.3.
    	
Termination Without Prejudice to Other   Rights and Remedies
    	
 
    	
17
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
20.
    	
Effect of Termination
    	
 
    	
17
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
20.1.
    	
Effect of Termination on   Obligations
    	
 
    	
17
    
	
 
    	
20.2.
    	
Survival
    	
 
    	
17
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
21.
    	
General Provisions
    	
 
    	
18
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
21.1.
    	
Governing Law
    	
 
    	
18
    
	
 
    	
21.2.
    	
Export Controls
    	
 
    	
18
    
	
 
    	
21.3.
    	
Assignment
    	
 
    	
18
    
	
 
    	
21.4.
    	
Force Majeure
    	
 
    	
18
    
	
 
    	
21.5.
    	
Severability; Waiver
    	
 
    	
18
    
	
 
    	
21.6.
    	
Headings
    	
 
    	
18
    
	
 
    	
21.7.
    	
Notice
    	
 
    	
18
    
	
 
    	
21.8.
    	
Translation of Agreement
    	
 
    	
19
    
	
 
    	
21.9.
    	
Counterparts
    	
 
    	
19
    
	
 
    	
21.10.
    	
Entire Agreement
    	
 
    	
19
    

 

4

 

DEVELOPMENT AND CROSS-LICENSING AGREEMENT

 

This DEVELOPMENT AND CROSS-LICENSING AGREEMENT (the “ Agreement”) is made and entered into this 3rd day of May, 2013 (the “Effective Date”), by and between NEC TOKIN Corporation, a Japanese corporation having an office at 8-1, Nishi-Kanda 3-Chome, Chiyoda-ku, Tokyo, Japan 101-8362 (hereinafter called “TOKIN”) and KEMET Electronics Corporation, a corporation having its main office at 2835 KEMET Way Simpsonville, South Carolina 29681, the United States of America (hereinafter called “KEMET’).

 

Recitals

 

WHEREAS, TOKIN together with its Subsidiaries is a leading manufacturer of tantalum and aluminum capacitors, EMC devices, Relays, Piezo devices and IC Cards; and

 

WHEREAS, KEMET together with its Subsidiaries is a leading worldwide developer and manufacturer of tantalum, aluminum, film and ceramic capacitors, among other products;

 

WHEREAS, KEMET wishes to obtain a non-exclusive license to use and incorporate TOKIN technology in certain defined products, and TOKIN similarly wishes to obtain a non-exclusive license to use and incorporate KEMET technology in certain defined products; and

 

WHEREAS, KEMET has developed a supply chain for tantalum powder that is designed to provide greater certainty, and other benefits over generally available supplies of tantalum powder, and TOKIN wishes to obtain access to this supply chain;

 

WHEREAS, each Party is willing to grant such licenses, and KEMET is willing to grant such supply chain access, all on the terms and conditions set out below;

 

NOW, THEREFORE, for good and sufficient consideration, the parties agree as follows:

 

Agreement

 

1.                                      Definitions.

 

1.1.                            “Agreement”.  The term “Agreement” means this Development and Cross-Licensing Agreement.

 

1.2.                            “Capacitor”.  The term “Capacitor” means an electrical component that consists of two conductors (an anode and a cathode), separated by a dielectric material.

 

1.3.                            “Collaborative Development”.  The term “Collaborative Development” shall mean the research and development activities specified in Section 0 (Collaborative Development).

 

1.4.                            “Development Inventions”.  The term “Development Inventions” has the meaning provided in Section 7.1 (Ownership of Development Inventions).

 

1.5.                            “Development Know-How”.  The term “Development Know-How” means all Development Intellectual Property Assets other than Development Inventions, whether such Assets (where applicable) are registered or unregistered.

 

1.6.                            “Documentation”.  The term “Documentation” shall mean development and production documentation, packaging information, quality assurance procedures, or other 

 

5

 

information that describe the manufacture, development, features, functionality, quality assurance procedures, or performance, of a Value Metal Capacitor or Value Metal Capacitor Component.

 

1.7.                            “Effective Date”.  The term “Effective Date” has the meaning set out in the introduction to the Recitals.

 

1.8.                            “Joint Development Inventions”.  The term ““Joint Development Inventions” has the meaning provided in Section 7.1 (Ownership of Development Inventions).

 

1.9.                            “Joint Development Know-How”.  The term “Joint Development Know-How” has the meaning set out in Section 7.2 (Ownership of Development Know-How).

 

1.10.                     “KEMET Development Inventions”.  The term “KEMET Development Inventions” has the meaning provided in Section 7.1 (Ownership of Development Inventions).

 

1.11.                     “KEMET Development IPR”.  The term “KEMET Development IPR” means (i) KEMET’s (or its Subsidiaries’) interests in Joint Development Inventions and Joint Development Know-How; and (ii) KEMET Development Inventions and KEMET Development Know-How.

 

1.12.                     “KEMET Development Know-How”.  The term “KEMET Development Know-How” has the meaning set out in Section 7.2 (Ownership of Development Know-How).

 

1.13.                     “KEMET Tantalum Supply Chain”.  The term “KEMET Tantalum Supply Chain” has the meaning provided in Section 4.1 (Development of Supply Chain).

 

1.14.                     “Licensed Valve Metal Capacitor Products and Components”.  The term “Licensed Valve Metal Capacitor Products and Components” means Valve Metal Capacitor Products and Components (and associated processes) which (i) if KEMET were to manufacture, use, sell, import, practice, or otherwise exploit, would infringe a Relevant TOKIN Intellectual Property Right but for the license granted to KEMET in Section 9 (Grant of Rights); or (b) if TOKIN were to manufacture, use, sell, import, practice, or otherwise exploit, would infringe a Relevant KEMET Intellectual Property Right, but for the license granted to TOKIN in Section 9 (Grant of Rights).

 

1.15.                     “Licensed Technology”.  The term “Licensed Technology” means (i) the Relevant KEMET Technology; (ii) the Relevant TOKIN Technology; or (iii) both the Relevant KEMET Technology and the Relevant TOKIN Technology, as the context permits.

 

1.16.                     “Licensee”.  The term “Licensee” means either KEMET or TOKIN, as the case may be.

 

1.17.                     “Licensor”.  The term “Licensor” means either KEMET or TOKIN, as the case may be.

 

1.18.                     “Other Development and Production Rights”.  The term “Other Development and Production Rights” means intellectual property rights that relate to or are useful in (a) the development and physical implementation of the Licensed 

 

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Technology, or (b) the production of Valve Metal Capacitor Products and Components, other than Patent Rights, Rights under Copyright, and Trade Secret Rights.

 

1.19.                     “Party” or “Parties”.  The term “Party” or “Parties” means either TOKIN, KEMET, or KEMET and TOKIN, as the context permits.

 

1.20.                     “Patent Rights”.  The term “Patent Rights”  means patents, design patents, patent applications, divisions, continuations, continuations-in-part, reissues, renewals, extensions, supplementary protection certificates, utility models, and the like of such patents and patent applications, and foreign counterparts and equivalents thereof; that relate to Valve Metal Capacitor Products and Components.

 

1.21.                     “Person”.  The term “Person” means any corporation, limited liability company, partnership, private interest foundation, joint venture, trust, association, unincorporated organization, or other entity.

 

1.22.                     “Prior Agreements”.  The term “Prior Agreements” means (i) the Technical License Agreement dated June 10th 1998 between NEC Corporation and KEMET; (ii) the Intellectual Property Frame Agreement dated October 13th 2011 between TOKIN and KEMET; and (iii) the Intellectual Property License Agreement dated April 11th 2012 between TOKIN and KEMET.

 

1.23.                     “Relevant KEMET Intellectual Property Rights”.  The term “Relevant KEMET Intellectual Property Rights” means Patent Rights, Rights under Copyright, Trade Secret Rights, and Other Development and Production Rights, that meet each of the following criteria:  the Right (i) relates or is useful with respect to Valve Metal Capacitor Products and Components; (ii) is in existence as of the Effective Date or arises before expiration of the Term; and (iii) is either (a) solely owned by KEMET or its Subsidiaries or (b) is the subject of a Third-Party inbound license to KEMET (or to its Subsidiaries) that does not require KEMET (or its Subsidiaries) to pay royalties other compensation in order for KEMET (or its Subsidiaries) to sublicense such Right to TOKIN or otherwise permit TOKIN to practice such Right.  For the avoidance of doubt, the term “Relevant KEMET Intellectual Property Rights” expressly includes KEMET Development Inventions and KEMET Development Know-How, and expressly excludes KEMET’s (and its Subsidiaries’) trademarks and service marks.

 

1.24.                     “Relevant KEMET Technology”.  The term “Relevant KEMET Technology” means a technology that meets each of the following criteria:  the technology (i) exists as of the Effective Date or is developed or reduced to practice before expiration of the Term; (ii) is embodied (a) in one or more Valve Metal Capacitor Products and Components, (b) in processes that relate or are useful with respect to one or more Valve Metal Capacitor Products and Components, or (c) in designs, software, reports, test results, Documentation, data, or other tangible embodiments; and (iii) is owned or controlled by KEMET or its Subsidiaries.

 

1.25.                     “Relevant TOKIN Intellectual Property Rights”.  The term “Relevant TOKIN Intellectual Property Rights” means Patent Rights, Rights under Copyright, Trade Secret Rights, and Other Development and Production Rights, that meet each of the following criteria:  the Right (i) relates or is useful with respect to Valve Metal Capacitor Products and Components; (ii) is in existence as of the Effective Date or arises before expiration of the Term; and (iii) is either (a) solely owned by TOKIN or its Subsidiaries or (b) is the subject of a Third-Party inbound license to TOKIN (or to its Subsidiaries) that does not require TOKIN (or its Subsidiaries) to pay royalties other compensation in order for TOKIN (or its Subsidiaries) to sublicense such Right to KEMET or otherwise permit 

 

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KEMET to practice such Right.  For the avoidance of doubt, the term “Relevant TOKIN Intellectual Property Rights” expressly includes TOKIN Development Inventions and TOKIN Development Know-How, and expressly excludes TOKIN’s (and its Subsidiaries’) trademarks and service marks.

 

1.26.                     “Relevant TOKIN Technology”.  The term “Relevant TOKIN Technology” means a technology that meets each of the following criteria:  the technology (i) exists as of the Effective Date or is developed or reduced to practice before expiration of the Term; (ii) is embodied (a) in one or more Valve Metal Capacitor Products and Components, (b) in processes that relate or are useful with respect to one or more Valve Metal Capacitor Products and Components, or (c) in designs, software, reports, test results, Documentation, data, or other tangible embodiments; and (iii) is owned or controlled by TOKIN or its Subsidiaries.

 

1.27.                     “Rights under Copyright”.  The term “Rights under Copyright” means all rights protected by copyright law, including (a) rights in registered and unregistered works of authorship; (b) the right to copy, distribute, modify, publicly perform, and publicly display such works; and (c) all applications, registrations, and renewals in connection with such works.

 

1.28.                     “Subsidiary”.  The term “Subsidiary” means with respect to any specified Person, any other Person (a) whose board of directors or similar governing body, or a majority thereof, may presently be directly or indirectly elected or appointed by such specified Person, (b) whose management decisions and corporate actions are directly or indirectly subject to the present control of such specified Person, or (c) whose voting securities are more than fifty percent (50%) owned, directly or indirectly, by such specified Person; provided, however, that TOKIN shall not be considered a Subsidiary of KEMET for purposes of this Agreement.

 

1.29.                     “Technical Steering Committee”.  The term “Technical Steering Committee” has the meaning provided in Section 2.1 (Formation of Technical Steering Committee).

 

1.30.                     “Term”.  The term “Term” shall have the meaning provided in Section 16 (Term).

 

1.31.                     “Third Party”.  The term “Third Party” means any party other than TOKIN, KEMET, Affiliates of TOKIN, or Affiliates of KEMET.

 

1.32.                     “TOKIN Development Inventions”.  The term “TOKIN Development Inventions” has the meaning provided in Section 7.1 (Ownership of Development Inventions).

 

1.33.                     “TOKIN Development IPR”.  The term “TOKIN Development IPR” means (i) TOKIN’s (or its Subsidiaries’) interests in Joint Development Inventions and Joint Development Know-How; and (ii) TOKIN Development Inventions and TOKIN Development Know-How.

 

1.34.                     “TOKIN Development Know-How”.  The term “TOKIN Development Know-How” has the meaning set out in Section 7.2 (Ownership of Development Know-How).

 

1.35.                     “Trade Secret Rights”.  The term “Trade Secret Rights” means rights in know-how, technology or information, including know-how, information and technology (a) that derives economic value, actual or potential, from not being generally known to or 

 

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readily ascertainable by others, and (b) that is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.  By way of example, the term “Trade Secret Rights” includes, without limitation, (i) rights in ideas, developments, and inventions (whether patentable or unpatentable and whether or not reduced to practice) which are maintained in confidence, and rights in all improvements thereto which are maintained in confidence; and (ii) rights in research and development results; formulas; compositions of matter; prototypes; operational, manufacturing and production processes and techniques; business methods; technical data; documentation; reports, designs, drawings, and specifications; and pricing and cost information.

 

1.36.                     “Valve Metal”.  The term “Valve Metal” means a metal which, when oxidized, allows current to pass if used as a cathode but opposes the flow of current when used as an anode.  Examples of valve metals include, without limitation, tantalum, aluminum, niobium, titanium, zirconium and tungsten.  The term “Valve Metal’ as used herein also includes compounds and alloys of Valve Metals with other elements.

 

1.37.                     “Valve Metal Capacitor Components”.  The term “Valve Metal Capacitor Components” means (i) powder, wire, and anodes that relate to, or are useful with respect to, Capacitor Products; (ii) dielectric materials and dielectrics that relate to, or are useful with respect to, Capacitor Products; (iii) cathode materials (including, but not limited to, to conductive polymers, MnO2, graphite [carbon] and metal layers) that relate to, or are useful with respect to, Capacitor Products; and (iv) packaging technologies (including, but not limited to attaching capacitors to a lead frame, encapsulating capacitors in a molding compound or in a circuit board) that relate to, or are useful with respect to, Capacitor Products, (v) aging and burn in technologies (included, but not limited to electrical methods for reducing the leakage current and increasing the reliability) that relate to, or are useful with respect to, Capacitor Products, (vi) electrical testing (including, but not limited to methods of screening electrical components, quality testing, and reliability testing) that relate to, or are useful with respect Capacitor Products, and (vii) final packaging (including, but not limited to forming leads, placing capacitors in carrier type or other packaging, testing capacitors at intermediate steps during the final packaging process) that relate to, or are useful with respect to Capacitor Products.

 

1.38.                     “Valve Metal Capacitor Product”.  The term “Capacitor Product” means a Capacitor constructed in whole or in part from Valve Metal.

 

1.39.                     “Valve Metal Capacitor Products and Components”.  The term “Valve Metal Capacitor Products and Components” means (i) Valve Metal Capacitor Products and (ii) Valve Metal Capacitor Components.

 

2.                                      Technical Steering Committee.

 

2.1.                            Formation of Technical Steering Committee.  Within thirty (30) days after the Effective Date, the Parties shall establish a technical steering committee (the “Technical Steering Committee” or the “Committee”), as follows:

 

2.2.                            Composition.  Each Party shall designate its representatives on the Committee.  The Parties shall mutually agree on the appointment of a Committee Chairman and Vice Chairman, with the Chairman representing one Party and the Vice Chairman representing the other Party.  The Committee shall consist of an equal number of representatives of each Party (but no less than two (2)).  Each representative shall be a senior officer and/or manager of a Party, and have relevant and appropriate experience.  Each Party may, at its discretion, invite a reasonable number of non-Committee employees, consultants or scientific advisors to attend a meeting of the 

 

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Committee, provided that such invitees are bound by appropriate confidentiality obligations.

 

2.3.                            Meetings.  As an initial matter, the Committee shall meet no less frequently than quarterly (subject to change per agreement of the Committee) and shall meet at such other times as deemed appropriate by the Committee.  Each Party may change one or more of its representatives to the Committee at any time upon notice to the other Party.  Meetings shall be held, in the Committee’s discretion, (a) via remote means (such as telephone conference calls, or video conferencing) or (b) via face-to-face meetings, with the location of such meetings to alternate between the USA and Japan or at such other place or places as are mutually agreed.

 

2.4.                            Decision-Making.  The Technical Steering Committee shall operate by consensus, and any dispute that arises that cannot be resolved by the Committee as a whole shall be resolved by the Committee Chairman, provided, however, that the Committee Vice-Chairman can timely appeal the Chairman’s decision to the Parties’ upper management for reconsideration and final resolution.

 

2.5.                            Functions.  The Committee shall oversee and control the Parties’ Collaborative Development work, such oversight and control to include review, approval, and modification of project plans, resource allocations, developments with respect to Licensed Technology and Valve Metal Capacitor Products and Components, development activities status and delays, and other associated matters within the scope of this Agreement.

 

3.                                      Delivery of Licensed Technology.

 

3.1.                            Initial Delivery.  Within a reasonable time from the Effective Date, the Parties shall exchange materials that embody the Licensed Technology and that are in a form good and sufficient for the uses and purposes permitted to each Party under this Agreement.

 

3.2.                            Subsequent Deliveries.  During the Term, (i) KEMET shall timely deliver to TOKIN materials that embody KEMET Developed IPR and updates to Relevant KEMET Technology; and (ii) TOKIN shall timely deliver to KEMET materials that embody TOKIN Developed IPR and updates to Relevant TOKIN Technology.  A Party shall make disclosures concerning such Developed IPR and updates in accordance with Section 7.3 (Disclosure).

 

3.3.                            No Disclosure Of Third Party Confidential Information.  For the avoidance of doubt, nothing in this Agreement obligates a Party to disclose information or technology that constitutes confidential information of Third Party.  Neither Party shall disclose information to the other in breach of confidentiality obligations such Party might owe to Third Parties.

 

3.4.                            No Breach of Existing Contractual Obligations.  For the avoidance of doubt, nothing in this Agreement shall be construed as requiring a Party to breach an obligation to a Third Party set forth in a contract in existence as of the date of this Agreement.

 

4.                                      Supply Chain Access.

 

4.1.                            Development of Supply Chain.  KEMET has developed, at considerable expense and commitment of resources, a supply chain for tantalum powder, and this

 

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supply chain is designed to function as a closed-pipe, conflict-free, vertically integrated supply chain for such tantalum powder, from raw ore to finished powder and wire (the “KEMET Tantalum Supply Chain”).

 

4.2.                            Access.  TOKIN recognizes the value of the KEMET Tantalum Supply Chain, and seeks access to this Supply Chain.  In further consideration of the rights provided by TOKIN under this Agreement, KEMET hereby agrees during the Term to employ commercially reasonable efforts to maintain the KEMET Tantalum Supply Chain and to provide TOKIN access to the KEMET Tantalum Supply Chain, on commercial terms designed to provide TOKIN benefits from such Supply Chain that are reasonably equivalent to the benefits the Supply Chain provides KEMET; subject to the restrictions set out in Section 4.3 (No Resale Rights).

 

4.3.                            No Resale Rights.  TOKIN shall employ tantalum powder, wire, and anodes obtained through the KEMET Tantalum Supply Chain solely for its own internal uses and manufacturing.  TOKIN shall not resell to third parties such tantalum powder, in whatever form TOKIN receives such powder from KEMET (whether in powder form, wire form, or other delivered form), and TOKIN shall sell such tantalum powder only as embodied in a finished product manufactured by TOKIN (or by a contract manufacturer to TOKIN).

 

4.4.                            No Obligations.  Notwithstanding the foregoing, TOKIN shall have no obligation to obtain tantalum powder from the KEMET Tantalum Supply Chain and KEMET shall have no obligation to supply tantalum powder from the KEMET Tantalum Supply Chain.  The Parties shall be free to make alternative commercial arrangements for TOKIN’s tantalum powder supply requirements that are designed to provide equivalent benefits to TOKIN as the KEMET Tantalum Supply Chain.

 

5.                                      Collaborative Development.  Subject to the terms and conditions of this Agreement, the Parties shall use commercially reasonable efforts to conduct collaborative research and development activities with respect to Valve Metal Capacitor Product and Components (“Collaborative Development”).  As directed by the Technical Steering Committee, Collaborative Development shall include, but not be limited to design, development, formulation, testing, quality assurance, reliability, performance standards, production, manufacturing, and packaging of Valve Metal Capacitor Products and Components.

 

6.                                      Collaborative Development Contributions by Subsidiaries.  To the extent a Subsidiary of a Party provides services, deliverables, or other contributions to Collaborative Development (each a “Subsidiary Contribution”), such Party shall obtain from this Subsidiary an assignment of rights and ownership (including intellectual property rights) in such Subsidiary Contribution to ensure that all Subsidiary Contributions (and associated intellectual property rights) are governed by this Agreement including, without limitation, by Section 7 (Ownership Rights arising from Collaborative Development) and Section 9 (Grant of Rights).

 

7.                                      Ownership Rights Arising from Collaborative Development.

 

7.1.                            Ownership of Development Inventions.  Ownership of all patentable subject matter that results from Collaborative Development efforts (each a “Development Invention”) will be assigned as follows:  subject to Section 9 (Grant of Rights), (i) ownership of a Development Invention that is solely conceived and reduced to practice by KEMET will be assigned solely to KEMET (“KEMET Development Inventions”); (ii) ownership of a Development Invention that is solely conceived and reduced to practice by TOKIN will be assigned solely to TOKIN (“TOKIN Development Inventions”); and (iii) ownership of a Development Invention that is jointly conceived or reduced to practice by 

 

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TOKIN and KEMET will be assigned jointly to the Parties (“Joint Development Inventions”).

 

7.2.                            Ownership of Development Know-How.  Subject to Section 9 (Grant of Rights), technology that embodies Trade Secret Rights or Rights under Copyright (i) that is solely authored or created by TOKIN will be solely owned by TOKIN (“TOKIN Development Know-How”); (ii) that is solely authored or created by KEMET will be solely owned by KEMET (“KEMET Development Know-How”); and (iii) that is jointly authored or created by TOKIN and KEMET will be jointly owned by the Parties (“Joint Development Know-How”).

 

7.3.                            Disclosure.  Each Party will timely disclose to the other Party information concerning the disclosing Party’s Development IPR, in sufficient detail to allow the receiving Party to evaluate and use such IPR for permitted purposes under this Agreement.

 

7.4.                            Developments Outside Field of Valve Metal Capacitor Products and Components.  The Parties recognize that Collaborative Development activities might result in developments that have application outside the field of Valve Metal Capacitor Products and Components (“Outside-Field Uses”).

 

7.4.1.                              Consent Required for Outside-Field Uses for Joint Developments.  Neither Party shall have the right to use, practice, or exploit a Joint Development Invention or Joint Development Know-How with respect to Outside-Field Uses without the express consent of the other, such consent not to be unreasonably withheld or delayed.

 

7.4.2.                              Freedom to Exploit Solely Developed Technology for Outside-Field Uses.  For the avoidance of doubt, (i) KEMET shall be entitled to use, improve, and exploit KEMET Development Know-How and KEMET Development Inventions for Outside-Field Uses without restriction from, payment obligation to, or other obligation to TOKIN; and (ii) TOKIN shall be entitled to use, improve, and exploit TOKIN Development Know-How and TOKIN Development Inventions for Outside-Field Uses without restriction from, payment obligation to, or other obligation to KEMET.

 

7.5.                            Assistance.  Upon request, each Party will execute such documents and provide such assistance as the other Party may reasonably request (at the requesting Party’s expense, upon submission of supporting documentation) to secure and memorialize the ownership rights set out in this Section (Ownership Rights Arising from Collaborative Development).

 

8.                                      Patent Prosecution and Maintenance.  The Parties agree to cause patent applications to be filed and prosecuted on any material Joint Development Invention, with materiality determined by the Technical Steering Committee.  For each Joint Development Invention patent application, the Technical Steering Committee shall determine the jurisdictions and priorities of filing, in accordance with the patent laws applicable to each inventor of the Joint Development Invention.  The Parties shall each be responsible for one-half the costs of filing, prosecuting, and maintaining Patent Rights with respect to such Joint Development Inventions

 

8.1.                            Infringement Actions.  As between the Parties, KEMET shall be entitled to assert and control infringement actions against Third Parties concerning Joint Development Inventions that arise in the United States, and TOKIN shall be entitled to 

 

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assert and control infringement actions against Third Parties concerning Joint Development Inventions that arise in Japan.  The Technical Steering Committee shall determine which Party shall enforce rights in Joint Development Inventions in other jurisdictions; provided, however, that the selected Party shall be entitled to decline to accept such enforcement right.

 

8.2.                            Enforcement Control.  The Party asserting the enforcement right shall be responsible for all costs, attorney’s fees, and expenses associated with the enforcement actions, and the other Party shall reasonably cooperate in such actions, at the asserting Party’s request and reasonable expense (upon submission of supporting documentation).  The asserting Party shall be entitled to retain all recoveries, damages, and other monetary results of any such enforcement action.

 

9.                                      Grant of Rights.

 

9.1.                            Non-Exclusive License to TOKIN.  In consideration of TOKIN’s grant of rights to KEMET under Section 9.2 (Non-Exclusive License to KEMET), and subject to the terms and conditions of this Agreement, KEMET hereby grants to TOKIN, under Relevant KEMET Intellectual Property Rights, a non-exclusive, worldwide, perpetual, paid-up, royalty-free license (a) to copy, use, modify, and practice Relevant KEMET Technology solely for purposes of developing Licensed Valve Metal Capacitor Products and Components (and for no other purpose); and (b) to make, have made, use, sell, offer to sell, import, and otherwise exploit Licensed Valve Metal Capacitor Products and Components.

 

9.2.                            Non-Exclusive License to KEMET.  In consideration of TOKIN’s grant of rights to KEMET under Section 9.1 (Non-Exclusive License to TOKIN), and subject to the terms and conditions of this Agreement, TOKIN hereby grants to KEMET, under Relevant TOKIN Intellectual Property Rights, a non-exclusive, worldwide, perpetual, paid-up, royalty-free license (a) to copy, use, modify, and practice Relevant TOKIN Technology solely for purposes of developing Licensed Valve Metal Capacitor Products and Components (and for no other purpose); and (b) to make, have made, use, sell, offer to sell, import, and otherwise exploit Licensed Valve Metal Capacitor Products and Components.

 

9.3.                            Contract Manufacturing License.  KEMET hereby grants to TOKIN permission to engage a contract manufacturer to manufacture Licensed Valve Metal Capacitor Products and Components on TOKIN’S behalf; provided such contract manufacturer sells and transfers all such Licensed Valve Metal Capacitor Products and Components solely to TOKIN (or its Affiliates), and to no other person or entity. TOKIN similarly hereby grants to KEMET permission to engage a contract manufacturer to manufacture Licensed Valve Metal Capacitor Products and Components on KEMET’S behalf; provided such contract manufacturer sells and transfers all such Licensed Valve Metal Capacitor Products and Components solely to KEMET (or its Affiliates), and to no other person or entity.

 

9.4.                            No Sublicensing.  Other than rights to sublicense to Subsidiaries, as set out in Section 10 (Rights of Subsidiaries), a Party shall not be entitled to sublicense its rights under this Agreement, and this prohibition includes a prohibition on sublicensing rights under this Section 9 (Grant of Rights).  It is agreed and understood that the contract manufacturing license set out in Section 9.3 (Contract Manufacturing License) represents the exercise of a Party’s limited “have made” rights under Sections 9.1 (Non-Exclusive License to TOKIN) or 9.2 (Non-Exclusive License to KEMET), and does not constitute a permission to sublicense.

 

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9.5.                            Grant of Rights in Documentation.  Subject to the terms and conditions of this Agreement, each Party grants to the other a non-exclusive, irrevocable, royalty-free, worldwide license to copy, use, modify and distribute, but solely for internal business purposes and solely in connection with Licensed Valve Metal Capacitor Products and Components.

 

9.6.                            Ownership.  Except for those rights expressly granted in this Agreement, (a) TOKIN retains all right, title, and interest in and to all TOKIN intellectual property rights, including Relevant TOKIN Intellectual Property Rights; and (b) KEMET retains all right, title, and interest in and to all KEMET intellectual property rights, including Relevant KEMET Intellectual Property Rights.

 

9.7.                            Exclusion.  For the avoidance of doubt, Intellectual property rights not expressly included in the grants set out in this Section 9 (Grant of Rights) are excluded from this Agreement and, for example, the Parties expressly intend to exclude trademark rights from this Agreement.  Attached hereto as Schedule 9.7(a) includes all KEMET Patent Rights (which term includes both patents and patent applications) that are jointly owned by Third Parties and therefore excluded from the grants set out in this Section 9.  Attached hereto as Schedule 9.7(b) includes all TOKIN Patent Rights (which term includes both patents and patent applications) that are jointly owned by Third Parties and therefore excluded from the grants set out in this Section 9.

 

9.8.                            Other Development and Sales.  It is understood and agreed that each Party shall be free and without restriction to develop, market, license, and sell products and technology as it may see fit (including products and technology that may, or may not compete with the Licensed Technology or the Licensed Valve Metal Capacitor Products and Components), provided that such Party fully complies with its obligations to the other Party concerning Confidential Information under Section 14 (Confidentiality).

 

10.                               Rights of Subsidiaries.  It is agreed and understood that a Party as Licensee under Section 9 (Grant of Rights) shall be entitled to sublicense to its Subsidiaries the rights it has been granted under Section 9 (Grant of Rights); provided such Party causes its Subsidiaries to comply with all applicable provisions of this Agreement (including but not limited to those restrictions set out in Section 9 (Grant of Rights), and Section 13 (Confidentiality)).  A Party sublicensing its rights to a Subsidiary shall be, and remain, responsible and accountable for its Subsidiaries’ compliance with this Agreement.

 

11.                               No Royalties.  The Parties hereby agree that their mutual rights and obligations under this Agreement constitute all requisite consideration for this Agreement.  Neither Party shall owe royalties or other compensation to the other for such Party’s exercise of those rights with respect to Licensed Valve Metal Capacitor Products and Components that are specified in Section 9 (Grant of Rights).

 

12.                               Record-Keeping and Inspections.  Each Party agrees to maintain such books and records concerning the Licensed Valve Metal Capacitor Products and Components manufactured or sold by it as the other Party shall reasonably request, and shall permit such books and records to be examined upon reasonable advance written notice during the Term by authorized representatives of the other Party, during usual business hours, for purposes of determining compliance with this Agreement.

 

13.                               Representations and Warranties.

 

13.1.                     Authority.  Each Party represents and warrants that it has the full right and authority to enter into this Agreement, and that, to the best of its knowledge, there are no 

 

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prior agreements, commitments or other obstacles which could prevent it from carrying out all of its obligations hereunder.

 

13.2.                     Ownership and Rights.  Each Party represents and warrants either (a) that it is the owner of the entire right, title and interest in and to its Licensed Technology, or (b) that it holds rights to such Licensed Technology that are good and sufficient to meet its obligations under this Agreement.

 

13.3.                     Non-Infringement.  Each Party represents and warrants that, as of the Effective Date and during the Term, its Licensed Technology does not and shall not infringe a Third Party’s (a) Patent Rights, (b) Rights under Copyright, (c) Trade Secret Rights, or (d) Other Development and Production Rights.

 

13.4.                     Licensed Technology.  Each Party represents and warrants that there is no claim, pending or threatened, of infringement, interference or invalidity regarding any part or all of its Licensed Technology and their use as contemplated in this Agreement, and it has no present knowledge from which it can be inferred that its Licensed Technology is invalid.

 

13.5.                     Compliance with Laws.  Each Party represents and warrants that it shall comply at its own expense with all applicable laws, rules and regulations of governmental bodies and agencies, including all laws, rules and regulations affecting or governing exports, in its performance under this Agreement.

 

13.6.                     Disclaimer of Other Warranties.  EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION 13 (Representations and Warranties), NEITHER PARTY MAKES ANY OTHER WARRANTIES (AND EXPRESSLY DISCLAIMS ANY AND ALL SUCH WARRANTIES), WHETHER EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND IMPLIED WARRANTIES ARISING FROM COURSE OF DEALING OR COURSE OF PERFORMANCE.

 

14.                               Confidentiality.  Confidential or sensitive information one Party (the “Disclosing Party”) provides to the other Party (the “Receiving Party”) under this Agreement shall be governed as follows.

 

14.1.                     Confidential Information.  Confidential Information under this Agreement shall consist of all non-public information and non-public know-how disclosed pursuant to this Agreement, whether oral or in writing (a) that is designated as “Confidential” or “Proprietary” by the Disclosing Party at the time of disclosure or within a reasonable period thereafter; (b) that concerns the customers, finances, methods, research, processes or procedures of the Disclosing Party; (c) that comprises the Licensed Technology; or (d) that by the nature of the circumstances surrounding disclosure, should in good faith be treated as confidential (collectively, “Confidential Information”).

 

14.2.                     Non-disclosure.  A Receiving Party will retain the Disclosing Party’s Confidential Information in strict confidence, and shall not use such Information except for purposes permitted under this Agreement.  A Receiving Party shall be entitled to disclose Confidential Information of the Disclosing Party on a need to know basis to its employees, provided such employees are bound by non-disclosure obligations no less protective than those set out in this Agreement.

 

14.3.                     Exceptions.  The Parties’ obligations with respect to Confidential Information under this Agreement will not apply to Confidential Information which the Receiving Party 

 

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can demonstrate: (i) is or becomes a matter of public knowledge through no fault of the Receiving Party; (ii) was or becomes available to the Receiving Party on a non-confidential basis from a third Party, provided that such third Party is not bound by an obligation of confidentiality to the Disclosing Party with respect to such Confidential Information; (iii) was independently developed by the Receiving Party without reference to the Disclosing Party’s Confidential Information; or (iv) is required to be disclosed by law, provided that the Disclosing Party is promptly notified by the Receiving Party in order to provide the Disclosing Party an opportunity to seek a protective order or other relief.

 

14.4.                     Limited Disclosure.  Notwithstanding the foregoing, subject to review and comment by non-disclosing Party, one Party shall be entitled to disclose the Confidential Information of the other Party, but only to the extent such disclosure is required for the manufacture of the Licensed Valve Metal Capacitor Products and Components, in accordance with Section 9.3 (Contract Manufacturing License).

 

14.5.                     Confidential Nature of Agreement.  The terms of this Agreement are considered “Confidential Information” under this Section 14 (Confidentiality).

 

15.                               Indemnification.

 

15.1.                     Indemnity.  Each Party (the “Indemnifying Party”) shall indemnify and defend the other (the “Indemnified Party”) against any third party claim, action, suit or proceeding arising out of any breach of that Party’s obligations set out in Section 13 (Representations and Warranties) and Section 14 (Confidentiality).  Subject to Section 15.2 (Procedure for Indemnity), the Indemnifying Party shall indemnify the Indemnified Party for all losses, damages, liabilities and all reasonable expenses and costs incurred by the Indemnified Party in any such claim, action, suit or proceeding (each a “Claim”).

 

15.2.                     Procedure for Indemnity.  The Indemnifying Party’s obligations are conditioned upon the Indemnified Party: (a) giving the Indemnifying Party prompt written notice of any Claim for which the Indemnified Party is seeking indemnity; (b) granting control of the defense and settlement to the Indemnifying Party; and (c) reasonably cooperating with the Indemnifying Party at the Indemnifying Party’s expense.  An Indemnified Party is entitled to participate in any defense at its own expense with counsel of its own choosing.

 

16.                               Limitations On Liability.

 

16.1.                     Consequential Damages Waiver.  EXCEPT FOR A CLAIM FOR INDEMNIFICATION MADE PURSUANT TO SECTION 15 (Indemnification), IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, SPECIAL, OR CONSEQUENTIAL DAMAGES OF ANY KIND OR NATURE WHATSOEVER, INCLUDING WITHOUT LIMITATION, LOSS OF PROFITS OR OTHER ECONOMIC LOSS, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

 

16.2.                     Limitation of Liability.  EXCEPT FOR A CLAIM FOR INDEMNIFICATION MADE PURSUANT TO SECTION15 (Indemnification), IN NO EVENT WILL THE LIABILITY OF EITHER PARTY, IN THE AGGREGATE, EXCEED THE TOTAL AMOUNT OF PAYMENTS PAID TO OR DUE TO LICENSOR UNDER THIS AGREEMENT.

 

17.                               Effect on Prior Agreements.  The Parties acknowledge that they have acted under mutual agreements prior to this Agreement (“Prior Agreements”).  In consideration of the mutual rights and obligations set out in this Agreement, each Party hereby agrees (i) that this Agreement 

 

16

 

supersedes all Prior Agreements; and (ii) that all provisions of, and all rights and obligations under, the Prior Agreements including, without limitation, provisions regarding the payment of royalties, are of no further force or effect; provided, however that this Section 17 (Effect on Prior Agreements) shall not affect those provisions of the Prior Agreements that expressly survive termination (other than any royalty provisions, which shall in no circumstance survive), and such provisions shall survive and continue in force in accordance with the respective Prior Agreement.

 

18.                               Term.  Unless terminated in accordance with Section 17 (Termination) this Agreement shall commence as of the Effective Date and continue for a period (the “Term”) which shall terminate upon the date of termination of the March 12, 2012 Stockholders’ Agreement among KEMET, TOKIN and NEC Corporation.

 

19.                               Termination.

 

19.1.                     Termination for Cause.  In the event that either of the Parties is in material breach of any obligation under this Agreement, the non-breaching Party may terminate this Agreement for cause upon written notice after first:  (i) providing the other Party with written notice of the breach (a “Notice of Breach”) and (ii) providing thereafter a thirty (30) day opportunity to cure beginning on the date of receipt by the alleged breaching Party of the Notice of Breach.

 

19.2.                     Insolvency.  In the event a Party shall make an assignment for the benefit of creditors, or shall have a petition in bankruptcy filed for or against it that is not dismissed within sixty (60) days, the other Party shall have the right to terminate this Agreement immediately upon providing written notice of such termination.

 

19.3.                     Termination Without Prejudice to Other Rights and Remedies.  Termination of this Agreement will be without prejudice to the terminating Party’s other rights and remedies pursuant to this Agreement.

 

20.                               Effect of Termination.

 

20.1.                     Effect of Termination on Obligations.  Upon termination or expiration of this Agreement, a Party and its Affiliates shall be entitled to continue to exercise all rights with respect to Licensed Valve Metal Capacitor Products and Components granted in Section 9 (Grant of Rights).  The term “After-Acquired IPR” means an intellectual property right developed, licensed, or acquired by a Party after termination or expiration of this Agreement.  For the avoidance of doubt, one Party shall hold no rights or interests whatsoever in After-Acquired IPR of the other Party.

 

20.2.                     Survival.  All provisions that, by their nature should survive termination or expiration of this Agreement, shall survive such termination or expiration, including, by way of clarifying examples, the following Sections:

 

Section 7.1 (Ownership of Development Inventions)

Section 7.2 (Ownership of Development Know-How)

Section 7.4 (Developments Outside Field of Valve Metal Capacitor Products and Components)

Section 9 (Grant of Rights)

Section 10 (Rights of Subsidiaries)

Section 14 (Confidentiality)

Section 16 (Limitations on Liability)

Section 17 (Effect of Termination on Obligations)

 

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21.                               General Provisions.

 

21.1.                     Governing Law.  This Agreement will be governed and construed in accordance with the laws of the State of New York.  All disputes, controversies, or differences which may arise between the parties, out of or in relation to or in connection with this Agreement, or the breach thereof, shall be finally settled by arbitration pursuant to the Japan-American Trade Arbitration Agreement of September 16, 1952, by which each party hereto is bound.

 

21.2.                     Export Controls.  In the event that the Licensed Valve Metal Capacitor Products and Components are subject to export control limitations, the Party selling such Licensed Valve Metal Capacitor Products and Components shall be responsible for associated compliance with such export controls.

 

21.3.                     Assignment.  A Party shall not assign this Agreement or any right or interest under this Agreement, nor delegate any work or obligation to be performed under this Agreement (an “assignment”), without the other Party’s prior written consent, which consent shall not be unreasonably withheld or delayed.  For purposes of this Section 19.4 (Assignment), an “assignment” shall be deemed to include the following: (a) the acquisition of more than fifty percent (50%) of any class of the Licensee’s voting stock (or any class of non-voting security convertible into voting stock) by a Third Party (whether in a single transaction or series of related transactions) resulting in an effective change of control of Licensee; or (b) the sale of more than fifty percent (50%) of Licensee’s assets (whether in a single transaction or series of related transactions).  Any attempted assignment in contravention of this 19.4 (Assignment) shall be void and ineffective

 

21.4.                     Force Majeure.  Neither Party shall be liable for any delay in performing its obligations under this Agreement, if such delay is caused by circumstances beyond the Party’s reasonable control, including without limitation, any acts of God, war, terrorism, floods, windstorm, labor disputes, changes in laws or regulations, or delay of essential materials or services.  The Party not affected by the force majeure shall have the right to terminate this Agreement without penalty if the Party affected by the force majeure event is unable to resume full performance within sixty (60) days of occurrence of the event.

 

21.5.                     Severability; Waiver.  If any provision of this Agreement is held to be invalid or unenforceable for any reason, the remaining provisions will continue in full force without being impaired or invalidated in any way. The Parties agree to replace any invalid provision with a valid provision which most closely approximates the intent and economic effect of the invalid provision.  The waiver by either Party of a breach of any provision of this Agreement will not operate or be interpreted as a waiver of any other or subsequent breach.

 

21.6.                     Headings.  Headings used in this Agreement are for reference purposes only and in no way define, limit, construe or describe the scope or extent of such section or in any way affect this Agreement.

 

21.7.                     Notice.  Any notices required or permitted hereunder shall be given to the appropriate Party at the address specified below or at such other address as the Party shall specify in writing.  Such notice shall be deemed given: (a) upon personal delivery; (b) if sent by facsimile or email, upon confirmation of receipt; or (c) if sent by certified or registered mail, postage prepaid, five (5) days after the date of mailing.

 

18

 

	
To   KEMET:
    	
To   TOKIN:
    
	
KEMET   Electronics Corporation
    	
NEC   TOKIN Corporation
    
	
101   N.E. 3rd. Ave., Ste.   1700 

Fort   Lauderdale, FL 33301 USA 

Phone   - +1-954-766-2817 

Fax   - +1-866-552-2817 

Email   — jamieassaf@kemet.com
    	
560,   Nyuzen, Nyuzen-machi, 

Shimoniikawa-gun,   Toyama 939-0626, 

Japan   

Phone:   +81-765-72-5941 

Fax:   +81-765-72-5796
    
	
Attn:   General Counsel
    	
Email:   m-yamane@yk.jp.nec.com
    

 

21.8.                     Translation of Agreement.  This English-language version of this Agreement will govern and control any translations of this Agreement into any other language.

 

21.9.                     Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall be taken together and deemed to be one instrument.

 

21.10.              Entire Agreement.  This Agreement, including the exhibits attached hereto, sets forth the entire understanding and agreement of the parties and supersedes any and all oral or written agreements or understandings between the parties as to the subject matter of this Agreement. It may be changed only by a writing signed by both parties. Neither Party is relying upon any warranties, representations, assurances or inducements not expressly set forth herein.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective duly authorized representatives as of the Effective Date.

 

	
KEMET   Electronics Corporation
    	
 
    	
NEC   TOKIN Corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   Per-Olof Loof
    	
 
    	
By:
    	
/s/   Shigenori Oyama
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Per-Olof   Loof
    	
 
    	
Name:   
    	
Shigenori   Oyama
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
CEO
    	
 
    	
Title:
    	
President
    
						

 

19

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