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ACCEPTANCE AGREEMENT
SunTrust Bank, Atlanta
X.X. Xxx 0000, Xxxxxx Xxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxx
Ladies and Gentlemen:
You have informed us that SUNTRUST BANK, ATLANTA (the "Bank") has established an
uncommitted guidance line of credit in the principal amount of $20,000,000 (the
"Credit Facility") to KEMET Corporation, a Delaware corporation (the "Company"),
pursuant to that certain letter dated November 12, 1997 and the Demand Note
dated November 12, 1997 (the "Note"). Disbursements under the Credit Facility
shall be payable ON DEMAND and shall be made in the sole discretion of the Bank.
Upon receiving a request for a disbursement under the Credit Facility from the
Company, which request shall include the principal amount requested and the
interest period requested , which shall be a period of between one (1) and
ninety (90) days (the "Interest Period"), the Bank will promptly advise the
Company whether or not the Bank will make such disbursement and, if the Bank
determines to make such disbursement, the interest rate to be applicable thereto
calculated on the basis of a 360-day year for the actual number of days elapsed
(the "Quoted Rate"). If the Quoted Rate is accepted by the Company, the Bank
may, in its sole discretion, make such disbursement available to the Company
either as a loan advance pursuant to the Note or by creating Acceptances (as
hereinafter defined) on the terms and conditions hereinafter set forth;
provided, that the aggregate unpaid principal balance of all loan advances from
time to time outstanding pursuant to the Note plus the aggregate discounted
amount of all outstanding Acceptances from time to time created by the Bank
pursuant to this Agreement shall not at any time exceed $20,000,000.
The Company hereby agrees with the Bank as follows:
1. Creation. Upon any request by the Company for a disbursement under the
Credit Facility which the Bank, in its sole discretion, elects to make, the
Company hereby authorizes the Bank, on behalf of the Company pursuant to the
authority granted in Paragraph 4 hereof, to accept one or more drafts drawn on
the Bank by the Company and payable to the order of the Bank in such amounts as
the Bank may reasonably deem necessary in order to sell, rediscount or otherwise
transfer in accordance with Paragraph 2 hereof (each such draft shall
hereinafter be referred to as an "Acceptance" and collectively, the
"Acceptances") . The aggregate face amount of the Acceptances so created at
such time shall equal an amount sufficient to provide the Company, after
deduction of interest at the Quoted Rate (calculated on a discounted basis),
with the principal amount of such requested disbursement.
2. Discount. Each Acceptance shall be purchased by the Bank at a discount.
The discount rate shall equal the Quoted Rate. Upon the discount of such
Acceptance(s), the net proceeds will be credited to the Company's account at the
Bank or transferred in accordance with the Company's written instructions to
the Bank. The Bank may at any time and from time to time sell, rediscount or
otherwise transfer such discounted Acceptances.
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3. Maturity. Each Acceptance shall be payable ON DEMAND; provided, that
the Company may request the Bank to renew the disbursement evidenced by such
Acceptance on the last day of the interest period applicable to such
disbursement (which shall be the maturity date of such Acceptance). PROVIDED,
THAT, the Bank shall have no obligation or commitment to renew such disbursement
(notwithstanding that the Bank may have previously renewed such disbursement or
any other disbursement), in which case the Company will pay to the Bank an
amount equal to the face amount of such Acceptance.
4. Limited Bank Authority. The Company does hereby nominate, constitute and
appoint the Bank as its true and lawful attorney-in-fact (its "attorney-in-
fact") to represent and act for it and on its behalf relative to the following:
1. To execute the Acceptances in the Company's name, as drawer; and 2. To
complete the Acceptances with the following information: (a) the maturity date,
which shall be the last day of the interest period requested by the Company and
agreed to by the Bank, (b) the payee, which shall be the Bank, and (c) the
dollar amount of each Acceptance. The Bank shall not incur any liability to the
Company by reason of the Bank's reliance upon the authority herein given to the
attorney-in-fact, unless and until said attorney-in-fact shall have received,
and had reasonable time to act upon, written notice of revocation. The Company
further agrees to indemnify the Bank and its directors, officers, employees and
agents, and hold all of the aforementioned harmless from and against any loss,
cost or expense, including reasonable attorney's fees actually incurred, that
the Bank may incur in reliance upon this limited power of attorney, except for
any losses, costs or expenses caused by the Bank's or such person's gross
negligence or wilful misconduct. The indemnity contained in this paragraph shall
survive the termination of this Acceptance Agreement. Until the Bank's receipt
of written notice of revocation from the Company, and reasonable time to act
thereon, any actions by the Bank in reliance upon this power of attorney shall
be fully binding upon the Company, its successors and assigns.
5. Relationship with Note. This Acceptance Agreement does not replace or
amend the the Note, which remains in full force and effect, and the terms and
conditions of the Note are hereby incorporated into this Acceptance Agreement by
reference thereto.
6. Default Interest. Should the Company fail for any reason to pay any
Acceptance in full on the date of any demand, the Company further promises to
pay interest on the unpaid amount from such date until the date of final payment
at a default rate equal to the Bank's Prime Rate plus 2% per annum but in no
event shall the interest rate so charged exceed the highest rate permitted by
applicable law, if any. Should legal action or an attorney at law be utilized
to collect any amount due hereunder, the Company further promises to pay all
costs of collection, including 15% of such unpaid amount as attorneys' fees.
7. Bankruptcy. All Acceptances shall immediately become due and payable,
without notice or demand, upon the filing of any petition or the commencement of
any proceeding by or against the Company for relief under any bankruptcy or
insolvency laws, or any law relating to the relief of debtors, readjustment of
indebtedness, debtor reorganization, or composition or extension of debt.
8. Miscellaneous. Should legal action or an attorney-at-law be utilized to
collect any amount due under this Acceptance Agreement, the Company promises to
pay all costs of collection plus reasonable attorneys' fees. This Acceptance
Agreement shall be binding upon the Company, its legal representatives,
successors and assigns; provided, that the Company may not assign any of its
rights or obligations hereunder to any other person or entity. TIME IS OF THE
ESSENCE OF THIS ACCEPTANCE AGREEMENT.
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THIS ACCEPTANCE AGREEMENT WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF GEORGIA. TO THE EXTENT PERMITTED BY APPLICABLE LAW,
THE COMPANY WAIVES ITS RIGHT TO A JURY TRIAL.
The Company hereby authorizes the Bank at any time and from time to time,
without notice to the Company or any other entity or 4
person, such notice being expressly waived, to set off, appropriate and apply
any and all deposits (including all general and special deposits and matured
and unmatured certificates of deposit) maintained by the Company with the Bank
to the obligations of the Company under this Acceptance Agreement upon demand or
the failure of the Company to pay any Acceptances. The Company and the Bank
agree that the right of the set off provided herein is not a lien or security
interest.
PRESENTMENT, NOTICE OF DISHONOR, NOTICE OF DEMAND AND PROTEST ARE HEREBY WAIVED
BY THE COMPANY.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
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IN WITNESS WHEREOF, the undersigned executes this Acceptance Agreement under
seal this 12th day of November, 1997.
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Very truly yours,
KEMET Corporation
By /S/ D.R. Cash
Title: Senior Vice President -
Administration & Treasurer
Attest: /S/ X.X. Xxxxxx
Title: Senior Vice President -
Human Resources & Secretary
CORPORATE SEAL
Acknowledged and Agreed as of
the 12 day of November, 1997.
SUNTRUST BANK, ATLANTA
By /S/ X.X. Xxxx
Title: Xxxxx X. Xxxx, Banking Officer
By /S/ Xxxxxxxx X. Xxxxxxx
Title: Vice President
