ASSET PURCHASE AGREEMENT

Exhibit 2.1

ASSET PURCHASE AGREEMENT

           ASSET PURCHASE AGREEMENT (the “ Agreement ”), dated as of September 15, 2008, by and between KEMET Electronics Corporation (“ Seller ”), a Delaware corporation and a wholly-owned subsidiary of KEMET Corporation (“ Seller Guarantor ”) and Siliconix Technology C.V. (“ Buyer ”), a company organized under the laws of the Netherlands and a wholly-owned subsidiary of Vishay Intertechnology, Inc. (“ Buyer Guarantor ”). Capitalized terms used herein have the meanings set forth in Exhibit A hereto.

RECITALS

           WHEREAS, Seller is engaged in the business of developing, manufacturing, distributing and selling wet tantalum capacitors (the “ Business ”).

           WHEREAS, Seller owns certain inventory located in Matamoros, Tamaulipas, Mexico and Ciudad Victoria, Tamaulipas, Mexico, owns certain machinery, equipment, tooling and other personal tangible property located in Matamoros, Mexico and Victoria, Mexico, and owns certain intellectual property, all used in the Business.

           WHEREAS, Buyer and Seller desire that Buyer purchase from Seller, and that Seller sell to Buyer, certain operating and intangible assets used in the Business on the terms and conditions set forth herein.

           WHEREAS, simultaneously with the execution of this Agreement, Buyer and Seller are entering into (i) that certain Loan Agreement, dated the date hereof (the “ Loan Agreement ”), pursuant to which Buyer is lending to Seller $15,000,000 on the terms and subject to the conditions set forth in the Loan Agreement, (ii) that certain Transition Services Agreement, dated the date hereof (the “ Transition Services Agreement ”), pursuant to which Seller will provide Buyer with certain services relating to the Business, and (iii) that certain Commodatum Agreement, dated as of the date hereof (the “ Commodatum Agreement ”) to be executed by Seller and its Mexican subsidiaries with respect to the Transferred Assets in order to fulfill its obligations under the Transition Services Agreement.

           WHEREAS, concurrently with the execution and delivery of this Agreement, and as a condition to Seller’s willingness to enter into this Agreement, Buyer Guarantor has agreed fully and unconditionally to guarantee the representations, warranties, covenants, agreements and other obligations of Buyer in this Agreement (the “ Buyer Guarantee ”).

           WHEREAS, concurrently with the execution and delivery of this Agreement, and as a condition to Buyer’s willingness to enter into this Agreement, Seller Guarantor has agreed fully and unconditionally to guarantee the representations, warranties, covenants, agreements and other obligations of Seller in this Agreement (the “ Seller Guarantee ”).

           NOW, THEREFORE, in consideration of the foregoing premises and of the mutual covenants, representations, warranties and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

ARTICLE I

PURCHASE AND SALE

      Section 1.01. Purchase and Sale of Assets .

           (a) On the terms and conditions set forth herein, at the Closing as described in Article II hereto, Buyer shall purchase from Seller, and Seller shall (or with respect to the Arco Intellectual Property owned by Seller’s wholly-owned subsidiary Arcotronics Italia S.p.A. or Arcotronics Limited, a wholly-owned subsidiary of Arcotronics Italia (Arcotronics Italia S.p.A and Arcotronics Limited collectively, “ Arcotronics ”), shall cause Arcotronics to) irrevocably sell, transfer, convey, assign and deliver to Buyer (or one or more direct or indirect wholly-owned subsidiaries of Buyer Guarantor as Buyer may designate), good and valid title to, and all rights, title and interests of Seller (or, with respect to the Arco Intellectual Property owned by Arcotronics, all rights, title and interests of Arcotronics) in and to the following property, free and clear of all liens, charges, pledges, security interests, encumbrances, restrictions and claims of any nature whatsoever other than Permitted Liens (collectively, the “ Transferred Assets ”):

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           (b) Notwithstanding anything contained in this Agreement to the contrary, the following rights, properties and assets of Seller (the “ Excluded Assets ”) shall not be included in the Transferred Assets:

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      (xv) any and all property, business and assets of every kind, nature and description, wherever located and whether real, personal or mixed, tangible or intangible, that (A) is not used in the Business or (B) that is not otherwise defined as a “Transferred Asset”.

           (c) Simultaneously herewith and partially in consideration for the Purchase Price, Buyer and Seller are entering into a separate trademark license agreement governing the use of certain of Seller’s trademarks in the form attached as Exhibit B hereto (the “ Trademark License Agreement ”).

      Section 1.02. Assumption of Liabilities under Transferred Agreements . At Closing, Buyer shall assume and be liable for, and shall pay, perform and discharge directly when due the following Liabilities (collectively, the “ Assumed Liabilities ”):

           (a) all of Seller’s obligations on the date hereof to fill orders, and all of Seller’s warranty obligations relating to such orders (to the extent that products subject to such orders have not been delivered as of the Closing Date), for wet tantalum capacitors set forth on Schedule 1.01(a)(i) ;

           (b) all of Seller’s outstanding commitments for the purchase of raw materials and supplies set forth on Schedule 1.02(b) ;

           (c) all of Seller’s obligations and liabilities under the Transferred Agreements, all as more fully set forth in the Assignment and Assumption Agreement; and

           (d) all of Seller’s obligations and liabilities under other Contracts that Buyer agrees to assume pursuant to Section 1.06.

      Section 1.03. Buyer Not Responsible for Liabilities Except Section 1.02 Liabilities .

           (a) Notwithstanding anything contained in this Agreement to the contrary, Buyer does not assume or agree to undertake to pay, satisfy, discharge or perform in respect of, and will not be deemed by virtue of the execution and delivery of this Agreement or any document delivered at the Closing pursuant to this Agreement, or as a result of the consummation of the transactions contemplated by this Agreement, to have assumed, or to have agreed to pay, satisfy, discharge or perform in respect of, any liability, obligation, indebtedness or Taxes of Seller or of any other Person or in any way relating to the Business (whether primary or secondary, direct or indirect, known or unknown, absolute or contingent, matured or unmatured, or otherwise) other than the Assumed Liabilities, (such liabilities and obligations retained by Seller, including Seller’s transaction expenses and all liabilities and obligations with respect to the Excluded Assets and any amounts due by Seller to licensors of the Business arising prior to the Closing Date, being referred to herein as the “ Retained Liabilities ”). It is specifically agreed that Seller shall retain, and as between Seller and Buyer, shall remain solely liable for, all of the Retained Liabilities, which Retained Liabilities shall be satisfied in full or otherwise discharged by Seller in the ordinary course of business following the Closing. Without limiting the foregoing, the Retained Liabilities include Liabilities of or owing by Seller:

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      Section 1.04. Purchase Price . The aggregate purchase price for the Transferred Assets shall be Thirty Five Million Two Hundred Thousand Dollars ($35,200,000) (the “ Purchase Price ”). Buyer shall pay the Purchase Price as follows:

           (a) At the time of the Closing by delivering to Seller, by wire transfer in immediately available funds, the amount equal to Thirty Three Million Seven Hundred Thousand Dollars ($33,700,000) (“ Closing Date Cash Payment ”).

           (b) At the time of the Closing by delivering to the Escrow Agent, by wire transfer in immediately available federal funds, the amount equal to One Million Five Hundred

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Thousand Dollars ($1,500,000), consistent with the Escrow Agreement (the “ Escrow Amount ”). The Escrow Amount shall be held in an escrow account to secure Seller’s obligations under this Agreement and shall be transferred to Seller (subject to pending claims) or Buyer (or Buyer Guarantor on behalf of Buyer) as provided in the Escrow Agreement.

      Section 1.05. Allocation of Buyer’s Consideration . As soon as practicable, Buyer shall provide to Seller a preliminary allocation of the Purchase Price delivered hereunder to the Transferred Assets, the parties’ agreements as contemplated by this Agreement and the Trademark License Agreement, it being understood that only a nominal valuation is to be assigned to the Trademark License Agreement. Once the parties have agreed on such allocation, each party agrees to report the transaction contemplated by this Agreement for tax purposes in accordance with such allocation.

      Section 1.06. Assignment of Contracts and Rights .

           (a) Schedule 1.06(a)(i) lists all written Contracts (including Contracts that consist only of open purchase orders) in effect between Seller and other Persons for the purchase of wet tantalum capacitors by such Persons from Seller (the “ Customer Contracts ”) and identifies those Customer Contracts that are between Seller and a distributor (“ Distributor Contracts ”) and those that are between Seller and Persons that are not distributors (“ Other Customer Contracts ”).

           (b) Distributor Contracts shall not be assigned to Buyer. Buyer shall fulfill Seller’s obligations with respect to any open orders under Distributor Contracts for wet tantalum capacitors listed on Schedule 1.01(a)(i) and shall be entitled to receive the amount of any payments due to Seller with respect to such orders. After fulfillment of such open orders, any further orders and sales of wet tantalum capacitors given to Buyer by the respective distributors party to the Distributor Contracts shall be governed by the terms of Buyer’s agreements with the distributors party to the Distributor Contracts. Seller shall direct any payor of amounts to which Buyer is entitled to receive pursuant to this Section 1.06(b), to pay such amounts, net of any discounts and credits which are applicable to such amounts payable under the relevant Distributor Contract, directly to Buyer except with respect to any orders for which Seller provided the invoice, provided, however, that in all cases where Seller receives any amounts due to Buyer pursuant to this Section 1.06(b), Seller shall promptly forward such amounts to Buyer.

           (c) Transferred Agreements shall consist of (i) Other Customer Contracts that relate solely to the sale of wet tantalum capacitors and that are assignable by their terms without Consent or for which all required consents are obtained prior to the Closing Date and (ii) the portion of Other Customer Contracts relating to the sale of wet tantalum capacitors to the extent that such portion can be and is severed from the remainder of the Contract pursuant to documentation satisfactory to Seller and Buyer and executed by the other party to the Contract prior to the Closing Date. Seller shall provide Buyer with copies of all Transferred Agreements on or prior to the Closing. Anything contained in this Agreement to the contrary notwithstanding, this Agreement shall not constitute an agreement or attempted agreement to transfer, sublease or assign any Contract or any claim or right with respect to any benefit arising thereunder or resulting therefrom, if an attempted transfer, sublease or assignment thereof, without the required Consent of any other party thereto, would constitute a breach thereof or in any way affect the rights of Buyer or Seller thereunder. Within a commercially reasonable time after Closing,

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Seller shall use its commercially reasonable efforts to obtain the Consent of any such third party to the transfer, sublease or assignment to Buyer of Other Customer Contracts that relate solely to the sale of wet tantalum capacitors in cases in which such Consent is required for such transfer, sublease or assignment. If any such Consent is not obtained, Seller shall use its commercially reasonable efforts to cooperate with Buyer in reasonable and lawful arrangements designed to provide Buyer the benefits thereunder and provide for Buyer to perform the obligations thereunder, including (a) adherence to reasonable procedures established by Buyer for the immediate transfer to Buyer of any payments or other funds received by Seller thereunder (other than the Receivables) and (b) enforcement for the benefit of Buyer, at Buyer’s expense, of any and all rights of Seller thereunder against the other party or parties thereto arising out of the breach or cancellation thereof by such other party or parties or otherwise and performance by Buyer, at Buyer’s expense, on behalf of Seller , of the obligations thereunder. For the avoidance of doubt, Buyer agrees to assume all obligations and liabilities of Seller with respect to the Business and the sale of wet tantalum capacitors arising under Other Customer Contracts that are not assigned to Buyer but only if and to the extent that Buyer is entitled to receive the corresponding amounts due to Buyer with respect to wet tantalum capacitors sold pursuant to such Other Customer Contracts. Consistent with the foregoing, Buyer agrees to assume Seller’s warranty obligations concerning all Products shipped on or after the Closing Date for which Seller issues invoices to the customer pursuant to Other Customer Contracts that are not assigned to Buyer.

           (d) To the extent assignable, Seller hereby assigns to Buyer so much of the rights of Seller under or pursuant to all warranties, representations and guarantees made by suppliers, manufacturers and contractors relating directly to products sold or services provided in connection with the Business or affecting the property, machinery or equipment used by Seller in the Business, to the extent that such rights related to Transferred Assets.

      Section 1.07. No Other Representations . Except for the express representations and warranties of Seller contained in Article III, Buyer acknowledges that Seller has not made, and Buyer has not relied upon, any other representation or warranty, express or implied, with respect to the Business or the Transferred Assets. SELLER HEREBY EXPRESSLY DISCLAIMS ANY AND ALL IMPLIED WARRANTIES, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR USE, AND WARRANTIES ARISING FROM CUSTOM AND PRACTICE. EXCEPT AS EXPRESSLY PROVIDED IN ARTICLE III, SELLER SELLS, AND BUYER ACCEPTS, THE TRANSFERRED ASSETS ON AN “AS IS, WHERE IS” BASIS; provided, however, that nothing herein shall relieve Seller of its liability for fraud or intentional misstatement or misrepresentation.

ARTICLE II

CLOSING

      Section 2.01. Upon the terms and subject to the conditions of this Agreement, the closing of the transaction contemplated by this Agreement (the “ Closing ”) is taking place at the offices of Kramer Levin Naftalis & Frankel LLP, 1177 Avenue of the Americas, New York, New York 10036, on September 15, 2008 (the “ Closing Date ”); provided that the effective time of the Closing shall be 8:00 a.m. on the Closing Date.

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      Section 2.02. Seller’s Deliveries at Closing . At the Closing, Seller shall deliver or cause to be delivered to Buyer, the following:

           (a) each of the Ancillary Agreements, in each case executed by a duly authorized officer of Seller;

           (b) such other duly executed documents and certificates as may be required to be delivered by Seller pursuant to the terms of this Agreement; and

      Section 2.03. Buyer’s Deliveries at Closing . At the Closing, Buyer shall deliver, or cause to be delivered, the following:

           (a) the Closing Date Cash Payment to Seller by wire transfer of immediately available funds in accordance with Section 1.04 hereto;

           (b) each of the Ancillary Agreements, in each case executed by a duly authorized officer of Buyer that is a party thereto (or by a duly authorized officer of any direct or indirect subsidiary of Buyer Guarantor to which a Transferred Agreement is assigned) and delivered to Seller;

           (c) the Escrow Amount to the Escrow Agent; and

           (d) such other duly executed documents and certificates to Seller as may be required to be delivered by Buyer pursuant to the terms of this Agreement.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLER

           Seller represents and warrants to Buyer as follows:

      Section 3.01. Organization and Authority of Seller . Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Seller has the requisite corporate power and authority to own, operate, lease, possess or dispose of the properties, including the Transferred Assets, that it purports to own, operate, possess or lease and to carry on its business (including the Business) as it is presently conducted. Seller has the full legal right and all corporate power and authority to enter into this Agreement, and each of the Ancillary Agreements, and to consummate the transactions contemplated hereby and thereby. This Agreement, and each of the Ancillary Agreements has been duly authorized, executed and delivered by Seller and no other corporate action on part of Seller is necessary to authorize this Agreement and the Ancillary Agreements or to consummate the transactions so contemplated. This Agreement and each of the Ancillary Agreements (assuming due authorization, execution and delivery by Buyer) constitutes a legal, valid and binding obligation of Seller enforceable against Seller in accordance with its terms.

      Section 3.02. No Conflict . Except as set forth on Schedule 3.02 , neither the execution nor delivery of this Agreement, or the Ancillary Agreements by Seller nor the

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consummation by Seller of any of the transactions contemplated hereby or thereby, will (a) conflict with or violate the Certificate of Incorporation or By-laws of Seller (b) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, modification, cancellation or acceleration or loss of benefits) under, any of the terms, conditions or provisions of any Contract to which Seller is a party or to which it or the Transferred Assets may be subject or which is included in the Transferred Assets or the Assumed Liabilities or (c) violate any Permit applicable to Seller, the Transferred Assets, the Assumed Liabilities or the Business; except in the cases of clauses (b) or (c) for those violations, breaches or defaults that would reasonably be expected to not have a Material Adverse Effect.

      Section 3.03. Consents and Approvals . Except as set forth on Schedule 3.03 , the execution and delivery of this Agreement and the Ancillary Agreements by Seller do not, and the performance of this Agreement and each of the Ancillary Agreements by Seller will not, require any Consent of any Governmental Authority except as such may have been obtained, taken or made on or prior to the date hereof (other than pre-consummation trade or competition filings relating to the transaction contemplated by this Agreement as to which no representation is made although no concession is made that any such filings are required). Other than ministerial filings with Mexican Governmental Authorities, no Consents are required in order for Buyer to move the Transferred Assets outside of Mexico.

      Section 3.04. Financial Statements .

           (a) Schedule 3.04(a) sets forth a complete and accurate copy of the unaudited consolidated statements of income for the Business as of and for each of the years ended March 31, 2008, March 31, 2007 and March 31, 2006 (provided that the consolidated statement of income for the year ended March 31, 2006 shall not include any revenue or related financial information relating to operation of the Arco Tangible Assets), respectively (collectively, the “ Financial Statements ”), and a complete and accurate copy of the unaudited consolidated statements of income as of and for the quarter ended June 30, 2008 (the “ Interim Financial Statements ”).

           (b) Since June 30, 2008, the Business has been conducted only in the ordinary course consistent with past practice and there has been no material adverse change in the business operations, conditions or prospects, financial or otherwise, with respect to the Business or the Transferred Assets and, to Seller’s Knowledge, no such change has been threatened nor is it pending.

           (c) The Financial Statements and the Interim Financial Statements (as of the date thereof and for the periods covered thereby) (i) have been prepared in accordance with the books and records of Seller and the Business, (ii) are true, complete and correct in all material respects and present fairly in all material respects the results of operations of the Business for the periods indicated and (iii) have been prepared in accordance with Business Accounting Principles.

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      Section 3.05. Title to Transferred Assets; Condition and Sufficiency of Assets .

           (a) The Arco Intellectual Property constitutes all of the Intellectual Property acquired from Blue Skye (Lux) S.à.r.l related exclusively to wet tantalum capacitor products. The Transferred Core Intellectual Property constitutes all of the currently existing Intellectual Property exclusively used or to be used by Seller to manufacture the products listed on Schedule 3.05(a)(i) . Other than the Transferred Intellectual Property, the rights licensed to Buyer under the Trademark License Agreement and the proprietary information, know-how and technical information transferred pursuant to this Agreement, Seller does not own or use any other Intellectual Property, proprietary information, know-how or technical information necessary for Buyer to manufacture as Seller manufactured prior to the date hereof, or necessary for the right to use, sell, offer to sell, market or import, any of the products of the Business listed on Schedules 3.05(a)(i) and 3.05(a)(ii) .

           (b) The Equipment is in good operating condition and repair, subject to normal wear and tear, and is adequate for the uses they are put to and is not in need of maintenance and repair that is material in nature or cost.

           (c) Seller or its Mexican subsidiary have taken, or in a timely manner will take after the Closing, all actions necessary to ensure that the Transferred Assets imported into Mexico have been duly and legally imported in Mexico for the development of the Business under certain permits issued to the Mexican subsidiaries of Seller by the Ministry of Economy under the denominated Decreto Para el Fomento de la Industria Manufacturera Maquiladora y de Servicios de Exportación (“ IMMEX ”).

           (d) Seller has, or, with respect to the Arco Intellectual Property owned by Arcotronics, Arcotronics has, the complete and unrestricted power and the unqualified right to sell, transfer, assign and deliver, and following the Closing, Buyer will have, good and valid title to all Transferred Assets, and Seller shall so defend Buyer’s title, free and clear of all title defects or objections, mortgages, liens, claims, charges, pledges, security interests (collectively “ Liens ”) except for the liens described on Schedule 3.05 (“ Permitted Liens ”).

      Section 3.06. Agreements .

           (a) The Customer Contracts are set forth on Schedule 1.06(a)(i) . Seller has previously delivered or made available to Buyer correct and complete copies of each of the Other Customer Contracts of Seller other than Other Customer Contracts that consist only of open purchase orders.

           (b) Each of the Other Customer Contracts is a legal, valid and binding agreement enforceable by and against Seller in accordance with its terms and in full force and effect on the date hereof. Seller has received no notice of cancellation or termination (written or otherwise) under any option or right reserved to the other party to any Other Customer Contract or any notice of default (written or otherwise) under such agreement. Except as otherwise disclosed on Schedule 3.06(b) , neither Seller, nor to the Knowledge of Seller any other party is in breach or default of any Other Customer Contract that would cause a Material Adverse Effect and, to the Knowledge of Seller, no event has occurred that, with notice or lapse of time or both, would constitute such a breach or default or permit termination, modification or acceleration under such Other Customer Contract that would

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cause a Material Adverse Effect. Except as separately identified in Schedule 3.06(b) , no Consent of any person is needed in order that the Other Customer Contracts continue in full force and effect following the assignment of such agreements to Buyer.

           (c) Aside from the Customer Contracts, the orders listed on Schedule 1.01(a)(i) and Schedule 1.02(b) , Contracts for tantalum wire and powder and the other Contracts listed on Schedule 3.06(c) , there are no (i) Customer Contracts; (ii) written Contracts for raw materials specifically used by Seller to manufacture wet tantalum capacitors; (iii) written Contracts specifically relating to the Business pursuant to which Seller is required to pay or is entitled to receive $50,000 or more in any twelve month period or (iv) other written Contracts specifically relating to the Business that are material to the Business as conducted by Seller.

           (d) Seller is not a party to a Contract that will in any way restrict or limit the conduct of the Business by Buyer or the use of the Transferred Assets by Buyer, including without limitation any joint venture or other cooperative.

      Section 3.07. Intellectual Property Rights .

           (a) Schedule 3.07 sets forth a complete and accurate list of all United States and foreign issued or registered Intellectual Property (including but not limited to patents, copyrights and trademarks), and all applications therefor, used in connection with the Business, indicating for each the applicable jurisdiction, issuance/registration/application number, and dates of filing/issuance/registration.

           (b) Except as set forth on Schedule 3.07 , Seller is the sole and exclusive owner of the Transferred Intellectual Property used in connection with the Business, free and clear of all liens, claims, charges and encumbrances and free from contractual restrictions and any other restriction. In each case where any patent, registered trademark, registered copyright, or the like used in connection with the Business is held by Seller by assignment, the assignment has been duly and properly recorded with the U.S. Copyright Office, the U.S. Patent and Trademark Office or the corresponding foreign authorities, as the case may be, to preserve all of Seller’s rights.

           (c) Seller has the full right and authority to conduct the Business and use the Transferred Intellectual Property used in connection with the Business in the manner in which they are currently being conducted and used and, to the Knowledge of Seller, such activities do not conflict with, violate, misappropriate or infringe on the rights of any other Person.

           (d) No Action has been asserted, nor to the Knowledge of Seller has any Action been threatened, verbally or otherwise, by any Person (i) challenging, or seeking to deny or restrict, the use by Seller of any Transferred Intellectual Property or (ii) alleging the violation, misappropriation, or infringement by Seller in connection with its conduct of the Business or its use of Transferred Intellectual Property. Seller has not asserted or threatened any Action against (i) any Person based upon any Intellectual Property related to the Business or (ii) any Intellectual Property owned by any other Person.

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           (e) No Person, other than Seller and Arcotronics, is authorized to use any of the trademarks “KEMET”, “CASTANET” and “ARCOTRONICS” or, to Seller’s Knowledge, any other Intellectual Property owned by Seller, with respect to the manufacture, marketing, distribution, use, importation or sale of wet tantalum capacitors or otherwise in competition with any aspect of the Business except as set forth on Schedule 3.07(e) .

           (f) No Contract, agreement or understanding between Seller and any Person exists which could impede or prevent the continued use by Seller or, following the Closing, Buyer in and to the Transferred Intellectual Property or which could result in the grant of any rights therein to another Person. No registered or issued Transferred Intellectual Property set forth in Schedule 3.07 has, to Seller's Knowledge, lapsed, expired, or been abandoned or canceled, or is subject to any pending or threatened opposition, cancellation proceeding before the U.S. Patent and Trademark Office or the U.S. Copyright Office or other U.S. or foreign proceeding.

           (g) To the Knowledge of Seller, all employees and independent contractors of Seller who created, prepared, developed or conceived any inventions, discoveries, trade secrets, ideas or works of authorship, whether or not patented or patentable or otherwise protectable under law, have duly assigned all of their rights therein to Seller pursuant to valid and enforceable written agreements.

           (h) Schedule 3.07(h) lists all computer software, code, programs, databases, and computer services, other than commercially available off-the-shelf items costing less than $500 per licensed user/copy, which are necessary to operate the Equipment.

      Section 3.08. Litigation . Except as set forth in Schedule 3.08 , (i) no Action is pending or, to the Knowledge of Seller, threatened that questions the validity of this Agreement or any Ancillary Agreement or any action taken or to be taken in connection with this Agreement or any Ancillary Agreement, or which seeks to delay or prevent the consummation of the transactions being consummated hereby or thereby; (ii) no Action is pending or, to the Knowledge of Seller, threatened, that relate to or otherwise affect any of the Transferred Assets, the Assumed Liabilities or the Business; and (iii) there are no outstanding judgments, writs, injunctions, orders, decrees or settlements that apply, in whole or in part, to any of the Transferred Assets, the Assumed Liabilities, or the Business, that restrict the ownership or use of any Transferred Assets, the Assumed Liabilities or the Business in any way.

      Section 3.09. Permits; Compliance with Laws .

           (a) All Permits required with respect to the Business have been legally obtained and maintained and are valid and in full force and effect. Seller is duly licensed to conduct the Business as presently conducted in all jurisdictions in which the Business is conducted and is in compliance with all of the terms and conditions of such licenses. There has been no material change in the facts or circumstances reported or assumed in the application for or granting of any Permits. No outstanding violations are or have been recorded in respect of

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any of the Permits. No proceeding is pending or, to Seller’s Knowledge, threatened, to suspend, revoke, withdraw, modify or limit any Permit, and, to Seller’s Knowledge, there is no fact, error or admission relevant to any Permit that would permit the suspension, revocation, withdrawal, modification or limitation of, or result in the threatened suspension, revocation, withdrawal, modification or limitation of, or in the loss of any Permit.

           (b) The Business is being and has been conducted in compliance in all material respects with all Permits and applicable Laws. Seller is not in violation of any Laws applicable to the Business by which any of the Transferred Assets is bound or affected, other than those violations which do not have a Material Adverse Effect. Except as disclosed on Schedule 3.09(b) , Seller has not taken any action, or failed to take any action, which might, to any extent, prevent, impede or result in the revocation of the vesting in Buyer of good and valid title to the Transferred Assets (or any portion thereof) free and clear of all claims and interests of creditors and equity security holders.

           (c) There are no Permits required to conduct the Business as and where it is presently being conducted and which relate specifically to the manufacturing process for wet tantalum capacitors.

           (d) Except as set forth on Schedule 3.09 hereto, Seller has not received any notification that it is in violation of any applicable building, zoning, anti-pollution, environmental, health or other Law in respect of the Business and no such violation exists.

      Section 3.10. Government Contracts .

           (a) “Government Contracts” shall mean all current Contracts pursuant to which the Business has generated and/or is expected to generate revenues in excess of $50,000: (i) between Seller and the United States Government, including any blanket purchase agreements, task orders, or other agreements thereunder; and (ii) between Seller and any entity which is a party to a Contract or other agreement with the United States Government in which Seller participates in the bid or contract process. Seller is not a party to any current dispute relating to a Government Contract. Seller has not, with respect to any Governmental Contract, received notice that Seller has breached or violated any Law, order, certification, representation, clause, provision, or requirement with respect to any such Government Contract. There are no current or, to the Knowledge of Seller, threatened claims, appeals, “Requests for Equitable Adjustment,” protests, or lawsuits (including, without limitation, any qui tam suit brought under the False Claims Act, 31 U.S.C. 3729), against Seller arising out of or relating to any Government Contract.

           (b) During the past five (5) years, Seller has not been suspended or debarred from doing business with the United States Government, nor has any such suspension or debarment action been threatened, proposed, or commenced. To the Knowledge of Seller, there is no valid basis, or specific circumstances that with the passage of time would become a basis, for Seller’s suspension or debarment from doing business with the United States Government.

           (c) Neither Seller, nor, to the Knowledge of Seller, any of Seller’s officers, directors, or employees, has knowingly provided to any person any false or misleading

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information with respect to Seller, or any of its officers, directors, equityholders or employees, in connection with the procurement of, performance under or renewal of, any Government Contract.

      Section 3.11. Insurance . Seller or its Affiliates have in place insurance policies with respect to the Transferred Assets and the Business in amounts and types that are customary in the industry for similar assets and sufficient to cover the full value of the Tangible Personal Property, and all such policies are valid and in full force and effect. Schedule 3.11 contains a complete and accurate list and an accurate summary of all property, commercial general liability, workers’ compensation and automobile liability insurance policies currently maintained relating to the Transferred Assets or the Business. Such policies, as are current, are valid and in full force and effect, all premiums due thereon have been paid, Seller and, if applicable, its Affiliates, have complied with the material provisions of such policies, and all such policies either specifically include Seller as named insured or include omnibus named insured language which generally includes Seller, and Seller or its Affiliates have not received any notification of cancellation, modification or denial of renewal of any such policies, except as set forth on Schedule 3.11 .

      Section 3.12. Employees and R