8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): June 30, 2009

KEMET Corporation

(Exact Name of Registrant As Specified In Charter)

Delaware	0-20289	57-0923789
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

2835 KEMET Way, Simpsonville, SC 29681
(Address of Principal Executive Offices, including  Zip Code)

(864) 963-6300
(Registrant’s telephone number, including area code)

Not applicable
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

The KEMET Corporation (the “Company”) tender offer (the “Tender Offer”) to purchase any and all of its outstanding 2.25% Convertible Senior Notes due 2026 (the “Notes”) expired at 11:59 p.m., New York City time, on June 26, 2009 (the “Expiration Date”). On June 30, 2009, the Company announced the acceptance for purchase of all outstanding Notes that were validly tendered and not validly withdrawn as of the Expiration Date. Based on final information provided to the Company by D.F. King & Co., Inc., the information agent and depositary for the Tender Offer, $93,919,000 in aggregate principal amount of Notes, representing approximately 53.67 percent of the aggregate principal amount of the outstanding Notes prior to the completion of the Tender Offer, were validly tendered and accepted for purchase in the Tender Offer, at a purchase price of $400 per $1,000 principal amount of Notes, plus accrued and unpaid interest up to, but not including, the date of purchase. The aggregate consideration (including accrued and unpaid interest) for the accepted Notes of $37,831,747.19, which was deposited with The Depository Trust Company (“DTC”) on June 30, 2009, will be delivered promptly to tendering holders by DTC. The Company borrowed the necessary funds to pay for the accepted Notes by drawing $37,831,747.19 under the term loan provided pursuant to the Amended and Restated Credit Agreement, dated as of June 7, 2009, as amended, by and among the Company, certain of the Company’s subsidiaries and K Financing, LLC, an affiliate of Platinum Equity Capital Partners II, L.P. (the “Amended and Restated Platinum Credit Facility”), and caused such funds to be deposited with DTC. To pay for the expenses incurred in connection with the Tender Offer and the related transactions, the Company borrowed $10,000,000 under the working capital loan facility provided pursuant to the Amended and Restated Platinum Credit Facility.

In addition, as a result of the funding of the Amended and Restated Platinum Credit Facility, the previously announced amendments to the Company’s credit facilities with UniCredit Corporate Banking S.p.A., entered into in connection with the Tender Offer, have become effective.

On June 30, 2009, upon consummation of the Tender Offer and the closing of the term loan under the Amended and Restated Platinum Credit Facility, the Company (i) issued a warrant (the “Closing Warrant”) to, and entered into an Investor Rights Agreement (the “Investor Rights Agreement”) with, K Financing, LLC and (ii) entered into a Corporate Advisory Services Agreement (the “Corporate Advisory Services Agreement”) with Platinum Equity Advisors, LLC (“Platinum Advisors”), in each case substantially in the forms previously disclosed.

The Closing Warrant entitles K Financing LLC to purchase, subject to its terms and conditions, up to 80,544,685 shares of the Company’s common stock, representing approximately 49.9% of the Company’s outstanding common stock on a post-Closing Warrant basis, at an initial exercise price of $0.50 per share. The number of shares issuable under the Closing Warrant and the exercise price of the Closing Warrant are subject to certain adjustments, among other matters, so long as any Notes remain outstanding (excluding for this purpose any Notes beneficially owned by Platinum Equity Capital Partners II, L.P., K Financing, LLC, or any of their affiliates), in the event of certain issuances by the Company of additional shares of common stock (whether or not K Financing, LLC agrees to such future issuance) such that the Closing Warrant shall continue to represent the right to purchase up to 49.9% of the Company’s outstanding common stock on a post-Closing Warrant basis at a maximum aggregate purchase price of $40,272,343.  The Closing Warrant expires 10 years from its date of issuance.

Pursuant to the terms of the Investor Rights Agreement, the Company has, subject to certain terms and conditions, granted K Financing, LLC board observation rights which permit K Financing, LLC to designate up to three individuals to observe meetings of the Company’s board of directors (the “Board”) and receive information provided to the Board.  In addition, the Investor Rights Agreement provides K Financing, LLC with certain preemptive rights.  Subject to the terms and limitations described in the Investor Rights Agreement, in connection with any proposed issuance of securities, the Company would be required to offer to sell to K Financing, LLC a pro rata portion of such securities equal to the percentage determined by dividing the number of shares of common stock held by K Financing, LLC plus the number of shares of common stock issuable upon exercise of the Closing Warrant, by the total number of shares of common stock then outstanding on a fully diluted basis. The Investor Rights Agreement also provides K Financing, LLC with certain registration and information rights.

The Corporate Advisory Services Agreement has a term of at least four years, pursuant to which the Company will pay an annual fee of $1,500,000 to Platinum Advisors for certain advisory services.

The foregoing descriptions of the Closing Warrant, the Investor Rights Agreement and the Corporate Advisory Services Agreement, copies of which are attached hereto as Exhibits 10.1, 10.2 and 10.3, respectively, and are incorporated herein by reference, are qualified in their entireties by reference to the full text of those documents.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information provided in Item 1.01 is hereby incorporated by reference to this Item 2.03.

Item 3.02 Unregistered Sales of Equity Securities.

The information provided in Item 1.01 is hereby incorporated by reference to this Item 3.02. The Closing Warrant was issued in a private offering pursuant to the exemptions from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), contained in Section 4(2) and Rule 506 thereunder, and the shares of common stock issuable upon exercise of the Closing Warrant will be issued pursuant to an exemption from the registration requirements of the Securities Act.

Item 8.01 Other Events.

On June 30, 2009, the Company announced the expiration and results of the Tender Offer.

Attached hereto as Exhibit 99.1 and incorporated herein by reference to this Item 8.01 is the press release announcing the expiration and results of the Tender Offer.

Item 9.01 Financial Statements and Exhibits.

(d)Exhibits

The list of exhibits in the Exhibit Index to this report is incorporated herein by reference.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	KEMET Corporation
Date: June 30, 2009	/s/ William M. Lowe Jr.
	William M. Lowe, Jr.
	Executive Vice President and
	Chief Financial Officer

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EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release, dated June 30, 2009 (incorporated by reference to Exhibit (a)(10) filed with the Company’s Amendment No. 7 to Schedule TO, filed with the SEC on June 30, 2009).
10.1	Warrant to Purchase Common Stock, dated June 30, 2009, issued by the Company to K Financing, LLC.
10.2	Investor Rights Agreement, dated June 30, 2009, between the Company and K Financing, LLC.
10.3	Corporate Advisory Services Agreement, dated June 30, 2009, between the Company and Platinum Equity Advisors, LLC.

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EX-10.1

Exhibit 10.1

EXECUTION COPY

THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR QUALIFIED OR REGISTERED UNDER ANY APPLICABLE STATE SECURITIES LAWS.  NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY BE SOLD, PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933 AS EVIDENCED BY A LEGAL OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED.

No. W-001 June 30, 2009

KEMET CORPORATION

COMMON STOCK PURCHASE WARRANT

This certifies that, for value received, K Financing, LLC, a Delaware limited liability company (including any successors and assigns, “Holder”), is entitled, subject to the terms set forth herein, to purchase from KEMET Corporation, a Delaware corporation (the “Company”), up to Eighty Million Five Hundred Forty-Four Thousand Six Hundred Eighty-Five (80,544,685) fully paid and nonassessable shares of the Company’s common stock, par value $0.01 per share (“Common Stock”), at a purchase price per share equal to the Per Share Exercise Price, at any time or from time to time on or after the date hereof and prior to 5:00 p.m., New York City time, on June 30, 2019 (the “Expiration Date”).  The number of such shares of Common Stock issuable upon exercise of this Warrant and the Per Share Exercise Price are subject to adjustment as provided in this Warrant.

1.Definitions.   As used in this Warrant, the following terms shall have the meanings indicated:

“Additional Shares” has the meaning given to such term in Section 7(a),

“Affiliate” means, with respect to any Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with the subject Person.  For purposes of this definition, “control” (including, with correlative meaning, the terms “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or by contract or otherwise.

“Beneficially Owned” means with respect to any Person, any securities which such Person or any Affiliate of such Person has “beneficial ownership” of as determined pursuant to Rule 13d-3 of the General Rules and Regulations under the Exchange Act or any successor provision.

“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks in the City of New York, New York are authorized or required by law or executive order to remain closed.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Common Stock” has the meaning given to such term in the preamble to this Warrant.

“Common Stock Equivalents” means any warrant, option, subscription or purchase right with respect to shares of Common Stock, any security convertible into, exchangeable for, or otherwise entitling the holder thereof to acquire, shares of Common Stock or any warrant, option, subscription or purchase right with respect to any such convertible, exchangeable or other security.

“Company” has the meaning given to such term in the preamble to this Warrant.

“Convertible Notes” has the meaning given to such term in the Credit Agreement.

“Corporate Transaction” means (i) any reclassification or change of the outstanding shares of Common Stock (other than as a result of a subdivision or combination thereof), (ii) any consolidation, merger, statutory exchange or combination of the Company with another Person as a result of which holders of Common Stock (or Other Securities) shall be entitled to receive stock, securities or other property or assets (including cash) with respect to or in exchange for such Common Stock and (iii) any other transaction or event in connection with which all or substantially all the Common Stock (or Other Securities) are exchanged for, converted into, acquired for or constitute the right to receive securities of any other Person or any other property (including cash), whether by means of a tender offer, exchange offer, consolidation, merger, share exchange, combination, reclassification, recapitalization, asset sale or otherwise.

“Credit Agreement” means the Amended and Restated Credit Agreement, dated as of June 7, 2009, as amended, by and among the Company, as borrower thereunder, the Subsidiary Guarantors (as defined therein), and K Financing, LLC, as lender thereunder, as the same may be later amended or supplemented in accordance with its terms.

“DTC” has the meaning given to such term in Section 3(a).

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.

“Exercise Price” means, in connection with the exercise of this Warrant at any time, an amount equal to the product obtained by multiplying (i) the then applicable Per Share Exercise Price times (ii) the number of shares of Common Stock for which this Warrant is being exercised at such time.

“Expiration Date” has the meaning given to such term in the preamble to this Warrant.

“Holder” has the meaning given to such term in the preamble to this Warrant.

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“Investor Rights Agreement” means the Investor Rights Agreement entered into as of the date of this Warrant, by and between the Company and the Holder, as amended from time to time.

“Issuance Date” means the date of original issuance of this Warrant.

“Line of Credit Loan” has the meaning given to such term in the Credit Agreement.

“Maximum Aggregate Exercise Price” means Forty Million Two Hundred Seventy-Two Thousand Three Hundred Forty-Three Dollars ($40,272,343).

“Maximum Borrowings Reduction Multiplier” means $0.02000, as such amount may be adjusted from time to time pursuant to Section 6.

“Other Securities” means any capital stock (other than Common Stock) and other securities of the Company or any other Person which Holder at any time shall be entitled to receive, or shall have received, on the exercise of this Warrant, in lieu of or in addition to Common Stock, or which at any time shall be issuable or shall have been issued in exchange for or in replacement of Common Stock or Other Securities pursuant to Section 4 or Section 5.

“Per Share Exercise Price” means, initially, $0.50000.  The Per Share Exercise Price is subject to adjustment as provided in this Warrant.

“Person” means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company, joint venture, unincorporated organization or any other form of entity not specifically listed herein.

“Platinum Equity” means Platinum Equity Capital Partners II, L.P., Holder or any of their Affiliates.

“Principal Market” means, at any time, the securities exchange, quotation system or over-the-counter trading facility on which the Common Stock is then principally traded or quoted at such time.

“Securities Act” means the Securities Act of 1933, as amended.

“Trading Day” means, at any time, a day on which the Principal Market is open for the general trading or quotation of securities and the Common Stock is traded or quoted thereon without suspension or interruption.

“Warrant” means this instrument as originally executed, or if later amended or supplemented in accordance with its terms, then as so amended or supplemented.

“Working Capital Loan” has the meaning given to such term in the Credit Agreement.

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2.Exercise of Warrant.

(a)Exercise.  This Warrant may be exercised by Holder, in whole or in part, in accordance with its terms, at any time or from time to time on or after the date hereof and ending at 5:00 p.m., New York City time, on the Expiration Date.  In connection with any exercise of this Warrant, Holder shall deliver this Warrant to the Company together with a subscription form in substantially the form of Exhibit 1 attached hereto (duly executed by Holder) indicating whether Holder is electing to exercise this Warrant as provided in Section 2(b) or as provided in Section 2(c).  This Warrant shall be deemed exercised for all purposes as of the close of business on the day on which Holder has delivered this Warrant and the subscription form to the Company (including by facsimile as provided in Section 2(e)) and, if applicable, any payment required under Section 2(b), regardless of when the Company issues the certificates evidencing the shares issuable upon such exercise.

(b)Payment of Exercise Price by Wire Transfer or by Cancellation of Indebtedness.   Holder may elect to exercise this Warrant to purchase a specified number of shares by paying the Exercise Price therefor by wire transfer of immediately available funds to an account designated in advance the Company or by cancelling indebtedness owed by the Company to Holder pursuant to the Credit Agreement in such amount (with application first against any interest then due and payable, and second to outstanding principal) or by any combination thereof, as indicated on the subscription form.  Except with respect to the cancellation of indebtedness under the Credit Agreement, the Holder’s obligation to pay the Exercise Price upon exercise of the Warrant in accordance with the terms hereof shall be absolute and unconditional and not subject to any setoff, counterclaim, recoupment or other limitation.

(c)Net Exercise.  Holder may also elect to exercise this Warrant at any time or from time to time, by receiving shares of Common Stock equal to number of shares determined pursuant to the following formula:

X	=	Y (A - B)
		A

where,

X =	the number of shares of Common Stock to be issued to Holder;
Y =	the number of shares of Common Stock as to which this Warrant is to be exercised (as indicated on the subscription form);
A =	the closing bid price on the Principal Market of the Common Stock calculated as of the Trading Day immediately preceding the date of exercise; and
B =	the Per Share Exercise Price.

(d)Partial Exercise.  On any partial exercise of this Warrant, the Company shall promptly issue and deliver to or upon the order of Holder a new Warrant or Warrants of like tenor, in the name of Holder or as Holder (upon payment by Holder of any applicable transfer taxes) may request, providing in the aggregate on the face or faces thereof for the

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purchase of the number of shares of Common Stock for which such Warrant or Warrants may still be exercised.

(e)Delivery by Facsimile.  The delivery of this Warrant and the subscription form as contemplated above upon the exercise hereof may be made by facsimile transmission to such facsimile number as the Company shall provide upon request of Holder for such purpose.  If this Warrant and/or the subscription form is delivered to the Company by facsimile transmission, Holder shall send the original documents to the Company within three (3) Business Days after delivery of such documents by facsimile transmission to the Company; provided, however, that any failure or delay on the part of Holder in delivering the originals of such documents shall not affect the validity or the date on which this Warrant and the subscription form were delivered by facsimile transmission or the effectiveness thereof.

(f)Regulatory Filing Compliance.  If applicable with respect to any exercise of this Warrant (in whole or in part), prior to such exercise the Holder and the Company will make all required material government filings, including notification under the Hart-Scott-Rodino Antitrust improvements Act of 1976, as amended, and the Holder shall pay all filing and similar fees and related expenses payable in connection therewith.

3.Delivery of Stock Certificates.

(a)Delivery of Stock Certificates.  As soon as practicable after any exercise of this Warrant and in any event within three (3) Trading Days thereafter, the Company shall, at its expense (including the payment by it of any applicable issue or stamp taxes), cause to be issued in the name of and delivered to Holder, or as Holder (upon payment by Holder of any applicable transfer taxes) may direct, a certificate or certificates evidencing the number of fully paid and nonassessable shares of Common Stock (or Other Securities, as applicable) (which number shall be rounded up to the nearest whole share in the event any fractional share may otherwise be issuable upon such exercise) to which Holder shall be entitled on such exercise, in such denominations as may be requested by Holder, which certificate or certificates shall be free of restrictive and trading legends (except for any such legends as may be required pursuant to Section 19 hereof).  In lieu of delivering physical certificates for the shares of Common Stock (or Other Securities) issuable upon any exercise of this Warrant, provided the Company’s transfer agent is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”) program or a similar program and the Securities (or Other Securities) are not required to contain a restrictive legend pursuant to Section 19 hereof, upon request of Holder, the Company shall use commercially reasonable efforts to cause its transfer agent to electronically transmit such shares of Common Stock (or Other Securities) issuable upon exercise of this Warrant to Holder (or its designee), by crediting the account of Holder’s (or such designee’s) broker with DTC through its Deposit Withdrawal Agent Commission system (provided that the same time periods herein as for stock certificates shall apply) as instructed by Holder (or its designee).  Subject to Section 2(f), the Company shall pay any taxes and other similar governmental charges that may be imposed in respect of the issue or delivery of shares of Common Stock (or Other Securities) upon exercise of this Warrant (other than income taxes imposed on Holder).  The Company shall not be required, however, to pay any tax or other charge imposed in connection with any transfer involved in the issue of any certificate for shares of Common Stock (or Other Securities) issuable upon exercise of this Warrant to any Person

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other than Holder, and in case of such transfer the Company shall not be required to deliver any certificate for shares of Common Stock (or Other Securities) upon such exercise until such tax or charge has been paid or it has been established to the Company’s reasonable satisfaction that no such tax or charge is due.  Upon exercise of this Warrant as provided herein, the Company’s obligation to issue and deliver the certificates for Common Stock in accordance with the terms of this Warrant shall be absolute and unconditional and not subject to any setoff, counterclaim, recoupment or other limitation.

(b)Consequences of Failure to Deliver Stock Certificates.  If the Company fails to issue and deliver or cause to be delivered the shares of Common Stock (or Other Securities) to Holder within five (5) Trading Days of a particular exercise of this Warrant, then, (i) the Company shall pay or reimburse Holder upon demand (accompanied by a reasonably detailed invoice) for all reasonable out-of-pocket expenses, including, without limitation, reasonable fees and expenses of legal counsel, incurred by Holder as a result of such failure or in enforcing Holder’s rights hereunder, (ii) the Company shall upon demand of Holder reimburse Holder for any damages or out-of-pocket costs suffered by Holder by reason of such failure (including any margin interest and the cost of purchasing securities to cover a sale, whether by Holder or Holder’s securities broker, or borrowing of shares of Common Stock by Holder for purposes of settling any trade involving a sale of shares of Common Stock made by Holder during the period beginning on the date of exercise in accordance herewith and ending on the date the Company delivers or causes to be delivered to Holder such shares of Common Stock), and (iii) Holder shall have the right, exercisable by notice (which may be given in writing as provided in Section 18 or given by oral notice to a senior officer of the Company and promptly confirmed in writing), given at any time prior to delivery to Holder of the shares of Common Stock issuable in connection with such exercise, to rescind such exercise and the subscription form relating thereto, in which case Holder shall thereafter be entitled to subsequently exercise that portion of this Warrant as to which such exercise is so rescinded.  Should the Company fail to comply with its obligations under clauses (i) - (iii) of this Section 3(b), the Holder shall be entitled to pursue any rights or remedies it may have under applicable law.

4.Adjustment for Certain Dividends and Reclassifications.  If, at any time or from time to time on or after the Issuance Date, all holders of Common Stock (or Other Securities) shall have received, or (on or after the record date fixed for the determination of stockholders eligible to receive) shall have become entitled to receive, without payment therefor, other or additional stock (other than Common Stock or Other Securities), rights, warrants, other securities or property (including cash) by way of dividend, spin-off, split-up, reclassification, recapitalization, combination or similar corporate rearrangement, then and in each such case Holder, on the exercise hereof as provided in Section 2, shall be entitled to receive the amount of such stock, rights, warrants, other securities or property (including cash) that Holder would have held on the date of such exercise if, on the date of such dividend, dividend, spin-off, split-up, reclassification, recapitalization, combination or similar corporate rearrangement (or the record date therefor) Holder had been the holder of record of the number of shares of Common Stock called for on the face of this Warrant and had thereafter, during the period from the date thereof to and including the date of such exercise, retained such shares and all such other or additional stock, rights, warrants, other securities and property (including cash) receivable by Holder during such period, giving effect to all adjustments called for during such period pursuant to the terms of this Warrant.

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5.Corporate Transactions.  If, at any time or from time to time on or after the Issuance Date, it is anticipated that a Corporate Transaction will be consummated, the Company or the successor or purchasing Person, as the case may be, shall, prior to or concurrently with the consummation of such Corporate Transaction, execute and deliver to Holder a valid and binding written agreement (i) providing that this Warrant shall thereafter entitle Holder to purchase the kind and amount of shares of stock, other securities, property or assets (including cash) receivable in, or in connection with, such Corporate Transaction by the holder of a number of shares of Common Stock (or Other Securities) issuable upon exercise of this Warrant immediately prior to such Corporate Transaction, assuming such holder of Common Stock did not exercise such holder’s rights of election, if any, as to the kind or amount of securities, cash or other property receivable in such Corporate Transaction (provided that, if the kind or amount of securities, cash or other property receivable upon such Corporate Transaction is not the same for each share of Common Stock in respect of which such rights of election shall not have been exercised (“non-electing share”), then, for the purposes of this Section 5, the kind and amount of securities, cash or other property receivable upon such Corporate Transaction for each non-electing share shall be deemed to be the kind and amount so receivable per share by a plurality of the non-electing shares), (ii) providing that upon the consummation of such Corporate Transaction, the successor or purchasing Person shall be jointly and severally liable with the Company for the performance of all of the Company’s obligations under this Warrant and (iii) including such other provisions relating to this Warrant as may be necessary to preserve the intent of the parties hereunder in light of any changes in the corporate structure or capitalization of the Company or such successor or purchasing party following the consummation of such Corporate Transaction.  If, in the case of any such Corporate Transaction, the stock or other securities or other property or assets receivable thereupon by a holder of shares of Common Stock (or Other Securities) includes shares of stock, other securities, other property or assets of a Person other than the Company or any such successor or purchasing Person, as the case may be, in such Corporate Transaction, then such written agreement shall also be executed by such other Person and shall contain such additional provisions to protect the interests of Holder as the Board of Directors of the Company shall in good faith reasonably consider necessary by reason of the foregoing.  For the avoidance of doubt, the provisions of this Section 5 shall similarly apply to successive Corporate Transactions.

6.Adjustment for Certain Extraordinary Events.  If on or after the Issuance Date the Company shall (i) issue additional shares of the Common Stock as a dividend or other distribution with respect to the outstanding shares of Common Stock on a pro rata basis to all holders thereof, (ii) subdivide or reclassify the outstanding shares of Common Stock, or (iii) combine the outstanding shares of Common Stock into a smaller number of shares of Common Stock, then, in each such event, each of the Per Share Exercise Price and the Maximum Borrowings Reduction Multiplier shall, simultaneously with the happening of such event, be adjusted by multiplying the Per Share Exercise Price or the Maximum Borrowings Reduction Amount, as the case may be, in effect immediately prior to such event by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such event and the denominator of which shall be the number of shares of Common Stock outstanding immediately after such event, and the product so obtained shall thereafter be the Per Share Exercise Price or the Maximum Borrowings Reduction Multiplier then in effect.  The Per Share Exercise Price and the Maximum Borrowings Reduction Multiplier, as so adjusted, shall be readjusted in the same manner upon the happening of any successive event or

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events described herein in this Section 6.  Without double counting under Section 4, Holder shall thereafter, on the exercise of this Warrant as provided in Section 2, be entitled to receive that number of shares of Common Stock determined by multiplying the number of shares of Common Stock which would be issuable on such exercise immediately prior to such issuance, subdivision or combination, as the case may be, by a fraction of which the numerator is the Per Share Exercise Price in effect immediately prior to such issuance and the denominator is the Per Share Exercise Price, as adjusted, in effect on the date of such exercise.

7.Adjustments for Certain Issuances of Securities.  If, at any time (or from time to time) from the Issuance Date through the first date on which no principal amount of the Convertible Notes remains outstanding (excluding for this purpose any Convertible Notes Beneficially Owned by Platinum Equity), the Company issues any shares of Common Stock either to holders of such Convertible Notes in respect of their Convertible Notes or to any Person (other than Platinum Equity) the proceeds of which are directly or indirectly used to retire, repurchase, satisfy, discharge or refinance such Convertible Notes, and in either case expressly other than any issuance (i) upon the exercise of this Warrant, (ii) pursuant to a transaction described in Sections 4, 5 or 6 of this Warrant or (iii) pursuant to any issuance described in causes (i), (ii), (iv) or (v) of Section 3.2(b) of the Investor Rights Agreement (all of such shares of Common Stock issued to holders of Convertible Notes or the portion of such shares of Common Stock issued to such other Persons in respect of proceeds of which are directly or indirectly used to retire, repurchase, satisfy, discharge or refinance of such Convertible Notes, in each case after excluding any shares of Common Stock issued to or Beneficially Owned as a result of such issuance by Platinum Equity, “Additional Shares”), then immediately following such issuance of Additional Shares (I) the number of shares of Common Stock issuable upon exercise of this Warrant shall be automatically increased by a number of shares (rounded to the nearest whole share) equal to 99.8% of the number of Additional Shares so issued (the “Additional Warrant Shares”) and (II) the Per Share Exercise Price shall be automatically reduced to equal the greater of (a) $0.01000 and (b) X, as determined according to the following formula:

X	=	(A - B)
		(Y + Z)

where,

A =	the Maximum Aggregate Exercise Price;
B =	the aggregate amount paid (or deemed to have been paid, in the event of an exercise pursuant to the net exercise provisions set forth in Section 2(c)) upon any and all prior exercises of this Warrant before such issuance of Additional Shares;
Y =	the number of shares of Common Stock issuable upon exercise of this Warrant immediately prior to such issuance of Additional Shares; and
Z =	Such number of Additional Warrant Shares.

8.Adjustment Based on Maximum Aggregate Line of Credit Loan and Working Capital Loan Borrowings.  If the maximum aggregate amount of borrowings that was outstanding under all Line of Credit Loans plus all Working Capital Loans at any time prior to a

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date on which this Warrant is exercised exceeded $12,500,000, the Per Share Exercise Price in effect on any such date that this Warrant is exercised shall be automatically reduced for purposes of such exercise by an amount determined according to the following formula:

X	=	(Y - $12,500,000)(Z)
		$1,000,000

where,

X =	the amount by which the Per Share Exercise Price shall be reduced;
Y =	the maximum aggregate amount of borrowings that was outstanding under all Line of Credit Loans plus all Working Capital Loans at any time prior to such exercise date; and
Z =	the Maximum Borrowings Reduction Multiplier then in effect;

provided, however, that the maximum amount by which the Per Share Exercise Price shall be so reduced with respect to any exercise of this Warrant in accordance with the foregoing shall be $0.15000 (which maximum amount shall be proportionately adjusted from time to time concurrently with the adjustment of the Maximum Borrowings Reduction Multiplier pursuant to Section 6), and if the Per Share Exercise Price as so reduced would be less than $0.01000, then the Per Share Exercise Price as so reduced shall be deemed to be $0.01000; and provided, further, that if the maximum aggregate amount of borrowings that was outstanding under all Line of Credit Loans plus all Working Capital Loansat any time prior to a date on which this Warrant is exercised did not exceed $12,500,000, then no adjustment to the Per Share Exercise Price pursuant to this Section 8 shall be made with respect to such exercise on such date.  On the date of any exercise of this Warrant, Holder shall deliver to the Company a statement derived from its internal books and records setting forth the maximum aggregate amount of borrowings that was outstanding under all Line of Credit Loans plus all Working Capital Loans at any time prior to such exercise date.

9.Notice of Adjustments.  Whenever the Per Share Exercise Price or the number of shares of Common Stock purchasable upon the exercise of this Warrant is required to be adjusted, as provided herein (other than pursuant to Section 8 hereof), the Company shall promptly, but in no event later than five (5) Trading Days thereafter, give a written notice to Holder setting forth the Per Share Exercise Price and number of shares of Common Stock which may be purchased upon exercise of this Warrant after such adjustment(s) and setting forth a reasonably detailed statement of the facts requiring such adjustment(s) and the Company’s computations of such adjustment(s).  Failure to deliver such notice shall not affect the legality or validity of any such adjustment(s) or the obligations of the Company with respect thereto.

10.Notice to Holder Prior to Certain Actions; Certain Rights.  If, at any time after the Issuance Date, (i) the Company declares a dividend or other distribution on its Common Stock or authorizes the granting to the holders of its Common Stock of rights or warrants to subscribe for or purchase any share of any class or any other rights or warrants, (ii) the Board of Directors of the Company authorizes any reclassification of the Common Stock (other than a subdivision or combination of its outstanding Common Stock), or any Corporate Transaction for which approval of any stockholders of the Company is required, or the sale or transfer of all or substantially all of the assets of the Company or (iii) there shall be pending the voluntary or

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involuntary dissolution, liquidation or winding-up of the Company, then, in any such case, the Company shall give Holder, as promptly as practicable but in any event at least ten (10) Trading Days prior to the applicable date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution or grant, or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distribution or grant are to be determined, or (y) the date on which such Corporate Transaction, dissolution, liquidation or winding-up is expected to become effective or occur, and the date as of which it is expected that holders of Common Stock of record who shall be entitled to exchange their Common Stock for securities or other property deliverable upon such Corporate Transaction, dissolution, liquidation or winding-up, if applicable, shall be determined.  In the case of any such action of which the Company gives such notice to Holder or is required to give such notice to Holder, Holder shall be entitled to give a subscription form to exercise this Warrant in whole or in part that is contingent on the completion of such action.

11.Further Assurances.   Subject to the terms of this Warrant, the Company shall take all reasonable action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock (or Other Securities) on the exercise of all or any portion of this Warrant from time to time outstanding, free from all taxes, liens and charges with respect to the issuance thereof (other than any tax arising by reason of a transfer deemed to occur by the issuance of Common Stock or Other Securities upon exercise of this Warrant to a Person other than Holder).  Without limiting the generality of the foregoing, the Company will (and will cause the Company’s transfer agent and registrar of the Common Stock to) at all times reserve and keep available out of the Company’s authorized but unissued shares of capital stock, solely for issuance and delivery on the exercise of this Warrant, a sufficient number of shares of Common Stock (or Other Securities) to effect the full exercise of this Warrant and the exercise, conversion or exchange of all other Common Stock Equivalents from time to time outstanding, and if at any time the number of authorized but unissued shares of Common Stock (or Other Securities) shall not be sufficient to effect such exercise, conversion or exchange, the Company shall take such action as may be necessary to increase its authorized but unissued shares of Common Stock (or Other Securities) to such number as shall be sufficient for such purposes (including, without limitation, seeking stockholder approval to duly amend the Company’s certificate of incorporation to increase the number of shares of Common Stock authorized for issuance thereunder).

12.Noncircumvention.  The Company shall not, by amendment of its certificate of incorporation or bylaws, through any Corporate Transaction, by any issuance or sale of securities, or by any other voluntary action or omission, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good faith carry out all of the provisions of this Warrant and take all action as may be required to protect and preserve the rights of Holder of this Warrant hereunder.

13.Representations and Warranties.  The Company represents and warrants to Holder that (i) the execution of this Warrant has been duly and validly authorized in accordance with the Company’s Certificate of Incorporation and Bylaws, (ii) no further action, approvals or consents are necessary from any other Person or governmental authority or otherwise to make this Warrant valid and binding upon the Company, (iii) this Warrant has been duly and validly authorized, executed and delivered by the Company and constitutes a legal, valid, binding and

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enforceable agreement of the Company, enforceable against the Company in accordance with its terms, (iv) the Company has reserved a sufficient number of shares of Common Stock to permit this Warrant to be exercised in full as of the date hereof and (v) the shares of Common Stock issuable upon exercise hereof, when so issued in accordance with the terms hereof, will be duly authorized, fully paid, and nonassessable shares of Common Stock.

14.Warrant Register; Transfer and Exchange of Warrant.  The Company shall maintain, at the principal office of the Company (or such other office as it may designate by notice to Holder), a warrant register in which the Company shall record the name and address of Holder, as well as the name and address of each successive owner of this Warrant or any portion hereof.  The Company shall be entitled to treat the Person in whose name this Warrant or any portion hereof is so registered as the sole and absolute owner of thereof for all purposes.  Subject to compliance with Section 19, this Warrant may be assigned or transferred by Holder and such assignment or transfer shall be recorded in the warrant register upon surrender of this Warrant accompanied by appropriate instruments of assignment and transfer in a form reasonably acceptable to the Company, duly executed by Holder.  This Warrant is exchangeable, upon the surrender hereof by Holder, at the principal office of the Company (or such other office as it may designate by notice to Holder) for one or more new Warrants of like tenor representing in the aggregate the right to subscribe for and purchase the number of shares of Common Stock (or Other Securities) which may be purchased hereunder, each of such new Warrants to represent the right to purchase such portion of the shares which may be purchased hereunder as shall be designated by Holder at the time of such surrender.  This Warrant shall inure to the benefit of the successors of Holder and, upon transfer hereof in accordance with the terms hereof, the assigns of Holder.

15.Replacement of Warrant.  On receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant and (i) in the case of loss, theft or destruction, of indemnity from Holder reasonably satisfactory in form to the Company (and without the requirement to post any bond or other security), or (ii) in the case of mutilation to the extent that this Warrant remains identifiable as this Warrant issued to Holder, upon surrender and cancellation of this Warrant, the Company will execute and deliver to Holder a new Warrant of like tenor without charge to Holder.

16.Remedies.  The Company stipulates that the remedies at law of Holder in the event of any default or threatened default by the Company in the performance of or compliance with any of the terms of this Warrant are not and will not be adequate, and that such terms may be specifically enforced by a decree for the specific performance of any agreement contained herein or by an injunction against a violation of any of the terms hereof or otherwise without the requirement to post a bond or other security.

17.No Rights or Liabilities as a Stockholder.  This Warrant shall not entitle Holder to any rights or liabilities as a stockholder of the Company.

18.Notices, etc.  Except as otherwise specifically provided herein, any notice herein required or permitted to be given shall be given in writing, may be personally served and shall be deemed effectively given (i) upon receipt, if personally served or delivered by courier or by recognized overnight air carrier, (ii) upon transmission, if sent by facsimile transmission, or (iii) 

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three days after being deposited in the United States mail, certified, with postage pre-paid and properly addressed, if sent by United States mail.  For the purposes hereof, the address and facsimile transmission number of Holder shall be as furnished by Holder for such purpose and shown on the records of the Company, the address of the Company shall be the Company’s principal executive offices in the United States and the facsimile number for the Company shall be as set forth on the signature page hereof.  Holder or the Company may change its address or facsimile number for notice by service of written notice to the other as herein provided.

19.Transfer Restrictions; Legend.  Neither this Warrant nor the shares of Common Stock issuable upon exercise of this Warrant have been registered under the Securities Act or qualified or registered under any applicable state securities laws.  Neither this Warrant nor the shares of Common Stock issuable upon exercise of this Warrant may be sold, pledged, transferred or otherwise disposed of in the absence of an effective registration statement or an available exemption from, or in a transaction not subject to, the registration requirements of the Securities Act as evidenced by a legal opinion of counsel reasonably satisfactory to the Company to the effect that such registration is not required, and otherwise in compliance with any applicable state securities laws; provided, however, that no such legal opinion shall be required upon an assignment, transfer or other disposition of this Warrant or the shares of Common Stock issuable upon exercise of this Warrant by Holder to any Affiliate thereof (which Affiliate status shall be certified to the Company by Holder, in writing, prior to such assignment, transfer or other disposition).  The Company shall cooperate in good faith, at its sole expense, with any reasonable and customary requests by Holder for information regarding the Company or other assistance in connection with the delivery of any legal opinion referenced herein.  Until resold pursuant to an effective registration statement under the Securities Act, or, in the absence of such registration, until sales are permitted under Rule 144 of the Securities Act without volume or manner of sale restriction as evidenced by a legal opinion of counsel reasonably satisfactory to the Company to such effect, certificates evidencing the Common Stock issued upon any exercise of this Warrant shall bear the following legend:

THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR QUALIFIED OR REGISTERED UNDER ANY APPLICABLE STATE SECURITIES LAWS.  SUCH SECURITIES MAY NOT BE SOLD, PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933 AS EVIDENCED BY A LEGAL OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED.

20.Amendment; Waiver.  This Warrant and any terms hereof may be changed, waived, discharged or terminated only by a subsequent written instrument signed by the Company and Holder.

21.Miscellaneous.  This Warrant shall be governed as to all matters by the internal laws of the State of Delaware, without regard to the principles of conflict of laws.  The headings and captions in this Warrant are for purposes of reference only, and shall not limit or otherwise

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affect any of the terms hereof.  The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.  Each party hereto hereby submits to the exclusive jurisdiction of the state and federal courts residing in the State of Delaware with respect to the maintenance and resolution of any claims arising hereunder or related hereto.  All references herein to this Warrant or to any terms hereof, including all references to the Per Share Exercise Price, shall refer at all times to this Warrant and such terms as they may be from time to time be supplemented, amended or adjusted in accordance with the terms of this Warrant.  Any adjustments to the Per Share Exercise Price as provided herein shall be calculated and stated to the fifth (5th) decimal place.

22.Attorneys’ Fees.  In any litigation, arbitration or court proceeding between the Company and Holder relating hereto, the prevailing party shall be entitled to recover its reasonable attorneys’ fees and expenses and all costs of such proceeding.

IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed and delivered on its behalf by one of its officers thereunto duly authorized.

Dated:  June 30, 2009	KEMET CORPORATION
	By:	/s/ William M. Lowe, Jr.
		Name: William M. Lowe, Jr.
		Title:
		Facsimile No. for notices:

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Exhibit 1

FORM OF SUBSCRIPTION

KEMET CORPORATION

(To be signed and delivered only on exercise of Warrant)

TO:	KEMET Corporation
	2835 KEMET Way
	Simpsonville, South Carolina  29681
	Attention:  Chief Financial Officer
	Facsimile No.:  (864) 228-4161
	E-Mail: billlowe@kemet.com

1.The undersigned Holder of the attached Warrant hereby elects to exercise its purchase right under such Warrant to purchase shares of Common Stock of KEMET Corporation, a Delaware corporation (the “Company”) as follows (check one or more, as applicable):

oto exercise the Warrant to purchase                      shares of Common Stock and to pay the Exercise Price therefor by wire transfer of United States funds to the account of the Company, which transfer has been made prior to or as of the date of delivery of this Form of Subscription pursuant to the instructions of the Company;

oto exercise the Warrant to purchase                      shares of Common Stock and to pay the Exercise Price therefor by cancelling $                                 of outstanding indebtedness owed by the Company to Holder, which cancellation shall be deemed effective simultaneously with the delivery of this Form of Subscription by Holder;

and/or

oto exercise the Warrant with respect to                          shares of Common Stock pursuant to the net exercise provisions specified in Section 2(c) of the Warrant.

2.Please issue a stock certificate or certificates representing the appropriate number of shares of Common Stock in the name of the undersigned or in such other name(s) as is specified below:

Name:

Address:

SSN or TIN:

	Dated:
(Signature must conform exactly to name of Holder as specified on the face of the Warrant)

EX-10.2

Exhibit 10.2

EXECUTION COPY

INVESTOR RIGHTS AGREEMENT

THIS INVESTOR RIGHTS AGREEMENT, dated as of June 30, 2009 (this “Agreement”), is entered into by and between KEMET Corporation, a Delaware corporation (the “Company”), and K Financing, LLC, a Delaware limited liability company (“Investor”).

A.The Company and Investor are parties to that certain Amended and Restated Credit Agreement, dated as of June 7, 2009, as amended (the “Credit Agreement”), pursuant to which Investor agreed to extend certain credit to the Company on the terms and conditions set forth therein.

B.The Company is, concurrently with its execution and delivery hereof, issuing to Investor a warrant initially exercisable to purchase up to Eighty Million Five Hundred Forty-Four Thousand Six Hundred Eighty-Five (80,544,685) shares of Common Stock on the terms and conditions set forth therein (the “Closing Warrant”).

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Investor hereby agree as follows:

Section 1.  Definitions.

1.1.  Defined Terms.  As used in this Agreement, the following terms shall have the meanings indicated:

“Affiliate” means, when used with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

“Agreement” has the meaning set forth in the preamble hereto.

“Board of Directors” means the board of directors of the Company.

“Business Day” means any day other than a Saturday, Sunday or any day on which commercial banks in the City of New York are authorized or required by law to remain closed.

“Closing Warrant” has the meaning set forth in Recital B.

“Common Stock” means the common stock, par value $0.01 per share, of the Company and any securities of the Company or successor of the Company into which such common stock is reclassified or reconstituted or into which such stock is converted or otherwise exchanged in connection with a combination of shares, recapitalization, merger, sale of assets, consolidation or other reorganization or otherwise.

“Company” has the meaning set forth in the preamble and shall include the Company’s successors by merger, acquisition, reorganization or otherwise.

“Control” means, as to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by contract or otherwise, and the terms “Controlling” and “Controlled” shall have meanings correlative thereto.

“Credit Agreement” has the meaning set forth in Recital A.

“Demand Registration” has the meaning set forth in Section 2.1(a).

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and any successor thereto, and any rules and regulations promulgated thereunder, all as the same shall be in effect from time to time.

“FINRA” means the Financial Industry Regulatory Authority, Inc.

“Governmental Authority” means any federal, state, local or foreign (whether civil, criminal, military or otherwise) court, central bank or governmental agency, tribunal, authority, instrumentality or regulatory body or any subdivision thereof or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

“Information” has the meaning set forth in Section 4.4.

“Investor” has the meaning set forth in the preamble hereto.

“Legal Requirements” means, as to any Person, the Organizational Documents of such Person, and any treaty, law (including the common law), statute, ordinance, code, rule, regulation, order or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

“Loss” has the meaning set forth in Section 2.7(a).

“Observer” has the meaning set forth in Section 3.1.

“Organizational Documents” means, with respect to any Person that is not a natural person, (i) in the case of any corporation, the certificate of incorporation and by-laws (or similar documents) of such Person, (ii) in the case of any limited liability company, the certificate of formation and operating agreement (or similar documents) of such Person, (iii) in the case of any limited partnership, the certificate of formation and limited partnership agreement (or similar documents) of such Person, (iv) in the case of any general partnership, the partnership agreement (or similar document) of such Person, (v) in any other case, the functional equivalent of the foregoing, and (vi) any shareholder, voting trust or similar agreement between or among any holders of equity interests of such Person.

“Ownership Percentage” means, as to the Investor as of any time of determination, the percentage obtained by dividing (X) the number of shares of Common Stock acquired by

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Investor upon exercise of the Closing Warrant (and still owned by the Investor), together with the remaining shares of Common Stock (if any) then issuable upon exercise of the Closing Warrant, by (Y) the aggregate number of shares of Common Stock on a fully diluted basis then outstanding.

“Person” means any natural person, firm, limited liability company or partnership, joint venture, corporation, joint stock company, trust or unincorporated organization, incorporated or unincorporated association, government (or any department, agency or political subdivision thereof) or other entity of any kind.

“Piggyback Registration” has the meaning set forth in Section 2.2(a).

“Prospectus” means the prospectus included in any Registration Statement, all amendments and supplements to such prospectus and all material incorporated by reference in such prospectus.

“Registrable Securities” means (i) all shares of Common Stock or other securities issued and issuable upon exercise of the Closing Warrant, and (ii) any shares of Common Stock or other securities that may be issued or distributed or be issuable in respect thereof by way of share split or other distribution, merger, consolidation, exchange offer, recapitalization or reclassification or similar transaction or exercise or conversion or adjustment; provided, however, that any of the foregoing securities shall cease to be “Registrable Securities” to the extent (i) a Registration Statement with respect to the sale of such securities has been declared effective under the Securities Act and such securities have been sold pursuant to such Registration Statement or otherwise or (ii) such securities have been distributed or sold pursuant to Rule 144 (or any similar provision then in force) under the Securities Act.

“registration” means a registration of the Registrable Securities for sale to the public under a Registration Statement.

“Registration Statement” means any registration statement of the Company filed with, or to be filed with, the SEC under the rules and regulations promulgated under the Securities Act, including the Prospectus, amendments and supplements to such registration statement, including post-effective amendments, and all exhibits and all material incorporated by reference in such registration statement.

“Sale Notice” has the meaning set forth in Section 3.2.

“SEC” means the U.S. Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended, and any successor thereto, and any rules and regulations promulgated thereunder, all as the same shall be in effect from time to time.

“Underwritten Offering” means a registration in which securities of the Company are sold to an underwriter or underwriters on a firm commitment basis for reoffering to the public.

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1.2.  General Interpretive Principles.  Whenever used in this Agreement, except as otherwise expressly provided or unless the context otherwise requires, any noun or pronoun shall be deemed to include the plural as well as the singular.  Unless otherwise specified, the terms “hereof,” “herein,” “hereunder” and similar terms refer to this Agreement as a whole (including the exhibits, schedules and disclosure statements hereto), and references herein to Sections refer to Sections of this Agreement.  Any calculation contemplated hereby shall be stated to the fifth (5th) decimal place.

Section 2.  Registration Rights

2.1.Primary Registrations.

(a)Demand Registrations.  Subject to Section 2.1(c), the Company shall use commercially reasonable efforts to file with the SEC, on or before the thirtieth (30th) Business Day following a written request therefor by Investor (a “Demand Registration”), a Registration Statement on an appropriate registration form of the SEC relating to the offer and sale of Registrable Securities by Investor in amounts and in accordance with the methods of distribution elected by Investor (which may include a request for an offering to be made on a continuous or delayed basis pursuant to Rule 415 under the Securities Act, or any similar rule that may be adopted by the SEC, and which may, but need not, be for an Underwritten Offering) and shall use commercially reasonable efforts to cause such Registration Statement to be declared effective under the Securities Act as promptly thereafter as possible.  Notwithstanding the foregoing, the Company shall not be required to effect more than three (3) Demand Registrations.  If the offering is to be an Underwritten Offering, Investor shall have the right to select the managing underwriter or underwriters for any such Underwritten Offering and the price, underwriting discount and other financial terms for the such Underwritten Offering shall be determined by Investor.

(b)Effectiveness.  Subject to Section 2.1(c), the Company shall use commercially reasonable efforts to keep the Registration Statement effective for one hundred eighty (180) days following the date on which such Registration Statement has been declared effective under the Securities Act; provided, that such 180-day period shall be extended, on a day-for-day basis, for any days on which the use of the Registration Statement is suspended by the Company pursuant to Section 2.1(c).

(c)Suspension of Registration.  If the filing, initial effectiveness or continued use of the Registration Statement at any time would require the Company to make public disclosure of material non-public information, which disclosure in the good faith judgment of the Board of Directors after consultation with counsel to the Company would not be required to be made at such time but for the filing, effectiveness or use of the Registration Statement, and would be substantially detrimental to the Company or its business, or to the Company’s ability to effect a material acquisition, disposition or financing, the Company may, upon giving prompt written notice of such action to Investor, delay the filing or initial effectiveness of, or suspend use of, the Registration Statement; provided, however, that the Company shall not be permitted to do so (i) more than two (2) times during any six (6) month period, (ii) for a period exceeding forty-five (45) days on any one occasion or (iii) for an aggregate period exceeding ninety (90) days in any twelve (12) month period.  In the event the Company exercises its rights under the

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preceding sentence, Investor agrees to suspend, immediately upon receipt of the notice referred to above, the use of the Prospectus relating to the Registration in connection with any sale or offer to sell Registrable Securities. The Company shall promptly (and in any event within one (1) Business Day) notify Investor upon the expiration of any period during which it exercised its rights under this Section 2.1(c).

2.2.  Piggyback Registrations.

(a)Participation.  If the Company at any time proposes to file a Registration Statement with respect to any offering of Common Stock for its own account or for the account of any holders of Common Stock (other than (i) a registration under Section 2.1, (ii) a registration on Form S-4 or S-8 or any successor form to such forms or (iii) a registration of securities solely relating to an offering and sale pursuant to any employee stock plan or other employee benefit plan arrangement), then, not less than twenty (20) days prior to the proposed date of filing such Registration Statement, the Company shall give written notice of such proposed filing to Investor, and shall, subject to Section 2.2(b), include in such Registration Statement all such Registrable Securities as Investor requests be included therein within twenty (20) days after the receipt of such notice (a “Piggyback Registration”).  The Company may elect not to proceed with any proposed Piggyback Registration or to delay any proposed Piggyback Registration at any time by written notice to Investor, and Investor may withdraw all or part of its Registrable Securities from a Piggyback Registration at any time.  If the offering pursuant to a Piggyback Registration is to be an Underwritten Offering, then Investor must, and the Company shall make such arrangements with the underwriters so that Investor may, participate in such Underwritten Offering on the same terms as the Company and other Persons selling securities in such Underwritten Offering.

(b)Priority of Piggyback Registration.  If the managing underwriter or underwriters of any proposed Underwritten Offering of a class of securities included in a Piggyback Registration informs Investor in writing that, in its or their opinion, the total amount of shares of Registrable Securities that Investor has requested be included in such offering exceeds the number which can be sold in such offering without being likely to have a significant adverse effect on the price, timing or distribution of the securities offered or the market for the Common Stock, then the number of shares of Registrable Securities held by Investor to be included in such registration may be reduced to such number of shares as would not have such adverse effect, provided, however, that if the number of Registrable Securities to be sold by Investor in any offering provided for in this Section 2.2 has been cut back by the underwriter(s), then (x) if such offering is an offering for the Company’s own account, no other Person shall be permitted to include any shares in such registration and (y) if such offering is an offering for the account of another Person, neither the Company nor any other Person shall be permitted to include any shares in such registration.

(c)Effect on Piggyback Registration Obligation.  The provisions of this Section 2.2 shall apply whether or not the Company has filed and is maintaining the effectiveness of a Registration Statement under Section 2.1.

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2.3.  Registration Procedures.

(a)In connection with the Company’s registration obligations in this Agreement, the Company will, subject to the limitations set forth herein, use commercially reasonable efforts to effect any such registration so as to permit the sale of the applicable Registrable Securities in accordance with the intended method or methods of distribution thereof as expeditiously as reasonably practicable, and in connection therewith the Company will use commercially reasonable efforts to:

(1)furnish to Investor and to the underwriter or underwriters, if any, before filing a Registration Statement or Prospectus, or any amendments or supplements thereto and in connection therewith, copies of all documents prepared to be filed, which documents will be subject to the review of Investor and any underwriter and their respective counsel and not file any Registration Statement or Prospectus or amendments or supplements thereto to which Investor or any underwriter shall reasonably object, after consultation with legal counsel;

(2)prepare and file with the SEC such amendments or supplements to the applicable Registration Statement or Prospectus as may be reasonably requested by Investor or any underwriter after consultation with legal counsel or as may be necessary to keep such registration effective for the period of time required by this Agreement;

(3)notify Investor and the managing underwriter or underwriters, if any, and confirm such advice in writing, if requested, as soon as reasonably practicable after notice thereof is received by the Company (A) when the applicable Registration Statement or any amendment thereto has been filed or becomes effective and when the applicable Prospectus or any amendment or supplement thereto has been filed, (B) of any written comments by the SEC or any request by the SEC or any other federal or state governmental authority for amendments or supplements to such Registration Statement or Prospectus or for additional information, (C) of the issuance by the SEC of any stop order suspending the effectiveness of such Registration Statement or any order preventing or suspending the use of any preliminary or final Prospectus or the initiation or threat of any proceedings for such purposes and (D) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Securities for offering or sale in any jurisdiction or the initiation or threat of any proceeding for such purpose;

(4)promptly notify Investor and the managing underwriter or underwriters, if any, when the Company becomes aware of the happening of any event as a result of which the applicable Registration Statement or Prospectus (as then in effect) contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein (in the case of the Prospectus and any preliminary Prospectus, in light of the circumstances under which they were made) not misleading or, if for any other reason it shall be necessary to amend or supplement such Registration Statement or Prospectus in order to comply with the Securities Act and, in either case as promptly as reasonably practicable thereafter, prepare and file with the SEC an amendment or supplement to such Registration Statement or Prospectus which will correct such statement or omission or effect such compliance;

(5)make every reasonable effort to prevent or obtain as soon as possible the withdrawal of any stop order with respect to the applicable Registration Statement or other order suspending the use of any preliminary or final Prospectus;

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(6)promptly incorporate in a Prospectus supplement or post-effective amendment to the applicable Registration Statement such information as Investor or the managing underwriter or underwriters, if any, agree should be included therein relating to the plan of distribution with respect to the Registrable Securities, and make all required filings of such Prospectus supplement or post-effective amendment as soon as reasonably practicable after being notified of the matters to be incorporated in such Prospectus supplement or post-effective amendment;

(7)furnish to Investor and to each managing underwriter, if any, without charge, such reasonable number of copies of the applicable Registration Statement, Prospectus (including each preliminary Prospectus) and such other documents as Investor or such managing underwriter may reasonably request in order to facilitate the disposition of the Registrable Securities by Investor or such underwriter;

(8)on or prior to the date on which the applicable Registration Statement is declared effective, use commercially reasonable efforts to register or qualify such Registrable Securities for offer and sale under the securities or “blue sky” laws of each state and other jurisdiction of the United States, as Investor or any underwriter, or their respective counsel, reasonably requests in writing, and do any and all other acts or things reasonably necessary or advisable to keep such registration or qualification in effect so as to permit the commencement and continuance of sales and dealings in such jurisdictions for so long as may be necessary to complete the distribution of Registrable Securities covered by the Registration Statement, it being understood that the Company will not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or to take any action which would subject it to taxation or general service of process in any such jurisdiction where it is not then so subject;

(9)cooperate with Investor and the managing underwriter, underwriters or agent, if any, to facilitate the timely preparation and delivery of certificates, if applicable, representing Registrable Securities to be sold and not bearing any restrictive legends;

(10)not later than the effective date of the applicable Registration Statement, provide a CUSIP number for all Registrable Securities and provide, if requested by Investor, the applicable transfer agent with printed certificates for the Registrable Securities which certificates shall be in a form eligible for deposit with The Depository Trust Company;

(11)obtain for delivery to Investor and to the underwriter or underwriters, if any, an opinion or opinions from counsel for the Company dated the effective date of the Registration Statement or, in the event of an Underwritten Offering, the date of the closing under the underwriting agreement, in customary form, scope and substance, which counsel and opinions shall be reasonably satisfactory to Investor and such underwriter or underwriters, if any, and their respective counsel;

(12)in the case of an Underwritten Offering, obtain for delivery to the Company and the underwriter or underwriters, if any, with copies to Investor, a comfort letter from the Company’s independent registered public accounting firm in customary form and covering such matters of the type customarily covered by comfort letters as the managing

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underwriter or underwriters reasonably request, dated the date of execution of the underwriting agreement and brought down to the closing under the underwriting agreement;

(13)cooperate with Investor and each underwriter or agent, if any, participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with FINRA;

(14)use commercially reasonable efforts to comply with all applicable rules and regulations of the SEC;

(15)provide and cause to be maintained a transfer agent and registrar for all Registrable Securities covered by the applicable Registration Statement from and after a date not later than the effective date of such Registration Statement;

(16)cause all Registrable Securities of a class covered by the applicable Registration Statement to be listed on each securities exchange on which any of the Company’s securities of such class are then listed or quoted and on each inter-dealer quotation system on which any of the Company’s securities of such class are then quoted;

(17)make available upon reasonable notice at reasonable times and for reasonable periods for inspection by Investor, by any managing underwriter or underwriters participating in any disposition to be effected pursuant to such Registration Statement and by any attorney, accountant or other agent or representative retained by Investor or any such managing underwriter, all pertinent financial and other records, documents and properties of the Company, and cause all of the Company’s officers, directors and employees and the independent registered public accounting firm that has certified the Company’s financial statements to make themselves available to discuss the business of the Company and to supply all information reasonably requested by Investor or any such underwriter, attorney, accountant or agent in connection with such Registration Statement as shall be necessary to enable them to exercise their due diligence responsibility (subject to the entry by each party referred to in this clause (17) into customary confidentiality agreements in a form reasonably acceptable to the Company); and

(18)in the case of an Underwritten Offering, cause the senior executive officers of the Company to participate in such customary “road show” presentations as may be reasonably requested by the managing underwriter(s) in any such Underwritten Offering and otherwise to facilitate, cooperate with, and participate in each proposed offering contemplated herein and customary selling efforts related thereto.

(b)Investor shall furnish the Company with such information regarding the distribution of any Registrable Securities and such other information relating to Investor and its ownership of the applicable Registrable Securities as the Company may from time to time reasonably request to enable the Company to comply with the provisions of this Agreement.

(c)Investor agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 2.3(a)(4), Investor will discontinue disposition of its Registrable Securities pursuant to such Registration Statement until Investor receives the supplemented or amended Prospectus contemplated by Section 2.3(a)(4), or until Investor is advised in writing by the Company that the use of the Prospectus may be resumed,

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and has received any additional or supplemental filings that are incorporated by reference in the Prospectus.

2.4.  Underwritten Offerings.  If requested by the underwriters for any Underwritten Offering pursuant to Section 2.1 or 2.2, the Company and Investor shall enter into an underwriting agreement with such underwriters, such agreement to be reasonably satisfactory in substance and form to the Company, Investor and the underwriters, and to contain such customary terms and conditions in agreements of that type, including, without limitation, indemnities no less favorable to the recipient thereof than those provided in Section 2.7.  Investor shall not be required in any such underwriting agreement to make any representations or warranties to or agreements with the Company or the underwriters other than representations, warranties or agreements regarding Investor, Investor’s Registrable Securities, Investor’s intended method of distribution and any other representations required by law.

2.5.  No Inconsistent Agreements; Additional Rights.  The Company will not enter into, and is not currently a party to, any agreement which is, or could with the passage of time be, inconsistent with the rights granted to Investor under this Agreement.

2.6.  Registration Expenses.  In connection with any registration under this Agreement of Registrable Securities, the Company shall pay (i) all registration and filing fees and any other fees and expenses associated with filings required to be made with the SEC or FINRA, (ii) all fees and expenses of compliance with state securities or “blue sky” laws, (iii) all printing, duplicating, word processing, messenger, telephone, facsimile and delivery expenses (including expenses of printing certificates for the Registrable Securities in a form eligible for deposit with The Depository Trust Company and of printing prospectuses), (iv) all fees and disbursements of counsel for the Company and of all independent registered public accounting firms of the Company, (v) all premiums for Securities Act liability insurance or similar insurance if the Company so desires or the underwriter or underwriters, if any, so require in accordance with then-customary underwriting practice, (vi) all fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange or the quotation of the Registrable Securities on any inter-dealer quotation system or the over-the-counter bulletin board, (vii) all internal Company expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), (viii) all fees and expenses of any special experts retained by the Company and (ix) reasonable fees and disbursements (such fees and disbursements not to exceed $45,000 in the aggregate per each Demand Registration and Piggyback Registration; provided that the Company shall not be required to pay any such fees and disbursements with respect to more than three (3) of Registration Statements, combined) of one law firm or other counsel to Investor.  The Company shall not be required to pay any fees or expenses of counsel to the underwriters (other than on a pro rata basis with respect to shares (if any) offered for the Company’s account.  Underwriting discounts and commissions and transfer taxes attributable to the sale of Registrable Securities shall be paid by Investor.

2.7.  Indemnification.

(a)Indemnification by the Company.  The Company shall indemnify and hold harmless, to the fullest extent permitted by law, Investor and Investor’s officers, directors, advisors, agents, representatives and employees and each Person who controls (within the

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meaning of the Securities Act or the Exchange Act) such Persons from and against any and all losses, claims, damages, liabilities (or actions or proceedings in respect thereof) and expenses (including reasonable costs of investigation and legal expenses), joint or several (each, a “Loss” and collectively “Losses”), arising out of or based upon (i) any untrue or alleged untrue statement of a material fact contained in any Registration Statement under which such Registrable Securities were registered under the Securities Act (including any final, preliminary or summary Prospectus contained therein or any amendment thereof or supplement thereto or any documents incorporated by reference therein) or (ii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of a Prospectus or preliminary Prospectus, in light of the circumstances under which they were made) not misleading; provided, however, that the Company shall not be liable to any indemnified party in any such case to the extent, but only to the extent, that any such Loss arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in any such Registration Statement in reliance upon and in conformity with written information furnished to the Company, expressly for use in the preparation of such Registration Statement, by Investor, its Affiliates, any underwriter selected by Investor, any Controlling Person of Investor, or any selling brokers, dealer managers and similar securities industry professionals engaged by Investor in connection with such Registration Statement.  This indemnity shall be in addition to any liability the Company may otherwise have.  Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of Investor or any indemnified party and shall survive the transfer of such securities by Investor.  The Company shall also provide customary indemnities, if applicable and if requested, to any underwriters, selling brokers, dealer managers and similar securities industry professionals participating in any distribution pursuant hereto, their officers and directors and each Person who Controls such Persons (within the meaning of the Securities Act and the Exchange Act).

(b)Indemnification by Investor.  Investor shall indemnify and hold harmless, to the fullest extent permitted by law, the Company, its directors and officers and each Person who controls the Company (within the meaning of the Securities Act and the Exchange Act) from and against any Losses arising out of or based upon (i) any untrue or alleged untrue statement of a material fact contained in any Registration Statement under which such Registrable Securities were registered under the Securities Act (including any final, preliminary or summary Prospectus contained therein or any amendment thereof or supplement thereto or any documents incorporated by reference therein) or (ii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of a Prospectus or preliminary Prospectus, in light of the circumstances under which they were made) not misleading, in each case to the extent, but only to the extent, that such untrue statement or omission had been contained in any information furnished in writing by Investor, its Affiliates, any underwriter selected by Investor, any Controlling Person of Investor, or any selling brokers, dealer managers and similar securities industry professionals engaged by Investor in connection therewith, to the Company specifically for inclusion in such Registration Statement.  This indemnity shall be in addition to any liability Investor may otherwise have.  Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Company or any indemnified party and shall survive the transfer of such securities by Investor.  In no event shall the liability of Investor hereunder be greater in amount than the dollar amount of the proceeds received by Investor upon the sale of the Registrable Securities giving rise to such indemnification obligation.  Investor shall also provide customary

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indemnities, if applicable and if requested, to any underwriters of the Registrable Securities, their officers and directors and each Person who controls such underwriters (within the meaning of the Securities Act).

(c)Conduct of Indemnification Proceedings.  Any Person entitled to indemnification hereunder will (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided, however, that any delay or failure to so notify the indemnifying party shall relieve the indemnifying party of its obligations hereunder only to the extent, if at all, that the indemnifying party is actually and materially prejudiced by reason of such delay or failure) and (ii) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party; provided, however, that any Person entitled to indemnification hereunder shall have the right to select and employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such Person unless (A) the indemnifying party has agreed in writing to pay such fees or expenses, (B) the indemnifying party shall have failed to assume the defense of such claim within a reasonable time after having received notice of such claim from the Person entitled to indemnification hereunder and to employ counsel reasonably satisfactory to such Person, (C) in the reasonable judgment of any such Person, based upon advice of its counsel, a conflict of interest exists between such Person and the indemnifying party with respect to such claims or (D) the indemnified party has reasonably concluded (based on advice of counsel) that there may be legal defenses available to it or other indemnified parties that are different from or in addition to those available to the indemnifying party (in which case, if the Person notifies the indemnifying party in writing that such Person elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such claim on behalf of such Person).  If such defense is not assumed by the indemnifying party, the indemnifying party will not be subject to any liability for any settlement made without its consent, but such consent may not be unreasonably withheld; provided, however, that an indemnifying party shall not be required to consent to any settlement involving the imposition of equitable remedies or involving the imposition of any material obligations on such indemnifying party other than financial obligations for which such indemnified party will be indemnified hereunder.  If the indemnifying party assumes the defense, the indemnifying party shall have the right to settle such action without the consent of the indemnified party; provided, however, that the indemnifying party shall be required to obtain such consent if the settlement includes any admission of wrongdoing on the part of the indemnified party or any restriction on the indemnified party or its officers or directors.  No indemnifying party shall consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to each indemnified party of an unconditional release from all liability in respect to such claim or litigation.  The indemnifying party or parties shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees, disbursements and other charges of more than one separate firm (together with one firm of local counsel) at any one time from all such indemnified party or parties unless (x) the employment of more than one counsel has been authorized in writing by the indemnifying party or parties (y) a conflict or potential conflict exists or may exist (based on advice of counsel to an indemnified party) between such indemnified party and the other indemnified parties or (z) an indemnified party has reasonably concluded (based on advice of counsel) that there may be legal defenses available to it that are different from or in addition to those available to the other indemnified parties,  in each

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of which cases the indemnifying party shall be obligated to pay the reasonable fees and expenses of such additional counsel or counsels.

(d)Contribution.  If for any reason the indemnification provided for in paragraphs (a) and (b) of this Section 2.7 is unavailable to an indemnified party or insufficient to hold it harmless as contemplated by paragraphs (a) and (b) of this Section 2.7, then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such Loss in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and the indemnified party on the other.  The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying party or the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission.  Notwithstanding anything in this Section 2.7(d) to the contrary, Investor shall not be required pursuant to this Section 2.7(d) to contribute any amount in excess of the amount by which the net proceeds received by Investor from the sale of Registrable Securities in the offering to which the Losses of the indemnified parties relate exceeds the amount of any damages which such indemnifying party has otherwise been required to pay by reason of such untrue statement or omission.  The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 2.7(d) were determined by any method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph.  No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.  If indemnification is available under this Section 2.7, the indemnifying parties shall indemnify each indemnified party to the full extent provided in Sections 2.7(a) and 2.7(b) hereof without regard to the relative fault of said indemnifying parties or indemnified party.

(e)Notwithstanding the foregoing, to the extent that the provisions regarding indemnification and contribution contained in any underwriting agreement entered into among the Company, Investor and one or more underwriters in connection with an Underwritten Offering are in conflict with the foregoing provisions, the provisions in such underwriting agreement shall control.

2.8.  Rule 144.  The Company shall file the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder and shall take such further action as Investor may reasonably request, all to the extent required from time to time to enable Investor to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 under the Securities Act, as such Rules may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC.

Section 3.  Certain Covenants.

3.1.  Board Observers.  Investor shall have the right, upon written notice to the Company, to appoint up to three (3) representatives (each an “Observer” and collectively the “Observers”) who shall, subject to any redactions or restrictions imposed which are reasonably necessary to

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preserve attorney-client privilege (provided that a brief general description of the redacted or restricted information is provided in lieu thereof), (i) receive written notice of all meetings (both regular and special) of the Board of Directors, such notice to be delivered at the same time as notice is given to the members of the Board of Directors, (ii) be entitled to attend (or, in the case of telephone meetings, monitor) all such meetings of the Board of Directors, (iii) receive all notices, information and reports which are furnished to the members of the Board of Directors at the same time and in the same manner as the same is furnished to such members, (iv) be entitled to participate in all discussions conducted at such meetings and (v) receive as soon as available (but in any event prior to the next succeeding meeting of the Board of Directors) copies of the minutes of all such meetings; provided, however, that Investor’s right to appoint Observers to the Board of Directors (and the rights and privileges of such Observers under this Section 3.1) shall be limited to (x) two (2) Observers in the event that Investor’s Ownership Percentage is less than thirty percent (30%) but greater than or equal to twenty percent (20%), (y) one (1) Observer in the event that Investor’s Ownership Percentage is less than twenty percent (20%) but greater than or equal to ten percent (10%) and (z) no Observers in the event that Investor’s Ownership Percentage is less than ten percent (10%).  If any action is proposed to be taken by the Board of Directors by written consent in lieu of a meeting, the Company will use reasonable efforts to give written notice thereof to such Observers, which notice shall describe in reasonable detail the nature and substance of such proposed action and shall be delivered at the same time as notice is given to the members of the Board of Directors and the Company will furnish such Observers with copies of each such written consent no later than five (5) Business Days after it has been signed by its last signatory.  Any such Observers shall not constitute members of the Board of Directors and shall not be entitled to vote on any matters presented at meetings of the Board of Directors or to consent to any matter as to which the consent of the Board of Directors shall have been requested.

3.2.  Preemptive Rights.

(a)Subject to Section 3.2(b), in connection with any proposed issuance or sale by the Company of any shares of Common Stock, or any securities exercisable for or convertible into shares of Common Stock, the Company shall offer to sell to Investor a pro rata portion of such securities equal to the percentage determined by dividing (x) the sum of (i) the number of shares of Common Stock then held by Investor plus (ii) the number of shares of Common Stock then issuable upon exercise (on a cash basis) of the Closing Warrant by (y) the number of shares of Common Stock then outstanding on a fully diluted basis.  Investor shall be entitled to purchase all or part of such securities at the same price and on the same terms as such securities are to be offered to any other Persons.  The Company shall provide written notice to Investor at least ten (10) Business Days prior to the consummation of any sale of securities to which the rights granted under this Section 3.2 apply (a “Sale Notice”), which Sale Notice shall describe in reasonable detail the securities being offered (including, without limitation, the amount of such securities being offered), the purchase price payable therefor, the payment terms thereof, Investor’s pro rata portion thereof, and any other materials with respect to such securities and the offering thereof.  Investor shall be entitled to exercise its preemptive rights and purchase securities under and in accordance with this Section 3.2 at any time within ten (10) Business Days after its receipt of the Sale Notice from the Company by delivering written notice thereof to the Company.  Upon the expiration of such ten (10) Business Day period, the Company shall be free to sell such securities which Investor has not elected to purchase during the ninety (90) day

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period following such expiration on terms and conditions no more favorable to the purchasers thereof than those offered to Investor pursuant to the Sale Notice.  Any securities offered or sold by the Company after such ninety (90) day period must be reoffered to Investor pursuant to the terms of this Section 3.2.

(b)The provisions of Section 3.2(a) shall not apply to: (i) the issuance of securities in connection with subdivisions of the securities of the Company, share splits or dividends; (ii) the issuance of securities to employees, officers, consultants, members of management or directors of the Company as compensation pursuant to any equity incentive or stock purchase plans; (iii) the issuances of Common Stock upon the exercise or conversion of any securities outstanding on the date of this Agreement (including, without limitation, the Closing Warrant); (iv) the issuance of securities in connection with any acquisition, amalgamation, merger, joint venture or similar transactions; or (v) the issuance of any other securities contemplated by this Agreement.

3.3.  Certain Information.  The Company shall furnish to Investor (i) as soon as available and in any event within 90 days after the end of each fiscal year (but no later than the date on which the Company would be required to file a Form 10-K under the Exchange Act if it were subject to Section 15 and 13(d) of the Exchange Act), audited consolidated financial statements of the Company for such fiscal year, (ii) as soon as available and in any event within 45 days after the end of each of the first three fiscal quarters of each fiscal year (but no later than the date on which the Company would be required to file a Form 10-Q under the Exchange Act if it were subject to Section 15 and 13(d) of the Exchange Act), consolidated financial statements of the Company for each such fiscal quarter, and (iii) promptly after the same become publicly available, copies of all periodic and other reports, proxy statements, notices and other materials or information filed by the Company with the SEC.  Without limiting the generality of the foregoing, Investor acknowledges and agrees that, so long as the Credit Agreement remains in effect, compliance by the Company with the covenants set forth in Section 5.01 of the Credit Agreement shall constitute compliance with this Section 3.3.

3.4.Securities Exchange Listing.  The Company shall use commercially reasonable efforts to cause the Common Stock to be listed for trading on the New York Stock Exchange or any U.S. national securities exchange operated by The NASDAQ Stock Market LLC (or any successor thereto).

3.5.No Impairment of Other Rights.  Nothing in this Section 3 shall be deemed to be to the exclusion of, in lieu of, or otherwise modify or waive any other rights that Investor may have pursuant to applicable law or contract.  Investor’s rights under this Section 3 may be exercised at any time or from time to time in accordance herewith.

Section 4.  Miscellaneous

4.1.Representations and Warranties of the Company.  The Company represents and warrants to Investor as follows: (i) the execution, delivery and performance of this Agreement has been duly authorized by all necessary action on the part of the Company, (ii) this Agreement has been duly executed and delivered by the Company, (iii) this Agreement constitutes a legal, valid and binding obligation of the Company, enforceable in accordance with its terms and (iv) 

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the execution, delivery and performance of this Agreement does not require any material consent or approval of, registration or filing with, or any other action by, any governmental authority or any other Person and will not violate the certificate of incorporation or bylaws of the Company, any law or any material agreement binding upon any Company.

4.2.Representations and Warranties of Investor.  Investor represents and warrants to the Company as follows: (i) the execution, delivery and performance of this Agreement has been duly authorized by all necessary action on the part of Investor, (ii) this Agreement and has been duly executed and delivered by Investor, (iii) this Agreement constitutes a legal, valid and binding obligation of Investor, enforceable in accordance with its terms, (iv) the execution, delivery and performance of this Agreement does not require any material consent or approval of, registration or filing with, or any other action by, any governmental authority or any other Person and will not violate the certificate of incorporation, bylaws or other governance document of Investor, any law or any material agreement binding upon any Investor, (v) Investor is acquiring an interest in the Company for its own account and not on behalf of others, (vi) Investor understands and acknowledges that federal and state securities laws govern and restrict its right to offer, sell, or otherwise dispose of any Common Stock unless the offer, sale or other disposition thereof is registered under the Securities Act and state securities laws, or such offer, sale or other disposition is exempt from registration or qualification thereunder, (vii) Investor represents that it has such knowledge and expertise in financial and business matters that Investor is capable of evaluating the merits and risk of its investment in the Common Stock and (viii) Investor is an “accredited investor” as such term is defined in Rule 501(a) promulgated under the Securities Act.

4.3.Double Trigger Severance Arrangements.  The Company hereby covenants and agrees that if it is a party to or has obligations under any Double Trigger Severance Arrangement (as defined below) with any person, then the Company will not, without prior approval of the Board of Directors, terminate the employment or service of any such person on or after the date hereof in a manner or under circumstances that would cause any additional, increased or modified benefits or payments being required to be made to such officer or director under the applicable Double Trigger Severance Arrangement.  “Double Trigger Severance Arrangement” means any contract, arrangement, agreement or understanding, whether written or oral, between the Company (or any Affiliate thereof) and any officer or director thereof, pursuant to which the issuance of the Closing Warrant or the consummation of any other transactions contemplated by and in the Credit Agreement would constitute a “change of control,” “change in control” or similar event or circumstance regarding the Company (or any Affiliate thereof), and as a result thereof the subsequent termination of such officer or director’s employment with or service to the Company (or any Affiliate thereof) within a specified period thereafter would result in any additional, increased or modified benefits or payments being required to be provided to such officer or director.

4.4.Confidentiality.  Investor agrees to use commercially reasonable efforts to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees, agents, advisors, other representatives and third parties who have a bona fide need to know the same, including without limitation accountants, legal counsel, other advisors and lenders (it being understood that the persons to whom such disclosure is made will be informed of the confidential nature of such

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Information and instructed to keep such Information confidential pursuant to the terms hereof or will otherwise be subject to contractual or other confidentiality restrictions that are no less restrictive than the provisions hereof), (b) to the extent requested by any regulatory authority or any quasi-regulatory authority, (c) to the extent required by applicable Legal Requirements or by any subpoena or similar legal process, (d) in connection with the exercise of any remedies under this Agreement or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder, (e) with the consent of the Company or (f) to the extent such Information (i) is publicly available at the time of disclosure or becomes publicly available other than as a result of a breach of this Section 4.4 or (ii) becomes available to Investor on a nonconfidential basis from a source other than the Company.  For the purposes of this Section 4.4, “Information” shall mean all information received from the Company relating to the Company or any of its subsidiaries or its business that would reasonably be considered to be confidential, other than any such information that is available to Investor on a nonconfidential basis prior to disclosure by the Company.

4.5.Successors, Assigns and Transferees.  This Agreement and the rights of Investor under this Agreement (excluding under Section 3 hereof) may be transferred and assigned by Investor; provided, however, that no such transfer or assignment shall be binding upon or obligate the Company to any such transferee or assignee unless and until the Company shall have received notice of such transfer or assignment as herein provided and a written agreement of the transferee or assignee to be bound by the provisions of this Agreement.  The rights of Investor under Section 3 of this Agreement may not be directly or indirectly transferred or assigned without the prior written consent of the Company; provided, however, that such rights may be transferred or assigned to an Affiliate of Investor without the consent of the Company, subject to compliance with the requirements set forth in the proviso contained in the immediately preceding sentence.  Any purported transfer or assignment of this Agreement and the rights of Investor hereunder in the absence of any consent of the Company required by the immediately preceding sentence shall be deemed to be a transfer and assignment of all rights of Investor under this Agreement excluding under Section 3 hereof, and notwithstanding anything herein to the contrary the assignee shall have no rights under such section.  Any transfer or assignment made other than as provided in the foregoing sentences shall be null and void.  In the event of any such transfer or assignment by Investor, any provisions of this Agreement that requires the approval of Investor, an election by Investor or any similar action on Investor’s part shall be read to require the approval, election or action of the holders of a majority of the then outstanding Registrable Securities.  This Agreement may not be transferred or assigned by the Company without the prior written consent of Investor but, in any case of any successor-in-interest to the Company or any Person other than the Company who is an issuer of Registrable Securities, such successor-in-interest or other issuer, shall assume, jointly and severally with the Company, the rights and duties of the Company hereunder, and in the event of a merger or consolidation of the Company with or into another corporation (or another entity) or the sale of all or substantially all of the Company’s assets (and it shall be a condition to any such merger, consolidation or sale that such successor-in-interest or other issuer assume (in a writing delivered to Investor) all obligations hereunder jointly and severally with the Company as provided herein).  This Agreement shall be binding upon and shall inure to the benefit of the parties hereto, and their respective successors and permitted assigns.

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4.6.  Headings.  The section and paragraph headings contained in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

4.7.  Applicable Law; Submission to Jurisdiction.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware without regard to principles of conflicts of law.  Each party hereto hereby submits to the exclusive jurisdiction of the state and federal courts residing in the State of Delaware with respect to the maintenance and resolution of any claims arising hereunder or related hereto.

4.8.  Severability.  Whenever possible, each provision or portion of any provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or portion of any provision in such jurisdiction, and this agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained therein.

4.9.  Amendment; Waiver.  This Agreement may amended only by a writing signed by the Company and Investor.  No waiver hereunder shall be effective unless set forth in a writing signed by the party granting such waiver.

4.10.  Attorneys’ Fees.  In any action or proceeding brought to enforce any provision of this Agreement or where any provision hereof is validly asserted as a defense, the successful party shall, to the extent permitted by applicable law, be entitled to recover reasonable attorneys’ fees in addition to any other available remedy.

4.11.  Notices.  All notices and other communications provided for or permitted hereunder shall be made as set forth in Section 10.01 of the Credit Agreement.

4.12.  Counterparts.  This Agreement may be executed in any number of separate counterparts (including by facsimile or other electronic transmission) and by the parties hereto in separate counterparts each of which when so executed shall be deemed to be an original and all of which together shall constitute one and the same agreement.

4.13.  Entire Agreement.  This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein.  This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter contained herein.

4.14.  Further Assurances.  The parties shall execute and deliver all such further instruments and documents and take all such other actions as may reasonably be required to carry out the transactions contemplated hereby and to evidence the fulfillment of the agreements herein contained.

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4.15.Termination.  Notwithstanding anything to the contrary contained herein, this Agreement will terminate in its entirety and be of no further force or effect upon the first date on which Investor’s Ownership Percentage is less than 10%; provided however, the provisions contained in Section 4 hereof (other than Section 4.1, Section 4.2 and Section 4.3) shall survive any such termination.

[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]

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

KEMET CORPORATION
By:	/s/ William M. Lowe, Jr.
Name:	William M. Lowe, Jr.
Title:	Executive Vice President and Chief Financial Officer

Signature Page to Investor Rights Agreement

K FINANCING, LLC
By:	/s/ Mary Ann Sigler
Name:	Mary Ann Sigler
Title:	Vice President

Signature Page to Investor Rights Agreement

EX-10.3

Exhibit 10.3

EXECUTION COPY

CORPORATE ADVISORY SERVICES AGREEMENT

This CORPORATE ADVISORY SERVICES AGREEMENT (this “Agreement”) is entered into as of June 30, 2009 (the “Effective Date”) by and between KEMET CORPORATION, a Delaware corporation (the “Company”), and PLATINUM EQUITY ADVISORS, LLC, a Delaware limited liability company (the “Advisor”).

RECITALS

A.The Company specializes in manufacturing capacitors that are used in a wide variety of electronic applications and products (collectively, the “Business”).

B.The Advisor agrees to perform certain services with respect to the Company and the Business, and, in exchange for such services, the Company agrees to pay Advisor certain fees and to provide for other consideration, all as set forth herein.

C.The Company and K Financing, LLC, a Delaware limited liability company (“Lender”), are parties to that certain Amended and Restated Credit Agreement, dated as of June 7, 2009, as amended (as the same may be further amended from time to time, the “Credit Agreement”), pursuant to which Lender agreed to provide certain credit to the Company on the terms and subject to the conditions thereof.  Lender is an affiliate of Advisor.

D.The execution and delivery of this Agreement by the Company is a condition precedent to the obligations of Lender under the Credit Agreement to make the initial loans thereunder.

AGREEMENT

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

1.Appointment and Term.  The Company hereby retains the Advisor to render those services set forth in Exhibit A hereto, together with such other services as the Company and the Advisor may mutually agree upon from time to time (collectively, the “Services”).  The term of this Agreement shall begin on the Effective Date and shall continue until the later to occur of (i) the fourth (4th) anniversary of the date of this Agreement and (ii) the termination of the Credit Agreement.  Notwithstanding the foregoing, (x) the Advisor may, with or without cause and in its sole discretion, terminate this Agreement at any time upon written notice to the Company, and (y) subject to the following sentence, this Agreement shall automatically terminate at the effective time of (I) a merger or consolidation of the Company with or into any entity, or the transfer or sale by the holders of the Company’s common stock (on a fully diluted, as converted basis), which results in the holders of the Company’s outstanding common stock immediately prior to any such merger, consolidation, transfer or sale ceasing to own, directly or indirectly, immediately following such merger, consolidation, transfer or sale, at least 50% of the outstanding voting securities (measured by voting rights) (on a fully diluted, as converted basis) of the surviving entity, (II) the sale, transfer or other disposition of all or substantially all of the Company assets and (III) the liquidation or dissolution of the Company; provided, however, that

this Agreement shall not automatically terminate as provided in the foregoing clause (y)(I) or (y)(II) (and shall rather continue in full force and effect) if the Company so requests in writing prior to the effective time of the applicable transaction and concurrently therewith the applicable successor to or assignee of the Company assumes in writing, on a joint and several basis with the Company, all of the Company’s obligations hereunder upon such effective time.  If this Agreement is terminated pursuant to clause (y) of the immediately preceding sentence, concurrently with (and as a condition precedent to the effectiveness of) such termination, the Company shall make a lump sum payment to the Advisor equal to the aggregate amount of remaining Advisory Fees that would be payable to the Advisor pursuant to Section 3 if the term of this Agreement continued until the fourth (4th) anniversary of the date of this Agreement.

2.Quality of Services.  The Advisor shall use commercially reasonable efforts to render the Services in a professional, timely and workmanlike manner; provided that notwithstanding the foregoing or anything herein to the contrary, the Advisor makes no other representations or warranties, either express or implied, with respect to the Services rendered hereunder.  It is further understood and agreed that, notwithstanding anything herein to the contrary, the Company is not precluded from engaging other persons aside from or in addition to the Advisor to provide similar or identical Services to the Company during the term of this Agreement, and any such engagement of another person shall not affect or impair the Advisor’s right to receive the fees set forth herein.

3.Compensation.

(a)In consideration of the Services and the Advisor’s willingness to provide the same, the Company shall pay to the Advisor a fee (the “Advisory Fee”) of US$1,500,000 per calendar year during the term of this Agreement.  The Company shall make a single lump sum Advisory Fee payment of US$1,500,000 on the date hereof, which shall satisfy the Company’s obligations to pay the Advisory Fee hereunder through the remainder of calendar year 2009 and the portion of calendar year 2010 ending on the first anniversary of the date of this Agreement.  Beginning with the first calendar quarter ending after the first anniversary of the date of this Agreement, the Company shall pay the Advisory Fee for the applicable calendar year in arrears in equal quarterly installments due and payable on the last business day of each calendar quarter during the term of this Agreement.  For example, if the date of this Agreement is June 30, 2009, (i) with respect to calendar year 2009, the Company shall make a single lump sum Advisory Fee payment of US$1,500,000 on June 30, 2009 and (ii) with respect to calendar year 2010, if this Agreement is in effect, the Company shall make an Advisory Fee payment of $375,000 on September 30, 2010 and $375,000 on December 31, 2010.  For the avoidance of doubt, the Company’s Advisory Fee payment for the first calendar quarter ending after the first anniversary of the date of this agreement shall be made on a pro rata basis based upon the actual number of days in such calendar quarter after the first anniversary of the date of this Agreement.  Payments of the Advisory Fee shall be due and payable, without demand or other notice from the Advisor, as provided herein.  All Advisory Fee payments due and payable hereunder shall be made by the Company via wire transfer of immediately available funds to an account designated by the Advisor or in such other manner as may be mutually agreed upon by the Company and Advisor.  All Advisory Fees payable hereunder shall be non-refundable (including, without limitation, if this Agreement is terminated prior to the completion of a particular calendar quarter), and shall

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be paid when due, without right of offset.  The Company shall promptly reimburse the Advisor (on a periodic basis, as invoiced) for all reasonable out-of-pocket costs and expenses incurred by the Advisor in connection with rendering the Services.

(b)If, at the time any payment due hereunder from the Company to the Advisor is due and payable, the Company either (i) does not have sufficient funds available to make such payment at such time or (ii) is prohibited by any of its debt financing agreements from making such payment at such time, then the Company may defer such payment until the earliest subsequent time when the Company has sufficient funds available to make such payment or when such prohibition in the Company’s debt financing agreements is no longer effective, as applicable; provided that (x) nothing in the foregoing shall be deemed to alter the Company’s absolute obligation to make such payment, and (y) any payment so deferred shall bear interest at the Applicable Rate from the due date thereof until the date such payment (including all accrued interest thereon) is made in full.  For the purposes of this Agreement, the “Applicable Rate” shall be the “prime rate” then in effect as published in The Wall Street Journal for the date such payment is due or is made in full, whichever is greater, plus three percent (3%).  For the avoidance of doubt, except as expressly permitted by this Section 3(b), the Company may not defer any payment due hereunder.

4.Representation and Warranties.

(a)The Advisor represents and warrants to the Company that as of the date hereof: (i) the Advisor is a limited liability company duly organized and validly existing under the laws of the state of Delaware, and all corporate and other internal authorization required for the execution of this Agreement by the Advisor have been obtained, and (ii) this Agreement does not materially violate any agreements to which the Advisor is a party or is otherwise bound.  Except as otherwise expressly set forth herein, the Advisor makes no representations or warranties with respect to the Services, this Agreement or any other matter related hereto.

(b)The Company represents and warrants to the Advisor that as of the date hereof: (i) the Company is a corporation duly incorporated and validly existing under the laws of the State of Delaware, and all corporate and other internal authorization required for the execution of this Agreement by the Company have been obtained, (ii) this Agreement does not materially violate any agreements to which the Company is a party or is otherwise bound, (iii) the Company is not a party to or otherwise bound by any agreement that prohibits the Company from making any payment hereunder when due, and the Company hereby covenants that it will not enter into any such agreement and will not modify or amend any existing agreement to which the Company is a party or otherwise bound in a manner that would cause any such prohibition to be applicable.  Except as otherwise expressly set forth herein, the Company makes no representations or warranties with respect to the Services, this Agreement or any other matter related hereto.

5.Confidentiality.  The Advisor agrees to use commercially reasonable efforts to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees, agents, advisors, other representatives and third parties who have a bona fide need to know the same, including without limitation accountants, legal counsel, other advisors and lenders (it being understood that the

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persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential pursuant to the terms hereof or will otherwise be subject to contractual or other confidentiality restrictions that are no less restrictive than the provisions hereof), (b) to the extent requested by any regulatory authority or any quasi-regulatory authority, (c) to the extent required by applicable Legal Requirements or by any subpoena or similar legal process, (d) in connection with the exercise of any remedies under this Agreement or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder, (e) with the consent of the Company or (f) to the extent such Information (i) is publicly available at the time of disclosure or becomes publicly available other than as a result of a breach of this Section 5 or (ii) becomes available to the Advisor on a nonconfidential basis from a source other than the Company.  For the purposes of this Section 5, “Information” shall mean all information received from the Company relating to the Company or any of its subsidiaries or its business that would reasonably be considered to be confidential, other than any such information that is available to the Advisor on a nonconfidential basis prior to disclosure by the Company.

6.Independent Contractor.  The Company acknowledges that in performing the Services, the Advisor is acting as an independent contractor, and not as a fiduciary, agent or otherwise, to the Company or any other person or entity.  The Advisor acknowledges that it shall not, unless otherwise expressly authorized in writing by the Company, have any authority to act for or represent the Company in any way, execute any transaction on behalf of the Company or otherwise be deemed an agent of the Company.  Nothing contained in this Agreement shall be deemed or construed by the parties or any third party to create the relationship of partners or joint venturers between the Advisor and the Company.  The Company acknowledges and agrees that the Advisor and its affiliates may have and may continue to have relationships with parties other than the Company pursuant to which the Advisor may acquire information relevant to the Business or otherwise of interest to the Company, and the Advisor shall have no obligation to disclose any such information to the Company or to use such information in connection with any Services.

7.Indemnification; Limitation of Liability.  The Company shall indemnify, to the fullest extent permitted by law, the Advisor and its officers, directors employees, affiliates, agents and other representatives (collectively, the “Advisor Parties”), against all liabilities, costs and expenses incurred in connection with the Services provided hereunder, other than if and to the extent such liabilities, costs and expenses arise as a result of the gross negligence, bad faith, fraud or willful misconduct of the party to be charged.  Notwithstanding anything herein to the contrary, the maximum aggregate monetary or other liability that the Advisor Parties shall have to the Company or any other party (including, without limitation, the Company’s officers, directors, employees, agents and other representatives and stockholders) with respect to any and all claims (on a cumulative basis) related to or in connection with the breach or alleged breach hereof by the Advisor, or related to or in connection with the Services provided or to be provided hereunder, shall be the lesser of (i) the aggregate amount of Advisory Fees paid by the Company to the Advisor hereunder and (ii) US$1,500,000.  Notwithstanding anything herein to the contrary, the Advisor shall not be liable under any circumstance for any lost profits or other special, incidental, indirect, punitive or consequential damages, however, caused and under any

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theory of liability, arising from its provision of the Services or otherwise related to or in connection with this Agreement.

8.General.  Each provision of this Agreement shall be considered severable, and if for any reason any provision that is not essential to the effectuation of the basic purposes of this Agreement is determined to be invalid and contrary to any existing or future law, such invalidity shall not impair the operation of or affect those provisions of this Agreement that are valid.  The waiver of either party of any breach of this Agreement shall not operate or be construed to be a waiver of any subsequent breach.  This Agreement shall be construed and enforced in accordance with the laws of the state of California, United States, without regard to its conflict of laws principles.  All section headings in this Agreement are for convenience of reference only and are not intended to qualify the meaning of any section.  No persons other than the parties to this Agreement may directly or indirectly rely upon or enforce the provisions of this Agreement, whether as a third party beneficiary or otherwise.  This Agreement represents the entire agreement and understanding of the parties with respect to the subject matter hereof, and supersedes all prior agreements and understandings with respect thereto.  This Agreement may only be amended by a writing signed by each of the parties hereto.  The provisions contained in Section 5, Section 7 and Section 8 hereof shall survive the termination of this Agreement.  Capitalized terms which are defined in the Credit Agreement and used but not defined herein shall have the meaning assigned to such terms in the Credit Agreement.

Signature Page Follows Immediately Hereafter

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives as of the date first set forth above.

KEMET CORPORATION
By:	/s/ William M. Lowe, Jr.
Name:	William M. Lowe, Jr.
Title:

Signature Page to Corporate Advisory Services Agreement

PLATINUM EQUITY ADVISORS, LLC
By:	/s/ Mary Ann Sigler
Name:	Mary Ann Sigler
Title:	Vice President

Signature Page to Corporate Advisory Services Agreement

EXHIBIT A TO CORPORATE ADVISORY SERVICES AGREEMENT*

·Providing general business advice.

·Providing advice regarding corporate restructuring.

·Providing advice regarding structuring and negotiating transactions.

·Providing advice regarding identifying, structuring, negotiating, obtaining bank, institutional and other sources of financing for the Company.

·Providing advice regarding financial activities of the Company.

·Providing management advice and financial planning advice.

·Providing such other advice to the Company as generally may be required to properly carry on the business and operations of the Company.

·Administrative advice:

(i)Advice on the performance of financial analyses and research by the Company, including financial forecasting, strategic planning, budgeting, and analysis; and

(ii)Advice to the Company in connection with capital investments.

·Financial advice:

(i)Advice in the coordination and oversight of the short-term and long-term financing requirements of the Company (including as to cash-flow projections);

(ii)Advice on and oversight of the investments to be carried out by the Company;

(iii)Advice in the coordination of cash and equivalents held by the Company, including cash on hand, and investments of cash and equivalents on a consolidated basis; advice on the control and recovery of liabilities and receivables;

(iv)Advice in the coordination of the management of foreign currencies and hedging operations; and

(v)Review of and subsequent advice regarding the business plan of the Company.

* The specific nature and scope of all Services to be rendered hereunder to be determined as mutually agreed from time to time by the parties.