TAX MATTERS AGREEMENT

 

BY AND AMONG

 

VISHAY INTERTECHNOLOGY, INC. AND

 

VISHAY PRECISION GROUP, INC.

 

July 6, 2010

 

 

 

 

 

 

 

 

 

 

 

TAX MATTERS AGREEMENT

 

      WHEREAS, Vishay Intertechnology, Inc. (“VSH”) and Vishay Precision Group, Inc. (“VPG”), collectively the “Parties” entered into the Master Separation and Distribution Agreement dated as of June 22, 2010 (the “Distribution Agreement” ), pursuant to which (i) VSH will distribute to its stockholders all of the stock of VPG (the “Distribution”);

 

      WHEREAS, it is the intention of VSH and VPG that the Distribution qualifies as a tax-free transaction described in Section 355 of the Internal Revenue Code of 1986, as amended (the “Code” );

 

      WHEREAS, VSH has received a private letter ruling from the IRS regarding certain tax aspects of the Distribution; and

 

      WHEREAS, in contemplation of the Distribution pursuant to which VPG and certain of its direct and indirect Subsidiaries will cease to be members of the VSH Affiliated Group of which VSH is the common parent corporation, the Parties desire to set forth their agreement on the rights and obligations with respect to handling and allocating Taxes and related matters.

 

      NOW, THEREFORE, in consideration of the foregoing and the terms, conditions, covenants and provisions of this Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:

 

ARTICLE I
DEFINITIONS

 

      Section 1.1. Defined Terms . Capitalized terms used in this Agreement and not defined herein shall have the meanings set forth in the Distribution Agreement. For purposes of this Agreement, the following terms have the following meanings:

 

      “Affiliated Group” means an affiliated group of corporations (as defined in Section 1504(a) of the Code).

 

      “Final Determination” means any final determination of liability in respect of a Tax that, under Applicable Law, is not subject to further appeal, review or modification through proceedings or otherwise (including the expiration of a statute of limitations or a period for the filing of claims for refunds, amended returns or appeals from adverse determinations), including a “determination” as defined in Section 1313(a) of the Code or execution of an IRS Form 870AD.

 

      “Income Tax” means any U.S. federal, state, local or non-U.S. (i) Tax on or measured by net income or (ii) franchise Tax.

 

      “Interest” means interest at a rate per annum equal to the Prime Rate as published in the Wall Street Journal , Eastern Edition in effect from time to time during the period such interest accrues.

 

      “IRS” means the United States Internal Revenue Service.

 

      “Israeli Tax Returns” means the Income Tax Returns of VATL, Tedea Huntleigh International, Tedea Huntleigh Technology and Tedea Huntleigh Industrial Properties for 2008 and 2009 that are not filed prior to the Effective Time.

 

      “Post-Closing Tax Period” means any Tax period beginning after the Distribution Date; and, with respect to a Tax period that begins on or before the Distribution Date and ends thereafter, the portion of such Tax period beginning after the Distribution Date.

 

      “Pre-Closing Non-Income Taxes” means any Taxes of a VPG Entity other than Income Taxes that are attributable to a Pre-Closing Tax Period, provided, however, that it shall not include any such Taxes other than Transaction Taxes that are accrued as a current liability (net of any prepaid taxes) on the balance sheet of the VPG Entity at the Effective Time.

 

      “Pre-Closing Tax Period” means any Tax period ending on or before the Distribution Date; and, with respect to a Tax period that begins on or before the Distribution Date and ends thereafter, the portion of such Tax period ending on the Distribution Date.

 

      “Proceeding” means any claim, examination, suit, action, litigation, assessment or proceeding (including any Tax audit), whether administrative or judicial.

 

      “Tax ” or “ Taxes ” means all U.S. federal, state, local, or non-U.S. net or gross income, gross receipts, net proceeds, sales, use, ad valorem, value added, franchise, , withholding, payroll, employment, excise, property, deed, stamp, alternative or add-on minimum, environmental, profits, windfall profits, license, lease, service, use, occupation, severance, energy, unemployment, social security, worker’s compensation, capital, or other taxes, assessments, , or other similar governmental charges, together with any interest, penalties, additions to tax, or additional amounts with respect thereto.

 

      “Tax Asset” means any net operating loss, net capital loss, investment tax credit, foreign tax credit, charitable deduction or any other credit or tax attribute that could be carried forward or back to reduce Taxes (including without limitation deductions and credits related to alternative minimum Taxes).

 

      “Tax Item” means, with respect to any Income Tax, any item of income, gain, loss, deduction or credit.

 

      “Transaction Tax” means a Tax attributable to the Distribution or any transaction taken to facilitate the Distribution .

 

      “Treasury Regulations” means the U.S. federal income Tax regulations, as amended, including temporary regulations, promulgated under the Code.

 

      “ VATL” means Vishay Advanced Technologies, Ltd and its Subsidiaries after the Effective Time.

 

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      “ VIL Assets” means the assets of Vishay Israel Limited that are sold to VATL that are described in agreements between the parties that refer to the transfer of the (i) Foil and Thermal Shroud business and (ii) the Bonding business.

 

      “ VIL” means Vishay Israel Limited

 

      “VPG Capital Stock” means all classes or series of stock of VPG and all options, warrants, derivatives, rights to acquire stock, and other interests and instruments taken into account for purposes of determining a “50-percent or greater interest” within the meaning of Section 355(d)(4) of the Code.

 

      “VPG Entity” means any member of the VPG Group that was also a Subsidiary of VSH prior to the Distribution Date.

 

      “VPG Group” means VPG and its Subsidiaries after the Effective Time.

 

      “VPG Group Relief Loss” means an income tax loss of a VPG Entity that could be surrendered to a member of the VSH Group pursuant to the group relief system in place in the United Kingdom.

 

      “VPG Separate Tax Return” means with respect to a VPG Entity, any state or local Income Tax Return for periods that end prior to or on the Distribution Date that are not filed on an affiliated, consolidated, combined or unitary basis with one or more members of the VSH Group.

 

      “VPG Straddle Period Tax Return” means any Income Tax Return required to be filed that includes both a Pre-Closing Tax Period and a Post-Closing Tax Period of any VPG Entity.

 

      “VPG Tax Return” means any Income Tax Return required to be filed by a member of the VPG Group, other than a VSH Income Tax Return.

 

      “VPG Taxes” mean all Taxes of any member of the VPG Group that are attributable to a Post-Closing Tax Period.

 

      “VSH Consolidated Group” means, with respect to U.S. federal Income Taxes, the Affiliated Group of which VSH is a member, and with respect to any other Income Tax, any affiliated, consolidated, combined or unitary group of which any member of the VSH Group is a member.

 

      “ VSH Group ” means VSH and its Subsidiaries other than the VPG Entities.

 

      “VSH Income Tax Return” means (i) any U.S. federal Income Tax Return and any state or local Income Tax Return that has been or will be filed by or with respect to any VSH Consolidated Group on an affiliated, consolidated, combined or unitary basis for a period that ends prior to or on or includes the Distribution Date, and (ii) any VPG Separate Tax Returns.

 

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      “VSH Income Taxes” means all Income Taxes of any member of the VSH Group and any VPG Entity attributable to a Pre-Closing Tax Period, including, without limitation, (i) all Transaction Taxes that are Income Taxes, (ii) all Income Taxes resulting from the removal of the VPG Entities from any consolidated, unitary or combined Income Tax Return pursuant to the Distribution, and (iii) any Income Taxes (after reduction for any foreign tax credit utilized with respect to the inclusion) resulting from the inclusion by a VPG Entity of income pursuant to Section 951(a)(1)(A) of the Code for income of a non-U.S. VSH Group member or a VPG Entity that is attributable to a Pre-Closing Tax Period; provided, however, that VSH Income Taxes shall not include any Income Taxes(other than Transaction Taxes) for which there was an accrual for current taxes (net of any prepaid taxes) on the balance sheet of the VPG Entity at the Effective Time; and provided further that for purposes of this definition, the inclusion under Section 951(a)(1)(A) of the Code shall include only those amounts incurred through the normal operations of the business and shall not include amounts attributable to extraordinary events or to material changes in business operations.

 

ARTICLE II
ADMINISTRATIVE AND COMPLIANCE MATTERS

 

      Section 2.1. Sole Tax Sharing Agreement . Any and all existing Tax Sharing Agreements, whether written or unwritten, between any member of the VSH Group, on the one hand, and any member of the VPG Group, on the other hand, shall be terminated as of the Distribution Date as between such Parties. As of the Distribution Date, neither the members of the VPG Group nor the members of the VSH Group shall have any further rights or liabilities under any such agreement, and this Agreement shall be the sole Tax Matters Agreement between the members of the VPG Group and the members of the VSH Group.

 

      Section 2.2. Designation of Agent . VPG and each member of the VPG Group, in each case with respect to any VSH Consolidated Group of which such Person was a member on or prior to the Distribution Date, hereby irrevocably authorizes VSH to designate a member of VSH Group, or a successor of such member, as its agent, coordinator, and administrator, for the purpose of taking any and all actions (including the execution of waivers of applicable statutes of limitation) with respect to any VSH Income Tax Return which are necessary or incidental to the filing of any Tax Return, any amended Tax Return, or any claim for refund, credit or offset of Tax (even where an item or Tax Asset giving rise to an amended Tax Return or refund claim arises in a Post-Closing Tax Period) or to any Proceedings, and for the purpose of making payments to, or collecting refunds from, any Taxing Authority, in each case relating to any Pre-Closing Tax Period.

 

      Section 2.3. Preparation of VSH Income Tax Returns . VSH and the members of the VSH Group shall prepare or cause to be prepared, with assistance as needed from the members of the VPG Group, and file or cause to be filed all VSH Income Tax Returns. Such Tax Returns shall be prepared in a manner that is consistent with the prior practice of the members of the VSH Group and the VPG Entities, provided that an inconsistent position may be taken if such position would not adversely impact any VPG Entity or is required by law, as reasonably determined by VSH in good faith; provided however, for the avoidance of doubt, the consolidated tax return that includes the Distribution Date shall include a calculation of the overall foreign loss, as that term is defined in Section 904(d)(f), (“OFL”) for the group.

 

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      (a) VSH shall provide to VPG for its comments a draft of (i) the calculation of the OFL no later than 30 days prior to the due date for filing the 2010 U.S. federal consolidated Tax Return, including any extensions thereof, for the review and comment by VPG, and (ii) all VPG Separate Tax Returns and the portions of each other VSH Income Tax Return that relate to the VPG Entities (or, at VSH’s option, a pro forma Tax Return that relates solely to the VPG Entities) no later than 15 days prior to the due date for filing such Tax Return, including any extensions thereof, for the review and comments of VPG, which comments shall be given due regard, provided that any final decision with respect to the reporting of any item on such Tax Return shall be made by VSH

 

      Section 2.4. General Allocation of VSH and VPG Income . VSH will determine the items of income, gain, loss, deduction and credit of the VPG Entities to be included on each VSH Income Tax Return filed by a VSH Consolidated Group for any taxable year in which any VPG Entity ceases to be a member of the VSH Consolidated Group in good faith in accordance with Treasury Regulations Section 1.1502-76(b) (or any comparable provision of state or local law). VPG and its Affiliates shall file their respective Tax Returns for the taxable period beginning on the first day after the Distribution Date consistently with such determinations, except as otherwise required by law.

 

      (a) Transaction Treated as Extraordinary Items . For purposes of preparing any federal, state or local Income Tax Return that is filed on a consolidated, combined or unitary basis for a period that ends on the Distribution Date, or starts on the day after the Distribution Date, in determining the apportionment of income and Taxes between any Pre-Closing Tax Period and Post-Closing Tax Period, any Tax Items relating to the Distributions shall be treated as extraordinary items described in Treasury Regulations Section 1.1502-76(b)(2)(ii)(C) and shall (to the extent occurring on or prior to the Distribution Date) be allocated to Pre-Closing Tax Periods, and any Income Taxes related to such items shall be treated under Treasury Regulations Section 1.1502-76(b)(2)(iv) as relating to such extraordinary item and shall (to the extent occurring on or prior to the Distribution Date) be allocated to Pre-Closing Tax Periods.

 

      (b) Apportionment of Earnings and Profits and Tax Attributes . VSH and VPG shall jointly determine the portion, if any, of any earnings and profits, Tax Asset, or other consolidated, combined or unitary attribute to be allocated or apportioned to the VPG Entities under applicable law and in accordance with the private letter ruling received with respect to the Distribution from the IRS. VPG and all members of the VPG Group shall prepare all Tax Returns in accordance with such determination. In the event that any temporary or final amendments to Treasury Regulations are promulgated after the date of this Agreement that provide for any election to apply such regulations retroactively, then any such election shall be made only to the extent that VSH and VPG collectively agree to make such election

 

      Section 2.5. VPG Tax Returns . VPG and the members of the VPG Group shall prepare or cause to be prepared, with the assistance of the members of the VSH Group (to the extent necessary) and file or cause to be filed, all VPG Tax Returns. VPG shall provide to VSH a draft of each VPG Straddle Period Tax Return (and any VPG Tax Return with respect to a Pre-Closing Tax Period) (with copies of any relevant schedules, work papers and other documentation then available) no later than 15 days prior to the due date, including extensions, for the filing of such Tax Return, for VSH’s review and approval, which approval shall not be

 

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unreasonably withheld, delayed or conditioned. Any VPG Straddle Period Tax Return (and any VPG Tax Return with respect to a Pre-Closing Tax Period) shall be prepared in a manner consistent with the prior practice of the VSH Group and the VPG Entities, unless otherwise required by law.

 

      Section 2.6. Preparation of other Tax Returns . Except as limited by Section 2.7 below, any Tax Return required to be filed by VSH or its Subsidiaries, or VPG or its Subsidiaries for which responsibility is not specifically allocated in this Article II shall be prepared and filed by the entity that is required to file the Tax Return; provided, however, that (i) such Tax Returns shall be prepared in a manner consistent with past practice except to the extent otherwise required by law and (ii) at the request of VPG, VSH shall prepare the Israeli Income Tax Returns for filing in a timely manner by VPG as mutually agreed by VSH and VPG (iii) and provided, further however, that, at the request of VSH, VPG shall provide to VSH a copy of each such Tax Return that is prepared by VPG with respect to Taxes for which VSH is liable hereunder (with copies of any relevant schedules, work papers and other documentation then available), and if practically feasible such Tax Return shall be provided to VSH prior to the filing of such Tax Returns.

 

      Section 2.7. Amended Returns . VPG shall not, and shall not permit any of its Subsidiaries to, with respect to any VPG Entity, file an amended Tax Return, or file a Tax Return in a jurisdiction in which the VPG Entity has not previously filed a Tax Return for a Pre-Closing Period without the prior written consent of VSH, which shall not be unreasonably withheld, delayed or conditioned, except as required by law.

 

      Section 2.8. U.K. Group Relief Procedures

 

      (a) With respect to the Income Tax period ending December 31, 2009, VPG shall cause the VPG Group Relief Loss for the period to be surrendered to VSH, or its appropriate affiliate to permit the full use of the loss for such period.

 

      (b) With respect to the Income Tax period beginning on January 1, 2010, to the extent permitted by law, the parties shall allocate a VPG Group Relief Loss for the year 2010 on a closing of the books of the books basis (as opposed to an allocation based on numbers of days) for the period January 1, 2010 through the date of the Distribution (the “Pre-Closing Period”). A VPG Group Relief Loss that is allocated to the Pre-Closing Period shall be first surrendered to any other VPG Entity, up to the taxable income of such entity for the Pre-Closing Period, determined on a closing of the books basis. VPG will cause the remainder of a VPG Group Relief Loss that is allocated to the Pre-Closing Period to be surrendered to VSH or its appropriate affiliate (the “VSH Loss Amount”). If based on advice of its tax advisors, VSH reasonably determines that the VPG Group Relief Loss for 2010 cannot be allocated on a closing of the books basis, and must be allocated based on the number of days in the Pre-Closing Period as compared to the number of days in 2010, VPG will nonetheless first cause an amount of the VPG Group Relief Loss equal to the VSH Loss Amount to be surrendered to VSH or its appropriate affiliate for 2010, to the extent permitted by law, and the remainder of the VPG Group Relief Loss for the year may be surrendered to a VPG Entity.

 

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      (c) With respect to other Pre-Closing Tax Periods not addressed in 2.8(a) or 2.8(b), (i) if with respect to U.K. Income Taxes a member of the VSH Group is audited in the U.K. or files an amended U.K. Income Tax return and as a result has an Income Tax liability, which could have been offset by a VPG Group Relief Loss in those years, VPG shall cause the VPG Group Relief Loss for such period to be surrendered to VSH or it appropriate affiliate, but only to the extent a VPG Entity has not used the loss, and only to the extent permitted by Law and (ii).if with respect to U.K. Income Taxes a VPG Entity is assessed a U.K. Income Tax for which VSH would be responsible under this Agreement and the amount could have been offset by a VPG Group Relief Loss in the respective year, VPG shall cause a VPG Group Relief Loss for such period to be surrendered to such VPG Entity to the extent the VPG Group Relief Loss has not been utilized.

 

ARTICLE III
LIABILITY FOR TAXES

 

      Section 3.1. Responsibility for Income Taxes . Subject to the indemnification provided for in Section 6.1 of this Agreement, VSH shall be liable for and shall timely pay, or cause to be paid, to VPG, or at VPG’s request, the applicable Taxing Authority all VSH Income Taxes, whether payable at the time of the filing of the Tax Return, pursuant to an audit, or otherwise. The tax liability for a period that begins before and ends after the Distribution Date, shall be apportioned between VPG and VSH in a manner that reasonably reflects the portion of such tax liability attributable to VPG for the Post-Closing Tax Period, and the VPG Entities for the Pre-Closing Tax Period, respectively, as if there had been a closing of the books on the date of the Distribution. With respect to the apportionment of Income Taxes, any amounts that are determined on an annual basis, such as depreciation, Section 951(a)(1)(A) inclusions, etc., shall be apportioned between VSH and VPG based on the number of days in each of the Pre-Closing Tax Periods and the Post Closing Tax Periods, respectively. Within 15 days prior to the filing of a VPG Straddle Period Tax Return, VPG shall provide to VSH for its review and approval (which shall not be unreasonably withheld, delayed or conditioned) written notice of the Taxes allocable to VSH pursuant to this Section 3.1 and VSH shall promptly reimburse VPG for such amounts to the extent the Income Taxes attributable to the Pre-Closing Tax Periods constitute VSH Income Taxes.

 

      Section 3.2. Responsibility for Non-Income Taxes . VPG and VSH will each be responsible for one half of any Pre-Closing Non-Income Taxes that are required to be paid after the Effective Time, other than Transaction Taxes.

 

      Section 3.3. Responsibility for the Taxes that are Accrued . VPG shall be liable for all Taxes that are accrued as a current liability (net of any prepaid taxes) on the balance sheet of the VPG Entity at the Effective Time, other than Transaction Taxes.

 

ARTICLE IV
REFUNDS AND OTHER MATTERS

 

      Section 4.1. Refunds and Tax Benefits for VSH . Except as otherwise provided in Section 4.2, VSH shall be entitled to all refunds and credits of any VSH Income Taxes, and one half of any refund or credit for any Pre-Closing Non-Income Taxes, including any interest

 

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thereon, received by a VPG Entity. VPG shall promptly pay or cause to be paid to VSH all such refunds received by a VPG Entity. If in lieu of receiving any such refund a VPG Entity reduces a Tax liability with respect to a Post-Closing Tax Period VPG shall promptly pay or cause to be paid to VSH the amount of such reduction in Tax liability when such reduction occurs. It is agreed that any amounts included as prepaid taxes on the balance sheet of a VPG Entity on the Distribution Date, whether separately stated or included in the accrual for current income taxes, shall not constitute a tax refund or credit or benefit for purposes of this Agreement.

 

     Section 4.2. Carryforwards and Carrybacks . To the extent permitted by Applicable Law, VPG shall (or shall cause or permit the members of the VPG Group to) elect to relinquish any carryback of a Tax Asset to any Pre-Closing Tax Period. No Party shall be obligated to compensate any other Party for the carryforward of Tax Assets from a Pre-Closing Tax Period to a Post-Closing Tax Period or for the carryback of Tax Assets from a Post-Closing Tax Period to a Pre-Closing Tax Period. For the avoidance of doubt, if a Tax Asset arises in a Post-Closing Tax Period on a non-U.S separate company Tax Return, and it is required by law that it be carried back to a Pre-Closing Tax Period, such carryback will be permitted, and any resulting refund, credit or other benefit shall inure to VPG.

 

ARTICLE V
COVENANTS AND REPRESENTATIONS

 

      Section 5.1. Representations of VSH . VSH represents that as of the date hereof, and covenants that on the Distribution Date, it has no plan or intention to (i) become a controlling shareholder or a ten-percent shareholder of VPG after the Distribution Date within the meaning of Treasury Regulations Sections 1.355-7(d)(7) and (h) or (ii) take any action that would reasonably be expected to prevent the Distribution from qualifying as a transaction described in Section 355(a) of the Code, including any action inconsistent with the information and representations furnished to the IRS in connection with the request for a private letter ruling with respect to the Distributions or to Tax counsel in connection with the preparation of the Tax Opinion.

 

      Section 5.2. Representations of VPG . VPG and the other members of the VPG Group represent that as of the date hereof, and covenants that on the Distribution Date, it has no plan or intention to take any action that would reasonably be expected to prevent the Distribution from qualifying as a transaction described in Section 355(a) of the Code or the VPG Common Stock from being treated as “qualified property” for purposes of Section 355(c)(2) or Section 361(c)(2) of the Code, including any action inconsistent with the information and representations furnished to the IRS in connection with the request for a private letter ruling with respect to the Distributions or to Tax counsel in connection with the preparation of the Tax Opinion.

 

      Section 5.3. Covenant of VSH. VSH covenants that during the two-year period following the Distribution Date it will not take any action that could prevent the Distribution from qualifying as a transaction described in Section 355(a) of the Code.

 

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      Section 5.4. Covenants of VPG Relating to the Distribution .

 

      (a) VPG covenants and agrees that: (i) during the two-year period following the Distribution Date, no member of the VPG Group conducting an active trade or business relied upon in connection with the Distribution and Separation, which members are Tedea-Huntleigh International Ltd. and Vishay PM Onboard Ltd., will liquidate, merge or consolidate with any other Person except for the merger of Tedea-Huntleigh International Ltd. with its two wholly owned subsidiaries in which Tedea-Huntleigh International Ltd. is the surviving entity, (ii) during the two-year period following the Distribution Date, no member of the VPG Group will sell or otherwise dispose of any of its assets, except in the ordinary course of business, (iii) during the two-year period following the Distribution Date, VPG will continue (independently from VSH and with separate employees, officers and directors from VSH) the active conduct of the historic businesses relied upon in connection with the Distribution and Separation that were conducted by VPG throughout the five-year period prior to the Distributions, (iv) it will not take, nor will it permit any member of the VPG Group to take, any action inconsistent with the information and representations furnished to the IRS in connection with the request for a private letter ruling with respect to the Distribution and Separation or to Tax counsel pursuant to Section 4.3 of the Distribution Agreement, (v) during the two-year period following the Distribution Date, it will not, and will not permit any member of the VPG Group, to purchase VPG Capital Stock, (vi) during the two-year period following the Distribution Date, it will not issue VPG Capital Stock to any Person, other than pursuant to the exercise of employee, director or consultant stock options, stock awards, stock purchase rights or other employment related arrangement under any stock incentive plan in existence immediately after the Mergers, provided in each case that such stock issuance meets the requirements for the safe harbor contained in Treasury Regulations Section 1.355-7(d)(8), (vii) it will not enter into any transaction or, to the extent it has the right to prohibit any such transaction, permit such transaction to occur, or enter into negotiations to enter into any transaction that may cause the Distribution or any Separation Transaction to be treated as part of a plan or series of related transactions pursuant to which one or more persons acquire directly or indirectly VPG Capital Stock representing a “50-percent or greater interest” within the meaning of Section 355(d)(4) of the Code, and (viii) it will not take any other action that would reasonably be expected to prevent (i) the Distribution from qualifying as a transaction described in Section 355(a) of the Code or (ii) the VPG Common Stock from being treated as “qualified property” for purposes of Section 355(c)(2) or Section 361(c)(2) of the Code.

 

      (b) Notwithstanding the foregoing, a member of the VPG Group may take actions inconsistent with the covenants contained in Section 5.04(a), if:

 

           (i) VPG obtains a ruling from the IRS to the effect that such actions will not result in the Distribution being taxable to VSH or their shareholders, or

 

           (ii) VPG obtains an opinion of counsel reasonably acceptable to VSH to the same effect as Section 5.04(b)(i), provided that such opinion is reasonably acceptable to VSH.

 

      Section 5.5. Other Covenants of VPG . VPG covenants and agrees that (i) it will not, and will not cause or permit any member of the VPG Group to (A) take any action on the

 

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Distribution Date other than in the ordinary course of business or (B) make or change any Tax election, take any Tax position on any Income Tax Return, or take or omit to take any other action that results in any increased Tax liability or reduction of any Tax Asset of the VSH or the VPG Entities in respect of any Pre-Closing Tax Period or Post-Closing Tax Period.

 

ARTICLE VI
INDEMNIFICATION

 

      Section 6.1. Indemnification of VSH by VPG . VPG shall indemnify the members of the VSH Group, and hold them harmless from and against any and all damages, losses, liabilities and expenses (including reasonable expenses of investigation and reasonable attorneys’ fees and expenses in connection with any action, suit or proceeding) arising out of, without duplication:

 

      (a) Any Tax for which any member of the VPG Group is liable under this Agreement; and

 

      (b) Any Tax attributable to a misrepresentation or a breach of any warranty, covenant or obligation in this Agreement by any member of the VPG Group.

 

      Section 6.2. Indemnification of VPG by VSH . VSH shall indemnify the members of the VPG Group, and hold them harmless from and against any and all damages, losses, liabilities and expenses (including reasonable expenses of investigation and reasonable attorneys’ fees and expenses in connection with any action, suit or proceeding) arising out of, without duplication:

 

      (a) Any Tax for which any member of the VSH Group is liable under this Agreement;

 

      (b) any Tax attributable to a misrepresentation or a breach of any warranty, covenant or obligation in this Agreement by any member of the VSH Group.

 

ARTICLE VII
PAYMENTS

 

      Section 7.1. Payments under this Agreement . Any payment required to be made pursuant to this Agreement by one Party to another Party or Person shall be made according to this Section 7.01.

 

      (a) In General . All payments shall be made within the time prescribed for payment in this Agreement, or if no period is prescribed, within twenty days after delivery of written notice of the payment due and owing (and to the extent applicable, approval of the amount of such payment), together with a schedule calculating in reasonable detail the amounts that are due and owing. Payments shall be deemed made when received. Any payment that is not made when due shall bear Interest, provided, however , to the extent the amount due and owing is Taxes, such amount shall not begin to accrue Interest pursuant to this Section 7.01(a) until the later of the time prescribed for payment pursuant to this Agreement or the time such Taxes are actually paid by the indemnified Party.

 

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      (b) Treatment of Payments .

 

           (i) Payments made pursuant to this Agreement by any member of the VPG Group to or on behalf of any member of the VSH Group shall be treated for all Tax purposes as distributions by VPG to VSH occurring immediately before the Distribution, and none of the Parties shall take any position inconsistent with such treatment, except to the extent that a Final Determination with respect to the recipient Party causes any such payment to not be so treated.

 

           (ii) Payments made pursuant to this Agreement by any member of the VSH Group to or on behalf of any member of the VPG Group shall be treated for all Tax purposes as a reduction in the distribution occurring before the Distribution, or a contribution to VPG by VSH immediately prior to the Distribution and none of the Parties shall take any position inconsistent with such treatment, except to the extent that a Final Determination with respect to the recipient Party causes any such payment to not be so treated.

 

      (c) Except as provided in Article 9 of this Agreement, in calculating amounts payable to an indemnified Party, the amount of indemnification payable pursuant to this Agreement shall be computed net of any Tax benefit actually realized by the indemnified Party or any of its Affiliates that is related or attributable to such indemnification.

 

      (d) If any amount paid by an indemnifying Party pursuant to this Agreement results in any increase in Tax liability or any reduction of a Tax Asset of the indemnified Party, the indemnifying Party shall indemnify the indemnified Party and hold it harmless from any interest or penalty attributable to such increased Tax liability or reduced Tax Asset and shall pay to the indemnified Party, in addition to amounts otherwise owed, an additional amount necessary to reflect the Tax consequences of the receipt or accrual of the relevant payment.

 

ARTICLE VIII
PROCEEDINGS

 

      Section 8.1. Notice . Within ten Business Days after a Party receives a written notice or other information from a Taxing Authority of the existence of a Tax issue relating to the application of Section 355(e) to the Distributions, relating to the qualification of the Distribution as tax-free transactions described in Section 355 of the Code or that may require indemnification pursuant to this Agreement (a “ Tax Claim ”) such Party shall notify the other Party to this Agreement of such issue, and thereafter shall promptly forward to the other Parties copies of notices and material communications with any Taxing Authority relating to the Tax Claim. The failure of one Party to notify the other Party of any Tax matter shall not relieve such other Party of any liability and/or obligation which it may have under this Agreement with respect to such Tax matter, except to the extent that the indemnifying Party’s rights under this Agreement are materially prejudiced by such failure.

 

      Section 8.2. Proceedings Generally.

 

      (a) Proceedings Relating to Income Taxes for Pre-Closing Tax Periods. VSH, at its expense, shall control the defense and settlement of any Proceeding relating to Income Taxes attributable to a Pre-Closing Tax Period, provided however, that VPG shall be entitled to

 

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participate in the defense of such Proceeding at its own cost and expense, including the right to attend (or participate in), any meetings (or material conference calls with respect to which VSH has reasonable advance notice) with Taxing Authorities or before any judicial authorities in connection with such Proceeding; VSH shall in good faith keep VPG informed of all developments relating to such Proceeding on a timely basis, shall in good faith afford VPG the opportunity to review any submissions related to such Proceeding, shall provide VPG with final copies of any submissions, and, to the extent such Proceeding could reasonably result in adverse tax consequences to the VPG Group with respect to Post-Closing Tax Periods, shall not unreasonably reject any suggestions made by VPG with respect to such Proceeding, and VSH shall not settle or compromise such Proceeding without the consent of VPG, which consent shall not be unreasonably withheld, delayed or conditioned. VPG will fully cooperate and assist VSH in a Proceeding that VSH controls pursuant to this Section 8.2(a), including making available personnel and books and records as reasonably requested by VSH. The Parties shall in good faith cooperate with each other in connection with such Proceeding and provide such information to each other as may be necessary or useful with respect to such Proceeding in a timely manner.

 

      (b) Proceedings Relating to Non-Income Taxes for Pre-Closing Periods . VPG, at its expense , shall control the defense and settlement of any Proceeding relating to any Pre-Closing Non-Income Taxes, provided, however, that VSH shall be entitled to participate in the defense of such Proceeding at its own cost and expense including the right to attend (or participate in), any meetings (or material conference calls with respect to which VPG has reasonable advance notice) with Taxing Authorities or before any judicial authorities in connection with such Proceeding; VPG shall keep VSH informed of all developments relating to such Proceeding on a timely basis, shall in good faith afford VSH the opportunity to review any submissions related to such Proceeding, shall not unreasonably reject any suggestions made by VSH with respect to such Proceeding, and shall provide VSH with final copies of any submissions; and VPG shall not settle or compromise such Proceeding without the consent of VSH , which consent shall not be unreasonably withheld, delayed or conditioned. VSH will fully cooperate and assist VPG in a Proceeding that VPG controls pursuant to this Section 8.2(a), including making available personnel and books and records as reasonably requested by VPG. The Parties shall in good faith cooperate with each other in connection with such Proceeding and provide such information to each other as may be necessary or useful with respect to such Proceeding in a timely manner.

 

      (c) If, with respect to any Proceeding described in this Article 8 the Party responsible for controlling the Proceeding (the “Defaulting Party”) fails to diligently prosecute, manage and defend the Tax Claim by failing to respond in a timely manner to inquires by a Taxing Authority, or failing to meet a material filing deadline or by a similar action or inaction and either the other Party (the “ Defending Party ”) could reasonably be subject to adverse tax consequences if such Tax Claim is not prosecuted, the Defending Party shall thereafter have the right (but not the obligation) to defend or prosecute, at the sole cost, expense and risk of the Defaulting Party, such Tax Claim. The Defending Party shall have full control of such defense or prosecution and such Proceedings, including any settlement or compromise thereof. If requested by the Defending Party, the Defaulting Party shall cooperate in good faith with the Defending Party and its authorized representatives in order to contest effectively such claim. In the case of any claim with respect to Taxes that is defended or prosecuted by the Defending Party pursuant to this Section 8.2(c), the Defending Party shall, from time to time, be entitled to current

 

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payment from the Defaulting Party with respect to costs and expenses incurred by the Defending Party in connection with such defense or prosecution (including, without limitation, reasonable attorneys’, accountants’, and experts’ fees and disbursements, settlement costs, court costs, and any other costs or expenses for investigating, defending or prosecuting such claim, in each case on an after tax basis.

 

ARTICLE IX
SPECIFIC COVENANT WITH RESPECT TO ASSET SALE

 

      Section 9.1. Transaction . It is expected that the sale of the VIL Assets to VATL (the “ VIL Asset Sale ”) will not create any cash tax liability for VIL in Israel in the tax year of the sale because of the ability to offset the any gain on the transaction against the existing net operating loss (“ NOL ”) in VIL.

 

      Section 9.2. Filing of Tax Return. VSH will actively pursue obtaining an opinion or other acceptable form of advice from its Israeli tax advisors that confirms at a “more likely than not” or higher level of comfort that the NOL may be used by VIL to offset any gain on the sale of the VIL Assets (the “ Advice ”). Provided that VSH receives such Advice, VSHagrees that the Tax Return for VIL that includes the VIL Asset Sale shall be prepared and filed on the assumption that the NOL of VIL offsets the gain on the VIL Asset Sale and VSH shall not and shall not permit any member of the VSH Group to take a different position on any Tax Return or in any discussion, whether written or oral, with any Tax Authorities.

 

      Section 9.3. Impact of Transaction. If a Final Determination is reached that the NOL cannot be used to offset the gain, (as opposed to a determination that the NOL is not sufficiently large to offset the gain, or some other reason), then VATL shall make a payment to VSH as follows:

 

      (a) To the extent VATL has been able to amortize or depreciate the VIL Assets and realize a reduction in its tax, the aggregate amount of such reduction actually realized by the time of the Final Determination shall be paid by VATL to VSH within 15 days of the Final Determination.

 

      (b) To the extent the VIL Assets at the time of the Final Determination have not been fully amortized or depreciated for tax purposes by VATL, and a deferred tax asset is recorded on the books of VATL for the future tax benefit of the amortization or depreciation of the VIL Assets and there is no valuation allowance or similar impairment taken against the deferred tax asset, within 30 days after the Final Determination VATL shall pay to VSH the net present value of the deferred tax benefit. The net present value shall be determined using a discount rate equal to the rate of Interest in effect on the date of the Final Determination.

 

      (c) In no event shall the amount payable by VPG pursuant to this Section 9.3 exceed the Tax liability of VIL that arises solely by virtue of the inability to apply its NOL to offset the gain recognized on the VIL Asset Sale.

 

      Section 9.4. Advice Not Received If the Israeli tax advisors are unable to render the Advice, and because of that the VIL Tax Return does not offset the gain on the sale of the VIL Assets with the NOL, VATL shall make a payment to VSH as follows :

 

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      (a) If a deferred tax asset is recorded on the books of VATL for the future tax benefit of the amortization or depreciation of the VIL Assets and there is no valuation allowance or similar impairment taken against the deferred tax asset, within 30 days after VSH pays the Taxes due on the VIL Asset Sale VATL shall pay to VSH the net present value of the deferred tax benefit. The net present value shall be determined using a discount rate equal to the rate of Interest in effect on the date of the payment .

 

      (b) In no event shall the amount payable by VPG pursuant to this Section 9.4 exceed the Tax liability of VIL that arises solely by virtue of the inability to apply its NOL to offset the gain recognized on the VIL Asset Sale.

 

      Section 9.5. Audit Management. Notwithstanding anything to the contrary in the this Agreement, if VSH or a VSH Group member receives notice, whether written or otherwise, that the Israeli tax authorities may challenge the ability to offset the gain on the VIL asset sale with the NOL, VSH shall promptly notify VPG. The control of such Proceedings and the settlement shall be handled as provided in section 8.2(a) of this Agreement.

 

ARTICLE X
MISCELLANEOUS PROVISIONS

 

      Section 10.1. Cooperation . The Parties shall each cooperate fully (and each shall cause its respective Affiliates to cooperate fully) with all reasonable requests from the other Parties, or from an agent, representative or advisor to such Parties, including the delivery of information, documents access to employees etc, in connection with the preparation and filing of Tax Returns, claims for refund, Proceedings, and other matters, in each case, related to Taxes covered by this Agreement, and with respect to the preparation by VPG of a claim for an R&D credit (as provided by Section 41 of the Code) with respect to the first or second Post-Closing Tax Period following the Distribution Date.

 

      Section 10.2. Notices . All notices, requests and other communications to any Party hereunder shall be in writing (including facsimile transmission) and shall be given,

 

    if to VSH, to: 

 

      Vishay Intertechnology, Inc.
      63 Lancaster Avenue
      Malvern, PA 19355-2120
      Attention: Dr. Lior E. Yahalomi, Chief Financial Officer
      Facsimile: 610.889.2161

 

    with a copy (which shall not constitute notice) to:

 

      Kramer Levin Naftalis & Frankel LLP
      1177 Avenue of the Americas
      New York, NY 10036
      Attention: Ernest S . Wechsler, Esq.
      Facsimile: 212.715.8000

 

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   if to VPG, to: 

 

     Vishay Precision Group, Inc.
     3 Great Valley Parkway
     Suite 150 Malvern, Pa. 19355
     Attention: William M. Clancy, Chief Financial Officer
     Telephone: 484.321.5306
     Facsimile: 484.321.5301

 

   with a copy (which shall not constitute notice) to:

 

     Pepper Hamilton LLP
     3000 Two Logan Square
     18 th & Arch Streets
     Philadelphia, PA 19103
     Attention: Barry M. Abelson, Esq.
     Facsimile No.: 215.689.4803

 

or to such other address or facsimile number as such Party may hereafter specify for the purpose by notice to the other Parties hereto. All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. on a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed to have been received on the next succeeding Business Day in the place of receipt.

 

     Section 10.3. Changes in Law .

 

      (a) Any reference to a provision of the Code, Treasury Regulations, or a law of another jurisdiction shall include a reference to any applicable successor provision or law.

 

      (b) If, due to any change in Applicable Law or regulations or their interpretation by any court of law or other governing body having jurisdiction subsequent to the date hereof, performance of any provision of this Agreement or any transaction contemplated hereby shall become impracticable or impossible, the Parties hereto shall use their commercially reasonable best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such provision.

 

     Section 10.4. Binding Effect; Benefit; Assignment .

 

      (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and assigns. No provision of this Agreement is intended to confer any rights, benefits, remedies, obligations or liabilities hereunder upon any Person other than the Parties hereto and their respective successors and assigns.

 

      (b) No Party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of each other Party hereto.

 

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      Section 10.5. Authority . Each of the Parties hereto represents to each of the other Parties that (a) it has the corporate power (corporate or otherwise) and authority to execute, deliver and perform this Agreement, (b) the execution, delivery and performance of this Agreement by it have been duly authorized by all necessary corporate or other action, (c) it has duly and validly executed and delivered this Agreement, and (d) this Agreement is a legal, valid and binding obligation, enforceable against it in accordance with its terms subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and general equity principles.

 

      Section 10.6. Entire Agreement . This Agreement, the Distribution Agreement, and the other Ancillary Agreements constitute the entire agreement between the Parties with respect to the subject matter of this Agreement and supersede all prior agreements and understandings, both oral and written, between the Parties with respect to the subject matter of this Agreement.

 

      Section 10.7. Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflicts of law rules of such state.

 

      Section 10.8. Counterparts; Effectiveness . This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each Party hereto shall have received a counterpart hereof signed by all of the other Parties hereto. Until and unless each Party has received a counterpart hereof signed by the other Party hereto, this Agreement shall have no effect and no Party shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication).

 

      Section 10.9. Severability . If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other Governmental Authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon such a determination, the Parties shall negotiate in good faith to modify this Agreement so as to affect the original intent of the Parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the fullest extent possible.

 

      Section 10.10. Waiver and Amendment .

 

      (a) Any provision of this Agreement may be amended or waived prior to the Effective Time if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each Party to this Agreement or, in the case of a waiver, by each Party against whom the waiver is to be effective.

 

      (b) No failure or delay by any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof

 

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preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by Applicable Law.

 

     Section 10.11. Interpretation .

 

      (a) When a reference is made in this Agreement to an Article or Section, such reference shall be to an Article or Section of or to this Agreement unless otherwise indicated.

 

      (b) Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.”

 

      (c) Unless the context requires otherwise, the terms “hereof,” “herein,” “hereby,” “hereto” and derivative or similar words in this Agreement refer to this entire Agreement.

 

      (d) Unless the context requires otherwise, words in this Agreement using the singular or plural number also include the plural or singular, respectively, and the use of any gender herein shall be deemed to include the other gender.

 

      (e) Except as otherwise specifically provided herein, where any action is required to be taken on a particular day and such day is not a Business Day and, as a result, such action cannot be taken on such day, then this Agreement shall be deemed to provide that such action shall be taken on the first Business Day after such day.

 

      (f) This Agreement was prepared jointly by the Parties and no rule that it be construed against the drafter will have any application in its construction or interpretation.

 

      Section 10.12. Headings . The headings contained in this Agreement are inserted for convenience only and shall not be considered in interpreting or construing any of the provisions contained in this Agreement.

 

      Section 10.13. Exclusivity . Except as otherwise explicitly provided in the Distribution Agreement, all matters related to Taxes or Tax Returns of the Parties shall be governed by this Agreement. In the event of a conflict, this Agreement shall govern and control. Notwithstanding any other provision of this Agreement, in no event shall any Party or any other Person be liable for any Taxes, expenses or any other losses or damages of any kind pursuant to this Agreement or otherwise except as expressly set forth herein or in the Distribution Agreement.

 

      Section 10.14. Dispute Resolution . Any disputes arising under this Agreement shall be resolved by applying Sections 8.2 and 8.3 of the Distribution Agreement, provided however, that to the extent the dispute is to an amount of Tax, or an amount or allocation of a Tax Asset, the mediator referenced in Section 8.2(d) shall, to the extent possible, be a person with a national reputation as an expert in U.S. federal income tax.

 

      Section 10.15. Survival . The covenants and agreements of the Parties hereunder (including indemnification of the Parties) shall survive until 90 days following the expiration of

 

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the applicable statute of limitations (taking into account all extensions thereof), if any, of the claim that gave rise to the indemnification. Notwithstanding the foregoing, in the event of notice for indemnification has been given within the applicable survival period, such indemnification shall survive until such time as such claim is finally resolved.

 

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      IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

 

VISHAY INTERTECHNOLOGY, INC.
/s/ Lior E. Yahalomi
Name:	Lior E. Yahalomi
Title:	Executive Vice President and Chief Financial Officer
VISHAY PRECISION GROUP, INC.
/s/ William M. Clancy
Name:	William M. Clancy
Title:	Executive Vice President and Chief Financial Officer

TRADEMARK LICENSE AGREEMENT

 

      This Trademark License Agreement (this “Agreement”) is entered into as of July 6, 2010 (the “Effective Date”), by and between Vishay Intertechnology, Inc., a corporation organized under the laws of the State of Delaware (“VSH”) and Vishay Precision Group, Inc., a corporation organized under the laws of the State of Delaware (“VPG”).

 

RECITALS

 

      WHEREAS, VSH owns all right, title and interest in and to the Name (as hereinafter defined) and Mark (as hereinafter defined) VISHAY, used alone or in connections with other terms;

 

      WHEREAS, VPG desires to use the Licensed Marks (as hereinafter defined) on and in connection with the design, development, manufacture, marketing, provision and performance of VPG Products and Services (as hereinafter defined);

 

      WHEREAS, VSH is willing to grant to VPG, and VPG is willing to accept, the right to use the Licensed Marks in accordance with and subject to the terms of this Agreement.

 

      NOW, THEREFORE, in consideration of the mutual promises, covenants, agreements, representations and warranties contained herein, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby agree, intending to be legally bound, as follows:

 

ARTICLE 1
LICENSE OF RIGHTS

 

      Section 1.1. Rights Licensed . Subject to the terms of this Agreement, VSH hereby grants to VPG, and VPG hereby accepts, a limited, exclusive, royalty-free right and license, to use, directly or indirectly through subcontractors, the Marks (as defined below) and Names (as defined below) listed on Schedule A (the “Licensed Marks”) in connection with the design, development, manufacture, marketing, provision and performance of the products and services of VPG listed on Schedule B (the “VPG Products and Services”). Any use of the Licensed Marks on products other than those on Schedule B is subject to advance written approval by VSH. As used herein, “Mark” shall mean any trademark, service mark or logo, and “Name” shall mean any entity name or trade name.

 

      Section 1.2. Special ‘Mil’ Rights and SCDs (Customer Source Control Drawings) Licensed . In recognition of the cost, difficulty and bureaucracy involved in attempting to change the voluminous documentation and specifications related to foil resistor products qualified to the Mil spec system used by the military and other special needs customers, this Mil rights license grant is made. Subject to the terms of this Agreement, VSH hereby grants to VPG, and VPG hereby accepts, a limited, exclusive, royalty-free right and license, to display VISHAY alone (i.e. without any other terms) (the “Licensed Mil Mark”) as a marking on foil resistor products qualified to the Mil spec system, i.e. built on “Mil Qualified” product lines or SCDs (Customer Source Control Drawings), existing as of the Effective Date or referred to in Mil drawings or

 

SCDs (Customer Source Control Drawings) existing as of the Effective Date, and on Mil drawings and SCDs relating thereto.

 

      Section 1.3. Term and Territory . The licenses granted hereby shall be in perpetuity so long as this Agreement has not been terminated by its terms (the “Term”) and shall apply throughout the world (the “Territory”). In the event the Term terminates, VPG agrees that within twenty-four (24) months thereafter, VPG will change its corporate name so as not to include the term VISHAY.

 

      Section 1.4. Rights in VPG . For the avoidance of doubt, this Agreement shall not restrict VPG from using the acronym “VPG” in any Name, or in any Mark, so long as such Name or Mark does not contain VISHAY (except as otherwise permitted pursuant hereto).

 

      Section 1.5. Document and Part Numbers . VPG shall be permitted to use any document number on data sheets, package drawings, instructions or other materials posted to the internet (each a “Document Number”) or any SKU number, part number, or other number and/or letter sequence printed on or identified with any part (each a “Part Number”) on or in connection with VPG Products and Services, so long as such Document Number or Part Number does not contain the prefix or suffix VSH.

 

      Section 1.6. VPG Acknowledgement . VPG acknowledges and agrees that: (i) VSH is the sole and exclusive owner of all right, title and interest in and to the Licensed Marks; (ii) all goodwill associated with the Licensed Marks shall inure to the sole and exclusive benefit of VSH; and (iii) nothing in this Agreement or any related agreement, instrument or document shall be construed to give VPG any legal or beneficial ownership interest in or title to the Licensed Marks.

 

      Section 1.7. Absence of VSH Representations . VPG agrees and acknowledges that VSH makes no representation or warranty with respect to: (i) VSH’s right, title and interest in and to the Licensed Marks, (ii) the absence of any action related to or concerning the Licensed Marks, the outcome of which could be materially adverse to the rights granted to VPG under this Agreement; or (iii) the absence of any claim, or basis for any claim, that the use of the Licensed Marks by VPG under this Agreement violates the rights of any person.

 

      Section 1.8. Restrictions .

 

           (a) During the Term, and subject to section 1.8(e), VSH shall not, under a Mark or Name which includes the term VISHAY immediately followed by the term PRECISION: (i) directly or indirectly, design, develop, manufacture, market or provide any products, except to the extent such usage exists (and limited to those products with respect to which such usage exists) immediately following the Effective Date; or (ii) use such Mark or Name in connection with any aspect of its business, operations or affairs, whether conducted directly or indirectly, and whether or not such usage would otherwise require permission of VPG, except to the extent such usage is not otherwise prohibited by clause (i) of this paragraph. Without limitation, the foregoing restriction shall apply to the legal name or fictitious name (“d/b/a”) of any subsidiary of VSH or any other entity under the control of VSH.

 

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           (b) During the Term, VSH shall not, under a Mark or Name which includes the acronym “VPG”: (i) directly or indirectly, design, develop, manufacture, market or provide any products that overlap (i.e. compete) with any products within the product range of VPG or any of its subsidiaries as constituted immediately following the Effective Date; or (ii) use such acronym in connection with any aspect of its business, operations or affairs, whether conducted directly or indirectly, and whether or not such usage would otherwise require permission of VPG, except to the extent such usage is not otherwise prohibited by clause (i) of this paragraph. Without limitation, the foregoing restriction shall apply to the legal name or fictitious name (“d/b/a”) of any subsidiary of VSH or any other entity under the control of VSH.

 

           (c) During the Term, except as otherwise permitted pursuant to this Agreement, VPG shall not, under a Mark or Name which includes the term VISHAY INTERTECHNOLOGY or VISHAY, or under the acronym VSH: (i) directly or indirectly, design, develop, manufacture, market or provide any products that overlap (i.e. compete) with any products within the product range of VSH or any of its subsidiaries as constituted immediately following the Effective Date; or (ii) use such Mark, Name or acronym in connection with any aspect of its business, operations or affairs, whether conducted directly or indirectly, and whether or not such usage would require permission of VSH, unless the term VISHAY is immediately followed by the term PRECISION (so long as the term PRECISION has no less prominence than the term VISHAY and such Name does not include the term VISHAY together with the term INTERTECHNOLOGY), except to the extent such usage is not otherwise prohibited by clause (i) of this paragraph. Without limitation, the foregoing restriction shall apply to the legal name or fictitious name (“d/b/a”) of any subsidiary of VPG or any other entity under the control of VPG.

 

           (d) For the avoidance of doubt, nothing in this Section 1.8 shall be construed to impose any restriction on the right of VPG to use the corporate name “Vishay Precision Group, Inc.” (i) in association with its business with respect to the VPG Products and Services, or (ii) with respect to the design, development, manufacture, marketing, provision or performance of goods and services other than the VPG Products and Services, so long as such other goods and services are not designed, developed, manufactured, marketed, provided or performed under a Mark containing the term VISHAY.

 

           (e) For the avoidance of doubt, nothing in this Section 1.8 shall be construed to impose any restriction on the right of VSH to use the term PRECISION in a descriptive manner (but not as a Mark or Name) in connection with the design, development, manufacture, marketing, provision or performance of any goods or services, so long as the term PRECISION does not immediately follow the term VISHAY. A non-exhaustive, representative list of descriptive uses of the term PRECISION permissible by VSH, in marketing materials, engineering documents, data handbooks and packaging and similar materials, is shown on Schedule C.

 

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ARTICLE 2
STANDARDS AND COMPLIANCE

 

      Section 2.1. Standards . All VPG Products and Services designed, developed, manufactured, marketed, provided or performed under the Licensed Marks, as applicable, shall be of high quality, free of material defects and performed with integrity and in a professional manner and shall be in compliance with applicable law (the “Standards”).

 

      Section 2.2. Compliance Procedures .

 

           (a) VPG shall maintain appropriate process and quality controls with respect to the VPG Products and Services designed, developed, manufactured, marketed, provided or performed under the Licensed Marks to assure compliance with the Standards.

 

           (b) VSH, itself or through its representatives, shall have the right to request and receive from VPG, from time to time at reasonable intervals and upon payment to VPG of its reasonable charges, representative samples of VPG Products and copies of all marketing materials for VPG Products and Services designed, developed, manufactured, marketed, provided or performed under the Licensed Marks (“Promotional Materials”). If, in the commercially reasonable judgment of VSH, any VPG Products and Services or Promotional Materials do not conform to the Standards or are not otherwise in accord with this Agreement, VSH shall so notify VPG, and the parties shall work together in good faith in order that VPG will remedy such non-conformity or non-compliance. Any dispute under this Section shall be resolved in accordance with the resolution procedures referred to in Section 5.16.

 

      Section 2.3. Transition Period Activities . Notwithstanding anything to the contrary herein, VPG shall be permitted to use the Licensed Marks in the manner and for the periods set forth below.

 

           (a) Products: From the Effective Date until December 31, 2012 (the “Initial Period”), VPG shall have the right to display VISHAY alone (i.e. without any other terms) as a marking on foil resistor products provided to any and all customers, and in drawings relating thereto. For a subsequent period of twenty-four (24) months following the Initial Period, i.e. until December 31, 2014, VPG shall have the right to sell existing inventory of foil resistor product displaying the marking VISHAY to VPG customers in existence as of the last day of the Initial Period. Beginning January 1, 2015, VPG shall have no right, other than as permitted by Section 1.2, to display VISHAY alone as a marking on any product or in any drawings.

 

           (b) Literature: For a period of twelve (12) months following the Effective Date, VPG shall have the right to distribute marketing materials, Data sheets, business cards, letter heads and forms displaying the term VISHAY in the manner such term in displayed in such materials as of the Effective Date. After that time, all marking of VPG literature shall comply with the terms of the license grants hereunder.

 

           (c) Signage: For a period of twelve (12) months following the Effective Date, VPG shall have the right to display the term VISHAY on office signage in the

 

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manner such term is displayed as of the Effective Date. After that time, all VPG signage shall comply with the terms of the license grants hereunder.

 

ARTICLE 3
ADDITIONAL MARKS; REGISTRATION OF MARKS; ENFORCEMENT

 

      Section 3.1. Additional Licensed Marks . If VPG proposes to use any Mark or Name containing VISHAY that is not on Schedule A, prior to such use, VPG shall notify VSH in advance in writing, unless the term PRECISION immediately follows the term VISHAY in such Mark or Name (with the term PRECISION having no less prominence than the term VISHAY) and such Mark or Name does not include the term VISHAY together with the term INTERTECHNOLOGY. If VSH does not object in writing within thirty (30) business days after receipt of such notice, VSH shall be deemed to have approved the use of such Mark for the VPG Products and Services only, such Mark shall be deemed to be a Licensed Mark and such Mark shall be added to Schedule A. If VSH shall object to the use of a Mark by VPG, the parties shall resolve their dispute with respect to such objection in accordance with the resolution procedures referred to in Section 5.16. During the Term, VPG shall be permitted to use any Mark or Name in which the term VISHAY is immediately followed by the term PRECISION (so long as the term PRECISION has no less prominence than the term VISHAY and such Mark or Name does not contain the term VISHAY together with the term INTERTECHNOLOGY), on or in connection with the VPG Products and Services, without the need to seek consent to such use by VSH, and upon notification by VPG to VSH of any such use, such Mark or Name shall be added to Schedule A.

 

      Section 3.1. Registration of Licensed Marks . At VPG’s reasonable request and expense, VSH shall: (i) take all reasonably necessary steps to procure registration of any of the Licensed Marks for the VPG Products and Services; and (ii) maintain any and all such registrations in full force and effect during the Term so long as such Licensed Mark is being used by VPG, and VPG shall, at its sole expense, cooperate with VSH in connection with the forgoing. VPG shall not seek to register any of the Licensed Marks or any similar Marks, unless authorized by VSH in writing, and such registration shall be held by VPG on behalf of VSH.

 

      Section 3.2. Domain Names . VSH hereby licenses to, and approves of the use by VPG of the internet domain names containing the term VISHAY listed on Schedule D (“Licensed Domain Names”). VPG agrees that, in securing the registration of such domain names, it has acted as agent of VSH. If VPG proposes to secure the registration of any additional domain name containing the term VISHAY, it shall notify VSH in advance in writing, unless the term PRECISION immediately follows the term VISHAY in such domain name and such domain name does not include the term VISHAY together with the term INTERTECHNOLOGY. If VSH does not object in writing within thirty (30) business days after receipt of such notice, VSH shall be deemed to have approved VPG’s registration of such any such domain name, such domain name shall be deemed to be a Licensed Domain Name and such domain name shall be added to Schedule D. If VSH shall object to the registration of a domain name by VPG, the parties shall resolve their dispute with respect to such objection in accordance with the resolution procedures referred to in Section 5.16. Without the written consent of VSH, under no circumstances shall VPG transfer or assign the registration of any Licensed Domain

 

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Name to any person other than a wholly-owned subsidiary without the written consent of VSH or any other person to whom VPG is permitted to assign sublicense or otherwise transfer its rights under this Agreement pursuant to Section 5.5.

 

      Section 3.3. Display of Marks . The parties agree that it is in their mutual best interest that, and shall cooperate so that, subject to Section 1.2, the Licensed Marks utilized by VPG shall appear distinctive from Marks utilized by VSH, and the Marks utilized by VSH shall appear distinctive from the Licensed Marks utilized by VPG. Any dispute with respect to the appearance of a Licensed Mark or a VSH Mark shall be resolved in accordance with the resolution procedures referred to in Section 5.16.

 

      Section 3.4. Legal Notices . VPG shall, to the extent commercially practicable, place appropriate notices (e.g. ® or ™) to designate the Licensed Marks as trademarks or service marks.

 

      Section 3.5. Enforcement .

 

           (a) VPG shall, at its own reasonable expense, cooperate fully and promptly with VSH in the protection of VSH’s rights in the Licensed Marks, in such manner and to such extent as VSH may reasonably request.

 

           (b) Each party shall promptly advise the other party in writing of any actual or potential infringement, or any other unauthorized use of or violation of any of the Licensed Marks of which it becomes aware (each an “Infringement”). VSH may take such action as it, in its sole discretion, deems necessary or advisable to stop any Infringement. VPG may request in writing that VSH institute an action to stop an Infringement. If VSH receives such a written request and does not institute such action within thirty (30) days, VPG shall be entitled to institute such action as it deems necessary or advisable to stop the Infringement, in which VSH shall be entitled to join. The party not taking the lead in any action shall cooperate fully with the other party at the other party’s reasonable request and expense.

 

           (c) Any monetary recovery or sums obtained in settlement of any action to stop an Infringement shall be allocated between VSH and VPG as shall be fair and equitable, taking into account their actual out-of-pocket costs and expenses, including reasonable attorneys’ fees, and the damages sustained by each of them. Any dispute with respect to the allocation of recoveries shall be resolved in accordance with the resolution procedures referred to in Section 5.16.

 

ARTICLE 4
TERMINATION

 

      Section 4.1. Termination by VSH .

 

           (a) This Agreement may be terminated by VSH if:

 

                (i) VPG shall (x) willfully, intentionally and in bad faith breach any material provision of this Agreement or (y) willfully, intentionally and in bad

 

-6-

 

faith fail to cure any other breach, (A) if under clause (x), such breach is not capable of cure; or (B) if under either clause (x) or (y), such breach is capable of cure, VSH has given written notice of such breach to VPG, and such breach has not been cured, or VSH has not commenced taking (and is not continuing to take) reasonable bona fide steps to cure such breach, within sixty (60) days of such notice; or

 

                (ii) subject to and except as otherwise provided in Section 5.5, VPG shall, without the written consent of VSH, willfully and intentionally and in bad faith purport to assign, delegate or otherwise transfer any of its rights, benefits, powers, duties responsibilities or obligations under this Agreement in violation of this Agreement; or

 

                (iii) VPG shall abandon the use of the Licensed Marks; or

 

                (iv) VPG shall file a petition under Chapter 7 of the U.S. Bankruptcy Code, or a petition under Chapter 7 of the U.S. Bankruptcy Code shall be filed involuntarily against VPG and shall not be dismissed within 90 days after VPG receives notice of such filing.

 

           (b) To effect the termination of this Agreement, VSH shall deliver to VPG a written notice of termination, which notice shall specify the basis therefor in reasonable detail and an effective date of termination not less than ninety (90) days after the date of delivery to VPG of the notice. If VPG disputes the right of VSH to terminate this Agreement under any of clauses (i), (ii) or (iii) of Section 4.1(a) and invokes the dispute resolution procedures referenced in Section 5.16 no later than fifteen (15) days after VPG has received notice of termination from VSH, and within such fifteen (15) day period provides notice thereof to VSH in writing, then if and only so long as VPG is in compliance with the procedures referenced in Section 5.16, termination shall not be deemed effective until (i) it shall be determined in accordance with the procedures referenced in Section 5.16 that VSH is entitled to terminate this Agreement or (ii) the parties shall otherwise agree.

 

           (c) If VPG in good faith disputes that VSH has a valid basis for termination, the parties shall resolve such dispute in accordance with the resolution procedures referred to in Section 5.16.

 

           (d) Nothing in this Section shall relieve VPG of liability for breach of this Agreement, whether or not VSH is entitled to terminate this Agreement on account of such breach.

 

      Section 4.2. Termination of Rights . Upon the termination of this Agreement, all rights of VPG granted hereunder shall terminate, and any registration of the foregoing by VPG shall, at VSH’s discretion, be abandoned or transferred to VSH. Notwithstanding the foregoing, VPG shall have the right to dispose of its then existing inventory of VPG Products and/or Promotional Materials bearing the Licensed Marks for a period of up to one (1) year from the date of termination of this Agreement. All costs associated with the foregoing shall be borne by VPG.

 

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      Section 4.3. Survival . All rights and remedies of the parties in respect of any breach of this Agreement occurring prior to the effective date of its termination shall survive the termination of this Agreement. In addition, the following provisions of this Agreement shall explicitly survive its termination: Section 1.6 (“VPG Acknowledgment”); Section 1.7 (“Absence of VSH Representations”); Section 4.1(d) (“Termination by VSH”); Section 4.2 (“Termination of Rights”); this Section 4.3 (“Survival”); and Article 5 (“Miscellaneous”).

 

-8-

 

      Section 5.2. Further Assurances . In addition to the actions specifically provided for elsewhere in this Agreement, VSH and VPG agree to execute or cause to be executed and to record or cause to be recorded such other agreements, instruments and other documents, and to take such other action, as reasonably necessary or desirable to fully effectuate the intents and purposes of this Agreement.

 

      Section 5.3. Relationship of the Parties . This Agreement shall not be construed to place the parties in the relationship of legal representatives, partners, joint venturers or agents of or with each other. No party shall have any power to obligate or bind the other party in any manner whatsoever, except as specifically provided herein.

 

      Section 5.4. Third Party Beneficiaries . Except for the indemnification rights under this Agreement of any Indemnified Parties (as hereafter defined), the provisions of this Agreement are solely for the benefit of the parties hereto and their respective successors and permitted assigns, and are not intended to confer upon any person, except the parties hereto and their respective successors and permitted assigns, any rights or remedies hereunder.

 

      Section 5.5. Assignment and Sublicense .

 

           (a) The license shall be assignable or sublicenseable to any direct or indirect Majority Owned Subsidiary of VPG, provided that VPG shall be responsible for the compliance by any such Majority Owned Subsidiary with the terms of this Agreement. As used herein, “Majority Owned Subsidiary of VPG” means any subsidiary of VPG (x) of which both over 50% of the voting securities and over 50% of the outstanding equity interests, whether voting or non-voting, are owned by VPG or by one or more of Majority-Owned Subsidiaries of VPG or by VPG and one or more of its Majority-Owned Subsidiaries, and (y) which is engaged in the design, development, manufacture, marketing, provision and performance of VPG Products and Services as part of the business of VPG under the management and control of VPG.

 

           (b) If VPG shall sell or transfer its business of the design, development, manufacture, marketing, provision and performance of VPG Products and Services substantially as an entirety, to a single purchaser or other single transferee, whether such sale or other transfer is structured as a sale of stock, assets or otherwise, and thereafter VPG shall cease to be engaged in such business, the purchaser or other transferee shall succeed to the rights and obligations of VPG under this Agreement; provided such purchaser or other transferee shall execute documentation in form and substance reasonably satisfactory to VSH agreeing to be

 

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bound by the terms of this Agreement. For the avoidance of doubt, the following actions shall not be deemed an assignment, delegation or other transfer of VPG’s rights, benefits, powers, duties, responsibilities or obligations under this Agreement or the license granted hereby or any interest therein: (1) assignment or transfer of the stock of VPG, including by way of a merger, consolidation, or other form of reorganization in which outstanding shares of VPG are exchanged for securities, or (2) any transaction effected primarily for the purpose of (A) changing VPG’s state of incorporation or (B) reorganizing VPG into a holding company structure such that, as a result of any such transaction, VPG becomes a wholly-owned subsidiary of a holding company owned by the holders of VPG’s securities immediately prior to such transaction.

 

           (c) Except as provided in this Section, the license granted hereby shall be non-assignable and non- sublicenseable. Any purported license or assignment in violation of this Agreement shall be void.

 

           (d) This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns.

 

      Section 5.6. Press Releases; Public Announcements . Neither party shall issue any release or make any other public announcement concerning this Agreement or the transactions contemplated hereby without the prior written approval of the other party, which approval shall not be unreasonably withheld, delayed or conditioned; provided, however, that either party shall be permitted to make any release or public announcement that in the opinion of its counsel it is required to make by law or the rules of any national securities exchange of which its securities are listed; provided further that it has made efforts that are reasonable in the circumstances to obtain the prior approval of the other party.

 

      Section 5.7. Waiver of Defaults . Waiver by any party hereto of any default by the other party hereto of any provision of this Agreement shall not be construed to be a waiver by the waiving party of any subsequent or other default, nor shall it in any way affect the validity of this Agreement or prejudice the rights of the other party thereafter to enforce each and ever such provision. No failure or delay by any party hereto in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.

 

      Section 5.8. Severability . If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby, as the case may be, is not affected in any manner adverse to any party hereto or thereto. Upon such determination, the parties hereto shall negotiate in good faith in an effort to agree upon a suitable and equitable provision to effect the original intent of the parties hereto.

 

      Section 5.9. Indemnification . Each of the parties shall indemnify, defend and hold harmless the other party, each of its respective current and former directors, officers and employees, and each of their respective heirs, executors, successors and assigns (“Indemnified

 

-10-

 

Parties”), from and against any and all liabilities relating to, arising out of or resulting from any breach of, or failure to perform or comply with, any covenant, undertaking or obligation of, this Agreement by the indemnifying party. In addition, VPG shall indemnify, defend and hold harmless VSH and its other Indemnified Parties from and against any and all liabilities relating to, arising out of or resulting from the sale and/or provision of VPG Products and Services under the Licensed Marks. All indemnification procedures and payments shall be governed by Sections 5.6, 5.7 and 5.8 of the Master Separation Agreement between the parties, dated June 22, 2010 (the “Master Separation Agreement”), as applicable.

 

      Section 5.10. LIMITATION OF LIABILITY . IN NO EVENT SHALL VSH OR VPG BE LIABLE TO THE OTHER FOR ANY SPECIAL, CONSEQUENTIAL, INDIRECT, COLLATERAL, INCIDENTAL OR PUNITIVE DAMAGES OR LOST PROFITS OR FAILURE TO REALIZE EXPECTED SAVINGS OR OTHER COMMERCIAL OR ECONOMIC LOSS OF ANY KIND, ARISING OUT OF THIS AGREEMENT; PROVIDED, HOWEVER, THAT THE FOREGOING LIMITATIONS SHALL NOT LIMIT EITHER PARTY’S INDEMNIFICATION OBLIGATIONS WITH RESPECT TO THIRD PARTY CLAIMS.

 

      Section 5.11. Confidential Information . VSH and VPG shall hold and shall cause each of their respective affiliates, directors, officers, employees, agents, consultants, advisors and other representatives to hold, in strict confidence and not to disclose or release without the prior written consent of the other party, any and all proprietary or confidential information, material or data of the other party that comes into its possession in connection with the performance by the parties of their rights and obligations under this Agreement. The provisions of Section 4.6 of the Master Purchase Agreement shall govern, mutatis mutandis, the confidentiality obligations of the parties under this Section.

 

      Section 5.12. Attorneys’ Fees . In any action hereunder to enforce the provisions of this Agreement, the prevailing party shall be entitled to recover its reasonable attorneys’ fees in addition to any other recovery hereunder.

 

      Section 5.13. Governing Law . This Agreement and the legal relations between the parties shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflict of laws rules thereof to the extent such rules would require the application of the law of another jurisdiction.

 

      Section 5.14. Consent to Jurisdiction . Subject to the provisions referenced in Section 5.16, each of the parties irrevocably submits to the jurisdiction of the federal and state courts located in Philadelphia, Pennsylvania for the purposes of any suit, action or other proceeding to compel arbitration, for the enforcement of any arbitration award or for specific performance or other equitable relief pursuant to Section 5.15. Each of the parties further agrees that service of process, summons or other document by U.S. registered mail to such parties address as provided in Section 5.1 shall be effective service of process for any action, suit or other proceeding with respect to any matters for which it has submitted to jurisdiction pursuant to this Section. Each of the parties irrevocably waives any objection to venue in the federal and state courts located in Philadelphia, Pennsylvania of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby.

 

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      Section 5.15. Specific Performance . The parties hereto agree that the remedy at law for any breach of this Agreement may be inadequate, and that any party hereto shall be entitled to specific performance in addition to any other appropriate relief or remedy, if and to the extent that the remedy of specific performance is available in accordance with Section 8.2(g) of the Master Separation Agreement. Such party may, in its sole discretion, to the extent necessary to prevent serious and irreparable harm as contemplated by Section 8.2(g) of the Master Separation Agreement, apply to a court of competent jurisdiction for specific performance or injunctive or such other relief as such court may deem just and proper in order to enforce this Agreement.

 

      Section 5.16. Dispute Resolution . The procedures set forth in Article VIII of the Master Separation Agreement shall apply to the resolution of all disputes arising under this Agreement, except that all proceedings provided for therein shall be conducted in Philadelphia, Pennsylvania.

 

      Section 5.17. Entire Agreement . This Agreement and the Schedules hereto, as well as any other agreements and documents referred to herein, constitute the entire agreement between the parties with respect to the subject matter hereof and supersede all previous agreements, negotiations, discussions, understandings, writings, commitments and conversations between the parties with respect to such subject matter.

 

      Section 5.18. Waiver of Jury Trial . Subject to Section 5.16, EACH OF THE PARTIES HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY COURT PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF AND PERMITTED UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

 

      Section 5.19. Amendments . No provisions of this Agreement shall be deemed amended, modified or supplemented by any party hereto, unless such amendment, supplement or modification is in writing and signed by the authorized representative of the party against whom it is sought to enforce such amendment, supplement or modification.

 

      Section 5.20. Counterparts . This Agreement may be executed in any number of counterparts, including by facsimile or electronic signature, and each such counterpart shall be deemed an original instrument, and all of such counterparts together shall constitute but one agreement. A facsimile or electronic signature is deemed an original signature for all purposes under this Agreement.

 

[SIGNATURE PAGES FOLLOW]

 

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      IN WITNESS WHEREOF, the parties hereto have caused their duly authorized representatives to execute this Agreement as of the date first above written.

 

VISHAY INTERTECHNOLOGY, INC.
By:		/s/ Lior E. Yahalomi
Name:		Lior E. Yahalomi
Title:		Executive Vice President and Chief
		Financial Officer
VISHAY PRECISION GROUP, INC.
By:		/s/ William M. Clancy
Name:		William M. Clancy
Title:		Executive Vice President and Chief
		Financial Officer

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SCHEDULE A*

 

LICENSED MARKS

 

1. Trademarks and Trade Names

 

VISHAY (with respect to Section 1.2 only)

 

VISHAY PRECISION

 

VISHAY FOIL RESISTORS

 

2. Entity Names

 

Vishay - PM Belgium N.V.
Vishay - Waste Collection Systems Belgium N.V.
Vishay Tedea-Huntleigh (Beijing) Electronics Co., Ltd
Vishay Precision Measurement Trading (Shanghai) Co., Ltd.
Vishay Celtron Technologies (Tianjin) Co., Ltd
Vishay PME France SARL
Vishay Measurements Group France, S.A.S.
Vishay Precision Foil GmbH
Vishay Measurement Group GmbH
Vishay Transducers India Limited
Vishay Precision Transducers India Private Limited
Vishay PM Onboard (Ireland) Limited

Vishay Precision Israel Ltd.
Vishay Advanced Technologies, Ltd.
Vishay Precision Foil K.K.
Vishay Precision Holdings B.V.
Vishay - Waste Collection Systems B.V.
Vishay Revere Transducers Europe B.V.
Vishay Nobel AS
Vishay Precision Asia Investments Pte. Ltd.
Vishay Precision España S.L.
Vishay Nobel AB
Vishay Celtron Technologies, Inc.
Vishay Measurements Group UK Limited
Vishay PM Group Limited
Vishay PM Onboard Limited
Vishay Precision Group, Inc.
Vishay Measurements Group, Inc.
Vishay Transducers Ltd.

 

A-1

 

Vishay Precision Foil, Inc.
Vishay BLH, Inc.

 

* Note that this Schedule A does not include the Marks set forth on Attachment 1 to Schedule 1.3 or the entity names set forth on Schedule 2.4(a)(iii) (which are not otherwise listed on this Schedule A) to the Master Separation Agreement, inasmuch as those Marks and entity names are owned by VPG and no license from VSH is required for VPG’s use of such Marks and entity names.

 

A-2

 

SCHEDULE B

 

VPG PRODUCTS AND SERVICES

 

B-1

 

SCHEDULE C

 

NON-EXHAUSTIVE LIST OF
PERMISSIBLE USES OF PRECISION BY VSH

 

1.		“Vishay” and “precision” separated, other than by a blank, e.g.
		Vishay’s precision … Vishay – precision … Vishay: precision … … Vishay. Precision …. (end and start of sentences)
2.		Vishay Logo followed with “Precision” in text.
3.		“Vishay + brand + precision”, e.g.
		Vishay Sfernice Precision … Vishay Sfernice precision pots Vishay Sfernice precision metal film resistors Vishay Sfernice precision wire wound resistors Vishay Dale Precision …. Vishay Spectrol precision …. Vishay Spectrol precision pots Vishay BCcomponents Precision …. Vishay Spectrol Ultra Precision Hall effect Rotary position sensor Vishay Dale Precision Wire Wound Resistors
4.		“Vishay + technology + precision”, e.g.
		Vishay Film capacitors precision Vishay Thin film precision resistors (Dale TFNA, Sfernice) Vishay Thin Film Precision Networks
5.		“Precision…” at the beginning of a sentence (i.e. preceded by no word), e.g.
		Precision wire wound resistors (Dale) Precision power (Dale) Precision film (Dale) Precision Thin Film (Dale - TFNA) Precision Thin Film Technology (Dale - TFNA) Precision Low TCR Thin Film (Dale - TFNA) Precision Non Magnetic Thin Film Resistors (Dale - TFNA)   Precision Automotive Thin Film (Dale - TFNA) Precision Matched Pair resistors SOT-23 Precision Ultra Frequency Resistors (FC series in Thin Film)

 

C-1

 

		Precision MKP 416…20 (film capacitors) Precision Thin Film Chip Resistor Arrays (Draloric Beyschlag) Precision Thin Film Chip Resistors (Draloric Beyschlag) Precision Wire wound Cemented Resistors (Draloric Beyschlag) Precision film capacitors Precision 1% to 2%…KP 1830 (film capacitors) Precision Feel Rotary Potentiometers (Spectrol 21P)
6.		Other uses of word “precision” where preceded by various words, e.g.
		KP Polypropylene film / foil precision capacitors High Precision Thin Film Chip Resistor High Precision MELF Resistor High Precision MINI-MELF Resistor High Precision Thin Film Leaded Resistor High Precision Metal Film Leaded Resistor High Precision Thin Film Chip Resistor Arrays High precision …(Dale) Very High Precision Thin Film Chip Resistor Very High Precision MELF Resistor Very High Precision MINI-MELF Resistor Very High Precision Thin Film Leaded Resistor Very High Precision Metal Film Leaded Resistor Very High Precision Thin Film Chip Resistor Arrays Ultra Precision Thin Film Chip Resistor Arrays Ultra Precision Thin Film Chip Resistor Ultra Precision MELF Resistor Ultra Precision MINI-MELF Resistor Ultra Precision Thin Film Leaded Resistor Ultra-Precision Thin Film Flat Chip Resistors Ultra Precision Metal Film Leaded Resistor Ultra Precision Silicon Based RF Capacitors Cemented Wirewound Precision Resistors Semi Precision Thick Film Chip Resistors Frequency Precision Surface mount Inductors ACAC 0612 Precision Thin Film Chip Resistor Arrays ACAS 0612 AT Precision Thin Film Chip Resistor Arrays ACAS 0606 AT Precision Thin Film Chip Resistor Arrays
7.		“Precision …” in a sentence following “Vishay Intertechnology Inc.”, e.g.
		“Vishay Intertechnology Inc. Precision …”

 

C-2

 

SCHEDULE D

 

LICENSED DOMAIN NAMES

 

vishayprecision
vishayfoilresistors
vishaymeasurementsgroup
vishaymg
vishaynobel
vishaypg
vishaypgloadcells

 

D-1

 

TRANSITION SERVICES AGREEMENT

 

      This Transition Services Agreement (this “ Services Agreement ”) is entered into and effective as of the 6th day of July, 2010 (the “ Effective Date ”), by and between Vishay Intertechnology, Inc., a corporation organized under the laws of the State of Delaware (“ Provider ”), and Vishay Precision Group, Inc., a corporation organized under the laws of the State of Delaware (“ Recipient ”). Provider and Recipient each may be referred to herein as a “ Party ” and collectively, as the “ Parties .”

 

      WHEREAS, the Board of Directors of Provider has determined that it is appropriate and desirable to separate Recipient and Provider into two publicly-traded companies by separating Provider from Recipient and transferring to Recipient Provider’s measurement group and foil business (the “ MGF Business ”) (such separation, the “ Separation ”);

 

      WHEREAS, Provider and Recipient have entered into that certain Master Separation and Distribution Agreement, dated as of the 22 nd day of June, 2010 (the “ Master Separation Agreement ”), in order to carry out, effect and consummate the Separation; and

 

      WHEREAS, to facilitate the Separation, Provider and Recipient deem it to be appropriate and in the best interests of Provider and Recipient that Provider provide certain services to Recipient pursuant to the terms and conditions set forth herein.

 

      NOW, THEREFORE, in consideration of the mutual promises, covenants, agreements, representations and warranties contained herein, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Parties hereby agree as follows:

 

Article 1
Services

 

      1.1 General . In accordance with the provisions hereof, Provider, through its Subsidiaries (as defined below) and their respective employees, agents or contractors, shall provide to Recipient and its Subsidiaries, and Recipient shall purchase from Provider, the services described in Schedule A (each a “ Service ” and collectively, the “ Services ”). In addition to a description of each Service, Schedule A shall set forth, where relevant, the maximum level or amount of each Service, applicable performance times and the pricing parameters for each Service. Schedule A may be amended from time to time by written agreement of the Parties. For purposes of this Services Agreement, “ Subsidiary ” of any Party means a corporation or other organization whether incorporated or unincorporated of which at least a majority of the securities or interests having by the terms thereof ordinary voting power to elect at least a majority of the board of directors or others performing similar functions with respect to such corporation or other organization is directly or indirectly owned or controlled by such Party or by any one or more of its Subsidiaries, or by such Party and one or more of its Subsidiaries; provided , however , that no person that is not directly or indirectly wholly-owned by the Party shall be a Subsidiary of such Party unless such Party controls, or has the right, power or ability to control, that person.

 

      1.2 Quality of Services . Subject to Section 1.3 , Provider shall perform each of the Services (i) in a workmanlike and professional manner, (ii) with the same degree of care as it

 

exercises in performing its own functions of a like or similar nature, (iii) utilizing individuals of suitable experience, training and skill, and (iv) in a timely manner in accordance with the provisions of this Services Agreement.

 

      1.3 Forecasts . Recipient shall provide Provider with a monthly forecast of its requested level of Services not less than fifteen (15) days prior to the beginning of each calendar month, unless no change in the existing service levels are forecast for such calendar month. The Service levels, if any, initially requested by Recipient (the “ Initial Service Levels ”) shall be as set forth on Schedule A . Service levels may be decreased from the Initial Service Levels upon Recipient’s delivery to Provider of written notice of such decrease specified in reasonable detail at least sixty (60) days in advance of the month to which the decrease forecast relates. Any increase in the scope of Services, including the addition of any new Services, shall be negotiated in good faith by the Parties; provided that Provider shall not be required to perform additional or enhanced services, except to the extent that it has available resources and receives compensation acceptable in its reasonable discretion. To the extent any Services are mischaracterized in Schedule A , Provider and Recipient shall negotiate in good faith to amend Schedule A as appropriate.

 

      1.4 Third Party Services . Each Party acknowledges and agrees that certain of the Services to be provided under this Services Agreement may have been, and may continue to be, provided to Recipient, by third parties designated by Provider. To the extent so provided, Provider shall use commercially reasonable efforts to (i) cause such third parties to provide such Services in accordance with the provisions of this Services Agreement and/or (ii) enable Recipient and its Subsidiaries to avail itself of such Services; provided , however , that if any such third party is unable or unwilling to provide any such Services, Provider shall use its commercially reasonable efforts to determine the manner in which such Services can best be provided, and, if there is any change to the level or cost of Services provided as a result, Provider and Recipient shall negotiate in good faith to amend Schedule A as appropriate.

 

      1.5 Responsible Personnel . Each Party shall (i) from time to time designate a senior level manager who shall have overall responsibility for the administration and operation of this Services Agreement (each, a “ Party Representative ”) and (ii) upon reasonable request of the other Party, provide such other Party with a list of key management personnel who may be contacted by such other Party with respect to each Service.

 

      1.6 Consultation . At either Party’s reasonable request, the Parties shall meet and discuss the nature, quality and level of Services covered by this Services Agreement and any modifications a Party may wish to make to the Services and other matters specified in Schedule A .

 

      1.7 Recovery Procedures . Provider shall maintain, consistent with past practices applicable to the MGF Business immediately prior to the Separation, operational recovery procedures to insure the availability of systems and the integrity of data relating to the Services at all times. In the event of the unavailability of any such system or the loss or destruction of any such data, Provider shall use its commercially reasonable efforts, consistent with past practices applicable to the MGF Business immediately prior to the Separation, to restore such systems and recover or replace such data as quickly and completely as is practicable.

 

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      1.8 Monitoring and Reports; Books and Records; Audit Right .

 

      (a) Provider shall maintain books and records in reasonable and customary detail pertaining to the provision of Services pursuant to this Services Agreement. Provider shall make such books and records available for inspection by Recipient or its authorized representatives during normal business hours, upon reasonable notice to Provider, and shall retain such books and records for periods consistent with the retention policies applicable to the MGF Business immediately prior to the Separation.

 

      (b) Upon thirty (30) days’ advance notice to Provider, Recipient may audit (or cause an independent third party auditor to audit), during regular business hours and in a manner that complies with the building and security requirements of Provider, the books, records and facilities of Provider pertaining to the provision of Services pursuant to this Services Agreement to the extent necessary to determine Provider’s compliance with this Services Agreement. For any given Service, Recipient shall have the right to audit such books, records and facilities of Provider once for each twelve month period during which payment obligations are due. Any audit under this Section 1.8(b) shall not interfere unreasonably with the operations of Provider. Recipient shall pay the costs of conducting such audit, unless the results of an audit reasonably indicate an overpayment by Recipient of ten percent (10%) or more (such percentage to be determined by reference to the Services which are subject to the specific audit), in which case, Provider shall pay the reasonable out-of-pocket costs of Recipient.

 

      (c) Provider shall provide Recipient, at no cost to Recipient, with customary reports concerning the performance of the Services and as Recipient otherwise reasonably requests from time to time.

 

Article 2
Compensation; Billing

 

      2.1 Service Fees . In consideration of providing the Services, Provider will charge Recipient the monthly fees or time and materials fees indicated for each Service listed on Schedule A (each, a “ Service Fee ” and collectively, the “ Service Fees ”). In the event that for any month there shall be an increase or decrease of the level of any Service by 5% or more compared to the Initial Service Levels for any Service described on Schedule A for which there is a monthly fee, if any, the Service Fee for such Service shall be adjusted proportionately.

 

      2.2 Expenses . Provider shall also be entitled to charge Recipient for its reasonable documented, out-of-pocket costs and expenses incurred by Provider in providing the Services, as more particularly provided on Schedule A (“ Expenses ”).

 

      2.3 Invoices . Not later than 30 days after the end of each calendar month, Provider shall send Recipient an invoice that includes in reasonable detail the Service Fees and Expenses due for Services provided to Recipient for such month. Payments of invoices shall be made by wire transfer of immediately available United States funds to one or more accounts specified in writing by Provider. Payment shall be made within 30 days after the date of receipt of Provider’s invoice. All amounts payable to Provider hereunder shall be paid without setoff, deduction, abatement or counterclaim.

 

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      2.4 Payment Delay . If Recipient fails to make any payment of a material invoice within 60 days from the date such payment was due, Provider shall have the right, at its sole option, upon 10 business days’ written notice (a “ Suspension Notice ”), to suspend performance of the Services until payment has been received.

 

      2.5 Finance Charges . With respect to the unpaid amount of any invoice not paid in full within 30 days of receipt, a finance charge of 1% per month, payable from the date of the invoice to the date payment is received, shall be due and payable to Provider. In addition, Recipient shall indemnify Provider for its costs, including reasonable attorneys’ fees and disbursements, incurred to collect any unpaid amount. Recipient shall not be liable for the payment of any finance charges pursuant to this Section 2.5 , and Provider shall not be authorized to suspend performance pursuant to Section 2.4 , to the extent, but only to the extent, that Recipient in good faith is in the process of disputing the fees or expenses to which such finance charges or performance relates in accordance with Section 13.2 .

 

Article 3
Cooperation and Consents

 

      3.1 General . Each Party shall reasonably cooperate with and provide assistance to the other Party in carrying out the provisions of this Services Agreement. Such cooperation shall include, but not be limited to, exchanging information, providing electronic systems used in connection with the Services, making adjustments and obtaining all consents, licenses, sublicenses or approvals necessary to permit each party to perform its obligations hereunder.

 

      3.2 Transition . At the request of Recipient in contemplation of the termination of any Services hereunder, in whole or in part, Provider shall cooperate with Recipient, at Recipient’s expense, in transitioning such Services to Recipient or any third-party service provider designated by Recipient.

 

      3.3 Consents . Provider will obtain any third-party consents necessary to enable it to provide the Services as forth on Schedule 3.3 (the “ Consents ”), provided that Provider shall not be required to pay any consideration or incur any liability therefor. If any such consent is not obtained, the parties will reasonably cooperate with one another to achieve a reasonable alternative arrangement with respect thereto.

 

Article 4
Confidentiality

 

      4.1 Generally . In the course of the performance of the Services, each Party may become aware of confidential and proprietary information of the other Party (“ Confidential Information ”). All Confidential Information disclosed by a Party during the term of this Services Agreement shall remain the property of the disclosing Party and shall be used by the receiving Party only in accordance with the provisions of this Services Agreement.

 

      4.2 Identification; Term . (a) Except in the case of (x) information that is subject to the confidentiality provisions of Section 4.5 of the Master Separation Agreement or (y) information exchanged in furtherance of the performance of the Services hereunder that is of a type that is generally regarded by the Parties to be confidential information (such as pricing,

 

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customer and production information), to which this subsection (a) shall not apply, if disclosed in written form, Confidential Information shall be identified as Confidential Information by an appropriate legend. For a period of 5 years from the date of first receipt thereof, the receiving Party shall (i) treat all such information in the same manner as it treats its own confidential information, in any event exercising reasonable precautions to prevent the disclosure of such information to others; (ii) use such information only for the purposes set forth herein; and (iii) disclose such information only to its employees who have a need to know such information in the performance of their duties hereunder.

 

      4.3 Exceptions . The obligations of confidential treatment under this Article 4 shall not apply to any Confidential Information which (i) is or becomes publicly known through no wrongful act, fault or negligence of the receiving Party; (ii) was known by the receiving Party prior to disclosure or is developed by the receiving Party independently of such disclosure; (iii) was disclosed to the receiving Party by a third party who was not under any obligation of confidentiality; (iv) is approved for release by written authorization of the disclosing Party; or (v) is disclosed pursuant to a requirement of law or by court order, provided that the receiving Party has provided the disclosing Party with reasonable opportunity to prevent or limit such legally required disclosure.

 

      4.4 Injunctive Relief . Each Party acknowledges and agrees that it would be difficult to measure the damages that might result from any actual or threatened breach of this Article 4 and that such actual or threatened breach by it may result in immediate, irreparable and continuing injury to the other Party and that a remedy at law for any such actual or threatened breach may be inadequate. Accordingly, the Parties agree that the non-breaching Party, in its sole discretion and in addition to any other remedies it may have at law or in equity, shall be entitled to seek temporary, preliminary and permanent injunctive relief or other equitable relief, issued by a court of competent jurisdiction, in case of any such actual or threatened breach (without the necessity of actual injury being proved and with the necessity of posting bond).

 

Article 5
Intellectual Property

 

      5.1 Recipient Intellectual Property . Except as otherwise agreed by the Parties, all data, software, or other property or assets owned or created by Recipient shall remain the sole and exclusive property and responsibility of Recipient. Provider shall not acquire any rights in any such data, software or other property or assets pursuant to this Services Agreement.

 

      5.2 Provider Intellectual Property . Except as otherwise agreed by the Parties, all data, software or other property or assets which are owned by Provider, including without limitation derivative works thereof and new data or software created by Provider at Provider’s expense pursuant to the provision of Services and all intellectual property rights therein (the “ Provider Property ”), shall be the sole and exclusive property and responsibility of Provider. Recipient shall not acquire any rights in any Provider Property pursuant to this Services Agreement.

 

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Article 6
Remedies and Limitation of Liability

 

      6.1 In the event that any Service performed by Provider hereunder is not performed in accordance with the provisions of Article 1 , Recipient’s sole remedy shall be, at the election of Recipient either (i) to require Provider to re-perform such Service in accordance with Article 1 without obligation on the part of Recipient to make payment for such performance, (ii) to provide Recipient with a credit in an equivalent amount towards the future purchase of Services, as contemplated by this Services Agreement, or (iii) to require Provider to pay the cost of replacing such Services with a third-party provider, and Provider shall not be liable for any other loss or damage on account of the performance of any Service.

 

      6.2 IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY SPECIAL, CONSEQUENTIAL, INDIRECT, COLLATERAL, INCIDENTAL OR PUNITIVE DAMAGES OR LOST PROFITS OR FAILURE TO REALIZE EXPECTED SAVINGS OR OTHER COMMERCIAL OR ECONOMIC LOSS OF ANY KIND, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE) ARISING IN ANY WAY OUT OF THIS SERVICES AGREEMENT, WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF ANY SUCH DAMAGES; PROVIDED, HOWEVER, THAT THE FOREGOING LIMITATIONS SHALL NOT LIMIT EITHER PARTY’S INDEMNIFICATION OBLIGATIONS FOR LIABILITIES WITH RESPECT TO THIRD PARTY CLAIMS, AS SET FORTH IN ARTICLE 7 .

 

      6.3 In no event, whether as a result of breach of contract, indemnity, warranty, tort (including negligence), strict liability, or otherwise, shall either Party’s liability to the other Party for any loss or damage arising out of, or resulting from, this Services Agreement or the furnishing of Services hereunder, in any month exceed three times the monthly price of the specific Service which gives rise to the claim for such month.

 

Article 7
Indemnification

 

      7.1 General . Each Party shall indemnify and hold harmless the other Party from all claims, liabilities, damages and expenses payable to third parties arising out of or relating to (i) a breach of this Services Agreement, (ii) gross negligence, or willful misconduct, or (iii) infringement of third party intellectual property in the performance of any Service, in each case, by the indemnifying Party, except to the extent, but only to the extent, that any such claims, liabilities, damages or expenses are the result of a breach of this Services Agreement, gross negligence or willful misconduct, or infringement of third party intellectual property, on the part of the indemnified Party.

 

      7.2 Special Recipient Indemnity . Notwithstanding anything to the contrary herein, Recipient shall indemnify and hold Provider harmless from and against (i) any tax, penalty, interest, addition to tax, tax surcharge, or other charge payable by Provider as a result of any sales, use or excise taxes levied or based on amounts payable pursuant to this Services Agreement, including privilege or excise taxes based on gross revenues under this Services Agreement or taxes on the Services rendered to Recipient, provided that Recipient shall not be

 

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responsible for any taxes levied measured by or based upon the net income of Provider; (ii) claims, liabilities, damages and expenses arising out of or relating to (a) the content of or defects in any inventory, material or other property of the Recipient, or (b) the performance of Services for or on behalf of Recipient hereunder, but only to the extent such Services have been performed in compliance with this Services Agreement or otherwise pursuant to the specific written instructions of Recipient.

 

      7.3 Indemnification Procedures . Indemnification of Third Party Claims (as that term is defined in the Master Separation Agreement) shall be governed by the definitions and procedures set forth in Section 5.6 of the Master Separation Agreement. Indemnification for direct claims shall be governed by the procedures set forth in Section 5.7 of the Master Separation Agreement. Payment shall be made in accordance with the provision of Section 5.8 of the Master Separation Agreement. For the avoidance of doubt, the provisions of Section 5.5 of the Master Separation Agreement shall not be applicable to claims under this Article 7 .

 

Article 8
Excusable Delays

 

      Neither Party shall be held liable for any delay or failure in performance of any part of this Services Agreement by reason of any cause beyond its reasonable control, including, but not limited to, acts of God, acts of civil or military authority, government regulations, embargoes, epidemics, war, terrorist acts, riots, fires, explosions, earthquakes, nuclear accidents, floods, strikes, power blackouts affecting facilities, inability to secure products or services of other persons or transportation facilities, or acts or omissions of transportation common carriers, provided that the Party so affected shall use reasonable commercial efforts to remove such causes of non-performance. Upon the occurrence of any event of force majeure, the Party whose performance is prevented shall promptly give written notice to the other Party and the Parties shall promptly confer in good faith to agree upon reasonable action to minimize the impact of such event on the Parties.

 

Article 9
Independent Contractor

 

      9.1 Relationship . In its performance of Services hereunder, Provider is an independent contractor to Recipient and nothing in this Services Agreement shall be deemed to make a Party a partner, principal, joint venturer, or fiduciary of the other Party. Neither Provider nor any persons performing any Service on Provider’s behalf shall be deemed to be employees, agents or legal representatives of Recipient. Nothing in this Services Agreement shall confer authority upon any Party to enter into any commitment or agreement binding upon the other Party.

 

      9.2 No Assumption of Obligations . Nothing in this Services Agreement shall be construed as an assumption by Provider of any financial obligation of Recipient.

 

      9.3 Compensation of Employees . Provider shall be responsible for payment of compensation to its employees and shall be responsible for payment of all federal, state and local

 

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taxes or contributions imposed or required under unemployment insurance, social security and income tax laws with respect to such persons.

 

Article 10
Compliance With Laws

 

      In the performance of its duties and obligations under this Services Agreement, each Party shall comply with all applicable laws. The Parties shall cooperate fully in obtaining and maintaining in effect all permits and licenses that may be required for the performance of the Services.

 

Article 11
Term and Termination

 

      11.1 Term . The term of this Services Agreement shall commence on the Effective Date and end on the eighteen (18) month anniversary of the Distribution Date (as defined in the Master Separation Agreement), unless terminated earlier in whole or in part as provided in Section 11.3 .

 

      11.2 [Intentionally omitted.]

 

      11.3 Termination of this Services Agreement . This Services Agreement may be terminated:

 

      (a) By written agreement of the Parties;

 

      (b) By Provider in the event an unpaid invoice resulting in delivery to Recipient of a Suspension Notice under Section 2.4 is not satisfied within sixty (60) days of the date of delivery of such notice;

 

      (c) By either Party upon a material breach (other than non-payment of Services Fees or Expenses) by the other that is not cured within thirty (30) days after written notice of such breach from the non-breaching Party, except that where such breach is not capable of being cured within 30 days, the breaching Party shall be accorded thirty (30) additional days to cure such breach if it demonstrates that it is capable of curing such breach within such additional period;

 

      (d) Upon thirty (30) days’ advance written notice by either Party to the other where one Party: (i) commences a voluntary case or other proceeding seeking liquidation, reorganization, or similar relief or seeks the appointment of a trustee, receiver, liquidator or other similar official of it or the taking of possession by any such official in any involuntary case or other proceeding commenced against it, or makes a general assignment for the benefit of creditors, or fails generally to pay its debts as they become due; or (ii) has an involuntary case or other proceeding commenced against it seeking liquidation, reorganization or other relief with respect to it or substantially all of its debts or seeks the appointment of a trustee, receiver, liquidator, custodian or other similar official for such Party or any substantial part of its property, and such involuntary case or other proceeding remains undismissed for a period of sixty (60) days; or

 

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      (e) Except as may otherwise be set forth on Schedule A , by Recipient upon not less than thirty (30) days’ advance written notice, with respect to all or any part of any Service provided pursuant to this Services Agreement; provided that neither this Services Agreement nor any Service to performed by Provider hereunder may be terminated earlier than ninety (90) days after the Distribution Date; and provided further that to the extent there are any break-up costs (including commitments made to or in respect of personnel or third parties due to the requirement to provide the Services and prepaid expenses related to the Services, or costs related to terminating such commitments) incurred by Provider as a result of such termination, Recipient shall be solely responsible for such costs. This Section 11.3(e) shall not limit the application of Section 1.3 .

 

      11.4 Effect . In the event of termination of this Services Agreement in its entirety pursuant to this Article 11 or upon the expiration of the term (as the same may be extended pursuant to Section 11.2 ), this Services Agreement shall cease to have further force or effect and neither Party shall have any liability to the other Party with respect to this Services Agreement, provided that:

 

      (a) Termination or expiration of this Services Agreement for any reason shall not release a Party from any liability or obligation which already has accrued as of the effective date of such termination or expiration, and shall not constitute a waiver or release of, or otherwise be deemed to adversely affect, any rights, remedies or claims, which a Party may have hereunder at law, equity or otherwise or which may arise out of or in connection with such termination or expiration.

 

      (b) As promptly as practicable following termination of this Services Agreement in its entirety or with respect to any Service to the extent applicable, and the payment by Recipient of all amounts owing hereunder, Provider shall return all reasonably available material, inventory and other property of Recipient held by Provider and shall deliver copies of all of Recipient’s records maintained by Provider with regard to the Services in Provider’s standard format and media. Provider shall deliver such property and records to such location or locations as reasonably requested by Recipient. Provider shall be responsible for the packing and preparation for shipping of all such material, inventory and other property. Arrangements for shipping, including the cost of freight and insurance, and the reasonable cost of packing incurred by Provider shall be the responsibility of and shall be paid by Recipient.

 

      (c) Articles 4 , 5 , 6 , 7 , 10 , 12 , 13 and 14 and this Section 11.4 shall survive any termination or expiration of this Services Agreement and remain in full force and effect.

 

Article 12
Notices

 

      All notices, demands and other communications required to be given to a Party hereunder shall be in writing and shall be deemed to have been duly given if personally delivered, sent by a nationally recognized overnight courier, transmitted by facsimile, or mailed by registered or certified mail (postage prepaid, return receipt requested) to such Party at the relevant street address, facsimile number or e-mail address set forth below (or at such other street address,

 

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facsimile number or e-mail address as such Party may designate from time to time by written notice in accordance with this provision):

 

	If to Provider, to:
	Vishay Intertechnology, Inc.
	63 Lancaster Avenue
	Malvern, PA 19355-2120
	Attention: Dr. Lior E. Yahalomi, Chief Financial Officer
	Telephone: 610-644-1300
	Facsimile: 610-889-2161
	with a copy to:
	Kramer Levin Naftalis & Frankel LLP
	1177 Avenue of the Americas
	New York, NY 10036
	Attention: Abbe L. Dienstag, Esq.
	Telephone: 212-715-9100
	Facsimile: 212-715-8000
	If to Recipient, to:
	Vishay Precision Group, Inc.
	3 Great Valley Parkway
	Malvern, PA 19355-1307
	Attention: William M. Clancy, Chief Financial Officer
	Telephone: (484)-321-5300
	Facsimile: (484)-321-5300
	with a copy to:
	Pepper Hamilton LLP
	3000 Two Logan Square
	Eighteenth and Arch Streets
	Philadelphia, Pennsylvania 19103-2799
	Attention: Barry Abelson, Esq.
	Telephone: 215-981-4000
	Facsimile: 215-981-4750

      Any notice, demand or other communication hereunder shall be deemed given upon the first to occur of: (i) the fifth (5 th ) day after deposit thereof, postage prepaid and addressed correctly, in a receptacle under the control of the United States Postal Service; (ii) transmittal by facsimile transmission to a receiver or other device under the control of the party to whom notice is being given; or (iii) actual delivery to or receipt by the party to whom notice is being given or an employee or agent thereof.

 

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Article 13
Governing Law and Dispute Resolution

 

      13.1 Governing Law . This Services Agreement and the legal relations between the parties hereto shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflict of laws rules thereof to the extent such rules would require the application of the law of another jurisdiction.

 

      13.2 Dispute Resolution . The procedures for discussion and negotiation set forth in this Section 13.2 shall apply to all disputes, controversies or claims (whether arising in contract, tort or otherwise) (each, a “ Dispute ”) that may arise out of or relate to, or arise under or in connection with this Services Agreement or the transactions contemplated hereby.

 

      (a) It is the intent of the Parties to use their respective reasonable best efforts to resolve expeditiously any Dispute between them with respect to the matters covered hereby that may arise from time to time on a mutually acceptable negotiated basis. In furtherance of the foregoing, if a Dispute arises, the respective Party Representatives shall consider the Dispute for up to seven (7) business days following receipt of a notice from either Party specifying the nature of the Dispute, during which time the Party Representatives shall meet in person at least once, and attempt to resolve the Dispute.

 

      (b) If the Dispute is not resolved by the end of the seven (7) day period referred to in Section 13.2(a) , or if the Party Representatives agree that the Dispute can not be resolved by them, either Party may deliver a notice (an “ Escalation Notice ”) demanding an in-person meeting involving appropriate representatives of the Parties at a senior level of management of the Parties (or if the Parties agree, of the appropriate strategic business unit or division within such entity) (collectively, “ Senior Executives ”). Thereupon, each of the Party Representatives shall promptly prepare a memorandum stating (i) the issues in Dispute and each Party’s position thereon, (ii) a summary of the evidence and arguments supporting each Party’s positions (attaching all relevant documents), (iii) a summary of the negotiations that have taken place to date, and (iv) the name and title of the Senior Executive who shall represent each Party. The Party Representatives shall each deliver such memorandum to its respective Senior Executive promptly upon receipt of such memorandum from the other Party Representative. The Senior Executives shall meet for negotiations (which may be held telephonically) at a mutually agreed time and place within ten (10) days of the Escalation Notice, and thereafter as often as the Senior Executives deem reasonably necessary to resolve the Dispute.

 

      (c) In the event that the Parties, after complying with the provisions set forth in Sections 13.2(a) and 13.2(b) , are unable to resolve a Dispute that arises out of or relates to, arises under or in connection with this Services Agreement or the transactions contemplated hereby, the Parties shall resolve such Dispute in accordance with the provisions set forth in Article VIII of the Master Separation Agreement.

 

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Article 14
Miscellaneous

 

      14.1 Amendment . No provisions of this Services Agreement shall be amended, modified or supplemented by any Party, unless such amendment, supplement or modification is in writing and signed by the authorized representative of the Party against whom it is sought to enforce such amendment, supplement or modification.

 

      14.2 Waiver .

 

      (a) Any term or provision of this Services Agreement may be waived, or the time for its performance may be extended, by the Party or the Parties entitled to the benefit thereof. Any such waiver shall be validly and sufficiently given for the purposes of this Services Agreement if, as to any Party, it is in writing signed by an authorized representative of such Party.

 

      (b) Waiver by any Party of any default by the other Party of any provision of this Services Agreement shall not be construed to be a waiver by the waiving party of any subsequent or other default, nor shall it in any way affect the validity of this Services Agreement or any Party or prejudice the rights of the other Party thereafter to enforce each and ever such provision. No failure or delay by any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.

 

      14.3 Assignability . This Services Agreement shall be binding upon and inure to the benefit of the Parties, and their respective successors and permitted assigns; provided , however , that no Party may assign, delegate or transfer (by merger, operation of law or otherwise) its respective rights or delegate its respective obligations under this Services Agreement without the express prior written consent of the other Party. Notwithstanding the foregoing, either Party may assign its rights and obligations under this Services Agreement to any Wholly-owned Subsidiary; provided , however , that each Party shall at all times remain liable for the performance of its obligations under this Services Agreement by any such Wholly-owned Subsidiary. Any attempted assignment or delegation in violation of this Section 14.3 shall be void. For purposes of this Services Agreement, “ Wholly-owned Subsidiary ” of a Party means a Subsidiary of that Party substantially all of whose voting securities and outstanding equity interest are owned either directly or indirectly by such Party or one or more of its Subsidiaries or by such Party and one or more of its Subsidiaries.

 

      14.4 No Subcontracting . Unless otherwise agreed by Recipient, which agreement shall not unreasonably be withheld, and except as provided in Section 1.4 , Provider may not subcontract the performances of any Services hereunder.

 

      14.5 Third Parties . Except for the indemnification rights under this Services Agreement of any Party in their respective capacities as such: (i) the provisions of this Services Agreement are solely for the benefit of the Parties and their respective successors and permitted assigns, and are not intended to confer upon any person, except the Parties and their respective successors and permitted assigns, any rights or remedies hereunder; (ii) there are no third party beneficiaries of this Services Agreement; and (iii) this Services Agreement shall not provide any

 

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third party with any remedy, claim, liability, reimbursement, claim of action or other right in excess of those existing without reference to this Services Agreement.

 

      14.6 Severability . If any provision of this Services Agreement or the application thereof to any person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to persons or circumstances or in jurisdictions other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any Party. Upon such determination, the Parties shall negotiate in good faith in an effort to agree upon such a suitable and equitable provision to effect the original intent of the Parties.

 

      14.7 Attorneys’ Fees . In any action hereunder to enforce the provisions of this Services Agreement, the prevailing Party shall be entitled to recover its reasonable attorneys’ fees in addition to any other recovery hereunder.

 

      14.8 Counterparts . This Services Agreement may be executed in one or more counterparts, each of which when so executed and delivered or transmitted by facsimile, e-mail or other electronic means, shall be deemed to be an original and all of which taken together shall constitute but one and the same instrument. A facsimile or electronic signature is deemed an original signature for all purposes under this Services Agreement.

 

      14.9 DISCLAIMER OF REPRESENTATIONS AND WARRANTIES . EXCEPT FOR THE REPRESENTATIONS, WARRANTIES AND COVENANTS EXPRESSLY MADE IN THIS SERVICES AGREEMENT, PROVIDER HAS NOT MADE AND DOES NOT HEREBY MAKE ANY EXPRESS OR IMPLIED REPRESENTATIONS, WARRANTIES OR COVENANTS, STATUTORY OR OTHERWISE, OF ANY NATURE, INCLUDING WITH RESPECT TO THE WARRANTIES OF MERCHANTABILITY, QUALITY, QUANTITY, SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR THE RESULTS OBTAINED OF THE CONTINUING BUSINESS. ALL OTHER REPRESENTATIONS, WARRANTIES, AND COVENANTS, EXPRESS OR IMPLIED, STATUTORY, COMMON LAW OR OTHERWISE, OF ANY NATURE, INCLUDING WITH RESPECT TO THE WARRANTIES OF MERCHANTABILITY, QUALITY, QUANTITY, SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR THE RESULTS OBTAINED OF THE CONTINUING BUSINESS ARE HEREBY DISCLAIMED BY PROVIDER.

 

      14.10 Remedies . The rights and remedies provided herein shall be cumulative and not exclusive of any rights or remedies provided by law.

 

      14.11 Specific Performance . The Parties agree that the remedy at law for any breach of this Services Agreement may be inadequate, and that, as between Provider and Recipient, any Party by whom this Services Agreement is enforceable shall be entitled to specific performance in addition to any other appropriate relief or remedy. Such Party may, in its sole discretion, apply to a court of competent jurisdiction for specific performance or injunctive or such other relief as such court may deem just and proper in order to enforce this Services Agreement as between Provider and Recipient, or prevent any violation hereof, and, to the extent permitted by

 

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applicable law, as between Provider and Recipient, each Party waives any objection to the imposition of such relief.

 

      14.12 Consent to Jurisdiction . Subject to the provisions of Section 13.2 , each of the Parties irrevocably submits to the jurisdiction of the federal and state courts located in Philadelphia, Pennsylvania and the City of New York, Borough of Manhattan for the purposes of any suit, action or other proceeding to compel arbitration, for the enforcement of any arbitration award or for specific performance or other equitable relief pursuant to Section 14.11 Each of the Parties further agrees that service of process, summons or other document by U.S. registered mail to such parties address as provided in Article 12 shall be effective service of process for any action, suit or other proceeding with respect to any matters for which it has submitted to jurisdiction pursuant to this Section 14.12 . Each of the Parties irrevocably waives any objection to venue in the federal and state courts located in Philadelphia, Pennsylvania and the City of New York, Borough of Manhattan of any action, suit or proceeding arising out of this Services Agreement or the transactions contemplated hereby for which it has submitted to jurisdiction pursuant to this Section 14.12 , and waives any claim that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

 

      14.13 Waiver of jury trial . Subject to Section 13.2 and Section 14.11, each of the Parties hereby waives to the fullest extent permitted by applicable law any right it may have to a trial by jury with respect to any court proceeding directly or indirectly arising out of and permitted under or in connection with this agreement or the transactions contemplated by this agreement. Each of the Parties hereby (a) certifies that no representative, agent or attorney of any other Party has represented, expressly or otherwise, that such other Party would not, in the event of litigation, seek to enforce the foregoing waiver and (b) acknowledges that it has been induced to enter into this agreement and the transactions contemplated by this agreement, as applicable, by, among other things, the mutual waivers and certifications in this Section 14.13.

 

      14.14 Nonrecurring Costs and Expenses . Notwithstanding anything herein to the contrary, any nonrecurring costs and expenses incurred by the Parties to effect the transactions contemplated hereby which are not allocated pursuant to the terms of this Agreement shall be the responsibility of the Party which incurs such costs and expenses.

 

      14.15 Press Releases; Public Announcements . Neither Party shall issue any release or make any other public announcement concerning this Agreement or the transactions contemplated hereby without the prior written approval of the other Party, which approval shall not be unreasonably withheld, delayed or conditioned; provided , however , that either Party shall be permitted to make any release or public announcement that in the opinion of its counsel it is required to make by law or the rules of any national securities exchange of which its securities are listed; provided further that it has made efforts that are reasonable in the circumstances to obtain the prior approval of the other Party.

 

      14.16 Construction . Any uncertainty or ambiguity with respect to any provision of this Agreement shall not be construed for or against any party based on attribution of drafting by either party. The headings contained herein are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. In this Agreement, unless a clear contrary intention appears:

 

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      (a) the singular number includes the plural number and vice versa;

 

      (b) reference to any Person includes such Person’s successors and assigns but, if applicable, only if such successors and assigns are not prohibited by this Agreement, and reference to a Person in a particular capacity excludes such Person in any other capacity or individually;

 

      (c) reference to any gender includes each other gender;

 

      (d) reference to any agreement, document or instrument means such agreement, document or instrument as amended, modified, supplemented or restated, and in effect from time to time in accordance with the terms thereof subject to compliance with the requirements set forth herein;

 

      (e) reference to any applicable law means such applicable law as amended, modified, codified, replaced or reenacted, in whole or in part, and in effect from time to time, including rules and regulations promulgated thereunder, and reference to any section or other provision of any applicable law means that provision of such applicable law from time to time in effect and constituting the substantive amendment, modification, codification, replacement or reenactment of such section or other provision;

 

      (f) “herein,” “hereby,” “hereunder,” “hereof,” “hereto” and words of similar import shall be deemed references to this Agreement as a whole and not to any particular article, section or other provision hereof;

 

      (g) “including” (and with correlative meaning “include”) means including without limiting the generality of any description preceding such term;

 

      (h) the Table of Contents and headings are for convenience of reference only and shall not affect the construction or interpretation hereof or thereof;

 

      (i) with respect to the determination of any period of time, “from” means “from and including” and “to” means “to but excluding;” and

 

      (j) references to documents, instruments or agreements shall be deemed to refer as well to all addenda, exhibits, schedules or amendments thereto.

 

      14.17 Entire Agreement . This Services Agreement and the Schedules hereto, as well as any other agreements and documents referred to herein, constitute the entire agreement between the Parties with respect to the subject matter hereof and supersede all previous agreements, negotiations, discussions, understandings, writings, commitments and conversations between the Parties with respect to such subject matter. No agreements or understandings exist between the Parties other than those set forth or referred to herein.

 

{Signatures appear on the following page}

 

15

 

      IN WITNESS WHEREOF, the Parties hereto have caused this Amended and Restated Transition Services Agreement to be executed by their duly authorized officers or representatives as of the date first written above.

 

VISHAY INTERTECHNOLOGY, INC.
By: /s/ Dr. Lior E. Yahalomi
Name:	Dr. Lior E. Yahalomi
Title:	Executive Vice President and Chief Financial Officer

VISHAY PRECISION GROUP, INC.
By: /s/ William M. Clancy
Name:	William M. Clancy
Title:	Executive Vice President and Chief Financial Officer

SCHEDULE A
TO
TRANSITION SERVICES AGREEMENT

 

This Schedule A is comprised of Schedule A-1, Schedule A-2 and Schedule A-3. The Services to be provided by Provider under Schedule A-1 are referred to generally as the Corporate Website Services, the EDI Services and the Partners Services. The Services to be provided by Provider under Schedule A-2 are referred to generally as the SAP Services. The Services to be provided by Provider under Schedule A-3 are referred to generally as the Finance Support Services. In accordance with the Services Agreement, the Services to be provided hereunder will be provided by Provider through its Subsidiaries and their respective employees, agents or contractors. Capitalized terms used but not defined herein have the meaning given to them in that certain Transition Services Agreement, dated the 6 th day of July, 2010, by and between Vishay Intertechnology, Inc., as Provider, and Vishay Precision Group, Inc., as Recipient (the “Services Agreement”).

 

For the avoidance of doubt, any migration services, whether based on a change of provider, a change of application or otherwise, are considered additional services, the terms of which shall be negotiated in good faith by Provider and Recipient; provided that Provider shall not be required to perform such migration services, except to the extent that it has available resources and receives compensation acceptable in its reasonable discretion.

 

Vishay Precision Group, Inc., as Recipient may terminate any Service under this Schedule A by giving Vishay Intertechnology, Inc., as Provider, at least (30) days’ advance written notice. The parties do not anticipate total payments under the Transition Services Agreement and this Schedule A to exceed $300,000 in the first twelve months or $500,000 in the aggregate.

 

Schedule A-1

IT SUPPORT SERVICES FOR CORPORATE WEBSITE, EDI AND PARTNERS

I.		Terms and IT services provided by Vishay Global Web Services
		1.		Transition Services for Corporate Website
				a.		The subject “Corporate Website” comprises the relevant web applications and components of the Provider’s website which are applicable to the business units transferred to Recipient.
				b.		Provider will only provide support for website components and applications developed by Provider IT.
				c.		Provider will not be responsible to support any modification/enhancement performed by or on behalf of Recipient any time after execution of the Services Agreement.
				d.		Provider will provide Corporate Website support services (“Corporate Website Services”) for a period, not to exceed 18 months, starting on the Distribution Date, subject to extension on the terms set forth in the Services Agreement. Upon expiration or termination of the Services Agreement, all support for the website and related programs will be the sole responsibility of Recipient.
				e.		The Corporate Website Services cover 80 man-hours per month of maintenance support to include non-core modifications and software bug corrections, constituting the Initial Service Level with respect to the Corporate Website Services. Provider IT will allocate proper programmer resources for the website components turned over to Recipient. Unused hours from the previous month will not be carried over to the succeeding month. In the event the Initial Service Level (i.e. the budgeted 80 man-hours) is exceeded, Recipient will be charged on a time and material basis at the Standard Support Rate set forth in Section III.4 of this Schedule A-1.
				f.		All of Provider’s website custom programs and applications are proprietary to Provider and are provided to Recipient for Recipient’s use only. Recipient will not copy these programs and will not provide any copy to any third party, unless it is needed to support Recipient’s operation as it and approved in advance in writing by Provider.

 

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	2.		Transition Services for EDI Services
			a.		The subject “EDI Services” comprises the electronic data interchange services for FOILS sales operation on Recipient’s SAP system hosted in Malvern.
			b.		The EDI Services will include operational support, setup of new customers on EDI, and setup of new EDI message types.
			c.		The EDI Services will not include, and Provider will not be responsible to support, any modification or enhancement performed by or on behalf of Recipient any time after execution of the Services Agreement.
			d.		Provider will provide EDI Services for a period not to exceed 18 months, starting on the Distribution Date, subject to extension on the terms set forth in the Services Agreement. Upon expiration or termination of the Services Agreement, all support for the EDI infrastructure and related programs will be the sole responsibility of Recipient.
			e.		The EDI Services cover 40 man-hours per month of maintenance support to include non-core modifications and software bug corrections, constituting the Initial Service Level with respect to the EDI Services. Provider IT will allocate proper programmer resources. Unused hours from the previous month will not be carried over to the succeeding month. In the event the Initial Service Level (i.e. the budgeted 40 man-hours) is exceeded, Recipient will be charged on a time and material basis at the Standard Support Rate set forth in Section III.4 of this Schedule A-1.
	3.		Transition Services for Partners Services
			a.		The subject “Partners” comprises the web SAP-based Internet Transaction Services for FOILS sales operation on the Recipient’s SAP system hosted in Malvern. “Internet Transaction Services” means SAP’s method of extending business applications to a web browser.
			b.		Provider will provide operational support for the seven transactions currently available in Partners (the “Partners Services”). Addition of new transactions other that the seven currently available in Partners is not covered in this Schedule A.
			c.		The Partners Services will not include, and Provider will not be responsible to support, any modification or enhancement performed by or on behalf of Recipient any time after execution of the Services Agreement. In addition, the

 

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					Partners Services will not include the setup, migration, or preparation for any similar Partners implementation other than the interface with Recipient’s SAP system.
			d.		Provider will provide Partners Services for a period not to exceed 18 months, starting on the Distribution Date, subject to extension on the terms set forth in the Services Agreement. Upon expiration or termination of the Services Agreement, all support for the Partners infrastructure and related programs will be the sole responsibility of Recipient.
			e.		The Partners Services cover 40 man-hours per month of maintenance support to include non-core modifications and software bug corrections, constituting the Initial Service Level with respect to the Partners Services. Provider IT will allocate proper programmer resources. Unused hours from the previous month will not be carried over to the succeeding month. In the event the Initial Service Level (i.e. the budgeted 40 man-hours) is exceeded, Recipient will be charged on a time-and-material basis at the Standard Support Rate set forth in Section III.4 of this Schedule A-1.
II.		Recipient’s Responsibilities
			a.		Recipient Marcom will be responsible for concept and content of the Recipient’s website.
			b.		Recipient, at its sole cost and expense, shall be responsible for the registration and subsequent renewal of its website and Partners domain.
			c.		Recipient agrees to adopt a key user support community concept, where all issues are first escalated to the assigned Recipient key user for verification and resolution.
			d.		Recipient at its sole cost and expense, shall be responsible for all operating expenses associated with the operation of all the systems, including but not limited to, hardware maintenance, software maintenance, communication lines, VAN services and usage charges for EDI mailbox , annual license fees where applicable, system supplies etc. This includes the operating expenses during the system setup and testing period after execution of the Services Agreement.
			e.		Recipient, at its sole cost and expense, shall be responsible for providing necessary secured network access, whether on-site or remote access, to allow Provider to perform the services set forth herein.

 

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III.		Services Fees and Costs
		1.		Corporate Website Services
				USD 4,000 per month for the Corporate Website Services plus any out of pocket expenses for licenses, equipment, hardware, IT infrastructure additions to support additional hardware at Recipient, transportation of hardware to Recipient sites, and travel-related costs (if required for Provider personnel to travel) if not already paid for directly by Recipient.
		2.		EDI Services
				USD 3,200 per month for EDI Services plus any out of pocket expenses for licenses, equipment, hardware, IT infrastructure additions to support additional hardware at Recipient, transportation of hardware to Recipient sites, and travel-related costs (if required for Provider personnel to travel) if not already paid for directly by Recipient.
		3.		Partners Services
				USD 3,200 per month for Partners Services plus any out of pocket expenses for licenses, equipment, hardware, IT infrastructure additions to support additional hardware at Recipient, transportation of hardware to Recipient sites, and travel-related costs (if required for Provider personnel to travel) if not already paid for directly by Recipient.
		4.		Hourly Support Rates
				Standard Website Support Rate – USD 50/hour
				Standard EDI/Partners Support Rate – USD 80/hour
				The Standard Website Support Rate applies to hours exceeding the Initial Service Level for Corporate Website Services as outlined in III.1.
				The Standard EDI/Partners Support Rate applies to hours exceeding the Initial Service Level for EDI Services and Partners Services as outlined in III.2 and III.3 of this Schedule A-1, respectively.

 

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Schedule A-2

IT SUPPORT SERVICES FOR SAP SYSTEMS AND APPLICATIONS

I.		Terms and IT services provided by Vishay Global Business Applications Services
		1.		Transition Services for FOILS Sales operation on SAP
				a.		Provider will provide operating and application maintenance support, including non-core modifications and bug fixes for FOILS sales operation on SAP system/client co-hosted on the platform (all such support, the “SAP Services”). Operational functions within the SAP Services include:
							i.		Order Management (three selling companies),
							ii.		Shipping (three selling companies),
							iii.		Invoicing (three selling companies),
							iv.		Finished Goods Inventory Management (one manufacturing company),
							v.		Accounts Receivable (three selling companies),
							vi.		General Ledger (three selling companies), and
							vii.		Warehousing,
						as implemented as of the Distribution Date.
				b.		The SAP Services will be provided during 8 work-hours on 5 work-days EST for routine work. Emergencies will be attended 24 hours per day, 7 days a week, on a reasonable best efforts basis.
				c.		The SAP Services cover 160 man-hours per month starting from the Distribution Date. Provider IT will allocate the respective qualified resources for the services, constituting the Initial Service Level with respect to the SAP Services. Unused hours from the previous month will not be carried over to the succeeding month. In the event the Initial Service Level (i.e. the budgeted 160 man-hours) is exceeded, Recipient will be charged on a time and material basis at the Standard Support Rate set forth in Section III.2 of this Schedule A-2.
				d.		Any additional out of pocket costs incurred by providing the SAP Services will be charged to Recipient. Any costs expected to be above 1000 USD will be sent to Recipient for approval before. Provider assumes no responsibility for service failures due to delayed approvals or rejections.
				e.		Provider will provide the SAP Services for a period, not to exceed 18 months, starting from the Distribution Date, subject to extension on the terms set forth in the

 

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						Services Agreement. Upon expiration or termination of the Services Agreement, Provider will stop all SAP services.
				f.		Provider will hand over all business data to Recipient in electronic data files within no later than one week after expiration or termination of the Service Agreement. Recipient shall specify to Provider in writing the business data to be archived within 90 days prior to expiration or termination of the Services Agreement, whichever comes first. In the event Recipient does not so specify the business data to be archived within such 90-day period, Recipient may alternatively receive upon request a complete database copy of the applications listed in Section I.1.g of this Schedule A-2.
				g.		The application hosting will include a productive and a test environment on non-mirrored IBM servers (ERP instances) and HP servers (warehouse instances) in Vishay corporate datacenter. Backup will be done daily. Service level parameters are:
							i.		Annual Uptime: 98%
							ii.		Recovery Time Objective (RTO): 5 work days
							iii.		Recovery Point Objective (RPO): 24 hours
II.		Recipient’s Responsibilities
				a.		Provider will be able to use its own licenses to operate the SAP systems for FOILS. Recipient will pay the respective license depreciation and maintenance costs on a per user basis. Any additional costs that should be incurred by such a solution will also be charged to Recipient.
				b.		Recipient will pay any costs for additional third party software that is used for the FOILS interim system. This may include, but is not limited to, the WSW Speedi consignment package.
				c.		Recipient will provide the specification of the business data to be archived to Provider three months before expiration or termination of the Services Agreement. The specification has to list the required business objects and record formats.
III.		Services Fees and Costs
		1.		SAP Services
				a.		USD 8,000.00 per month for the SAP Services outlined in Section I.1.a.-b of this Schedule A-2.

 

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			b.		USD 7,400.00 per month for the SAP Services outlined in Section I.1.g of this Schedule A-2.
			c.		Any time and material and out of pocket expenses as outlined in Section I.1.c.-f of this Schedule A-2.
			d.		USD 47.00 per month for each active user in FOILS interim system on the first day of such month. Any third party licensing and maintenance costs as outlined in II.a.-b
	2.		Hourly Support Rates
			a.		Standard Support Rate: USD 50/hour
					For purposes of this Schedule A-2, the Standard Support Rate applies to hours exceeding the Initial Service Level for the SAP Services
			b.		Development support rate USD 80/hour
					The development support rate applies to any development not covered by Section Section I.1.a of this Schedule A-2. This includes but is not limited to any major application change requests, the migration support to another system within the Provider during the term of the Services Agreement, and the archiving of the business data created in the FOILS interim system.

 

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Schedule A-3

FINANCE SUPPORT SERVICES

I.		Terms and Finance Support Services to be Provided
		1.		Finance Support Services
				a.		This Schedule A-3 refers to the provision of finance and accounting support from Provider to support the closing of SAP Foil for the VPG four selling entities located in US, Germany, Israel and Japan (the “Selling Entities”). Provider personnel will sit with the Recipient personnel and assist Recipient in closing the books for the new companies and in recording all accounts and transactions in SAP and otherwise will provide additional financial and accounting support services as may be reasonably requested by the Selling Entities (the “Finance Support Services”).
				b.		Provider will provide Finance Support Services to the Recipient until the books of the Selling Entities have been closed for the second quarter ending after the Distribution Date.
II.		Services Fees and Costs :
		Provider will provide the Finance Support Services at an average of $50 per hour per person, $250 per person for each half-day (i.e. each 4-hour increment) and $500 per person for each full day (i.e. each 8-hour increment), in each case, based upon such person receiving $100,000 in annual compensation, working 200 calendar days per year, or as the parties may otherwise agree. Recipient will reimburse Provider for reasonable business travel expenses incurred by Provider and its personnel in connection with the provision of the Finance Support Services.

 

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Portions of this exhibit were omitted and filed separately with the Secretary of the Securities and Exchange Commission pursuant to an application for confidential treatment filed with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934. Such portions are marked by [***].

 

 

 

SUPPLY AGREEMENT

 

by and between

 

Vishay Advanced Technology, Ltd.,
an Israeli company,

 

as Supplier

 

and

 

Vishay Dale Electronics, Inc.,
a Delaware corporation,

 

as Buyer

 

 

Dated as of July 6, 2010

 

      This SUPPLY AGREEMENT (this “ Agreement ”) is made as of July 6, 2010 by and between Vishay Advanced Technology, Ltd., an Israeli company (“ Supplier ”), and Vishay Dale Electronics, Inc., a Delaware corporation (“ Buyer ”). Supplier and Buyer each may be referred to herein as a “ Party ” and collectively, as the “ Parties ”.

 

      WHEREAS, subject to the terms, conditions, commitments and undertakings herein provided, Supplier is willing to manufacture and sell those products as set forth on Exhibit A hereto (as the same may be modified from time to time pursuant to the provisions hereof, the “ Products ”) to Buyer, and Buyer desires to purchase the Products from Supplier, in such quantities as Buyer shall request , as provided in this Agreement;

 

      NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows:

 

ARTICLE I
DEFINITIONS

 

      For purposes of this Agreement, the following terms shall have the meanings specified in this Article I:

 

      “ Affiliate ” means, as applied to any Person, any other Person that, directly or indirectly, controls, is controlled by, or is under common control with that Person as of the date on which or at any time during the period for when such determination is being made. For purposes of this definition, “ control ” means 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 other interests, by contract or otherwise, and the terms “ controlling ” and “ controlled ” have meanings correlative to the foregoing.

 

      “ Applicable Law ” means any applicable law, statute, rule or regulation of any Governmental Authority, or any outstanding order, judgment, injunction, ruling or decree by any Governmental Authority.

 

      “ Buyer ” has the meaning set forth in the preamble of this Agreement.

 

      “ Firm Order ” means Buyer’s non-cancelable purchase order for Products to be purchased by Buyer from Supplier pursuant to this Agreement for delivery.

 

      “ FOB ” has the meaning and usage assigned to such words in the incoterms rules published by the International Chamber of Commerce.

 

      “ Forecast ” means, with respect to any relevant period, a good faith non-binding forecast, based on information available to Buyer at the time of such forecast (which information, if reduced to writing, shall be made available to Supplier upon reasonable request), of the Firm Order for each Product that Buyer expects to deliver to Supplier for each calendar month during such period.

 

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      “ Governmental Authority ” means any U.S. or non-U.S. federal, state, local, foreign or international court, arbitration or mediation tribunal, government, department, commission, board, bureau, agency, official or other regulatory, administrative or governmental authority.

 

      “ Group ” means, with respect to any Person, each Subsidiary of such Person and each other Person that is controlled directly or indirectly by such Person.

 

      “ Intellectual Property ” means all domestic and foreign patents and patent applications, together with any continuations, continuations-in-part or divisional applications thereof, and all patents issuing thereon (including reissues, renewals and re-examinations of the foregoing); design patents; invention disclosures; mask works; all domestic and foreign copyrights, whether or not registered, together with all copyright applications and registrations therefor; all domain names, together with any registrations therefor and any goodwill relating thereto; all domestic and foreign trademarks, service marks, trade names, and trade dress, in each case together with any applications and registrations therefor and all goodwill relating thereto; all Trade Secrets, commercial and technical information, know-how, proprietary or Confidential Information, including engineering, production and other designs, notebooks, processes, drawings, specifications, formulae, and technology; computer and electronic data processing programs and software (object and source code), data bases and documentation thereof; all inventions (whether or not patented); all utility models; all registered designs, certificates of invention and all other intellectual property under the laws of any country throughout the world.

 

      “ Last-Time Buy Order ” has the meaning set forth in Section 4.5 .

 

      “ Liability ” means, with respect to any Person, any and all losses, claims, charges, debts, demands, Actions, causes of action, suits, damages, obligations, payments, costs and expenses, sums of money, accounts, reckonings, bonds, specialties, indemnities and similar obligations, exoneration covenants, obligations under contracts, guarantees, make whole agreements and similar obligations, and other liabilities and requirements, including all contractual obligations, whether absolute or contingent, matured or unmatured, liquidated or unliquidated, accrued or unaccrued, known or unknown, joint or several, whenever arising, and including those arising under any Applicable Law, action, threatened or contemplated action (including the costs and expenses of demands, assessments, judgments, settlements and compromises relating thereto and attorneys’ fees and any and all costs and expenses, whatsoever reasonably incurred in investigating, preparing or defending against any such actions or threatened or contemplated actions) or order of any Governmental Authority or any award of any arbitrator or mediator of any kind, and those arising under any contract, in each case, whether or not recorded or reflected or otherwise disclosed or required to be recorded or reflected or otherwise disclosed, on the books and records or financial statements of any Person, including any Liability for taxes.

 

      “ Person ” (whether or not initially capitalized) means any corporation, limited liability company, partnership, firm, joint venture, entity, natural person, trust, estate, unincorporated organization, association, enterprise, government or political subdivision thereof, or Governmental Authority.

 

      “ Product ” has the meaning set forth in the preamble of this Agreement.

 

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      “ Product Warranty ” has the meaning set forth in Section 6.1(a) .

 

      “ Raw Materials Cost ” means the direct cost of material used in a finished Product, including the normal quantity of material wasted in the production process, purchasing costs, inbound freight charges and any applicable subcontractor charges.

 

      “ Six-Month Forecast ” means a forward-looking Forecast for a period of six consecutive calendar months, beginning on July 1 and January 1 of each calendar year, or, if earlier with respect to any Product, the last day of the Term for such Product.

 

      “ Subsidiary ” of any Person means a corporation or other organization whether incorporated or unincorporated of which at least a majority of the securities or interests having by the terms thereof ordinary voting power to elect at least a majority of the board of directors or others performing similar functions with respect to such corporation or other organization is directly or indirectly owned or controlled by such Person or by any one or more of its Subsidiaries, or by such Person and one or more of its Subsidiaries; provided , however , that no Person that is not directly or indirectly wholly-owned by any other Person shall be a Subsidiary of such other Person unless such other Person controls, or has the right, power or ability to control, that Person.

 

      “ Supplier ” has the meaning set forth in the preamble of this Agreement.

 

      “ Supplier’s Other Manufacturing Obligations ” means the manufacturing obligations and commitments of Supplier to Persons other than Buyer, including Supplier’s Affiliates.

 

      “ Specifications ” means, with respect to any Product, the design, composition, dimensions, other physical characteristics, chemical characteristics, packaging, unit count and trade dress of such Product.

 

      “ Term ” has the meaning set forth in Section 7.1 .

 

      “ Trade Secrets ” means information, including a formula, program, device, method, technique, process or other Confidential Information that derives independent economic value, actual or potential, from not being generally known to the public or to other Persons who can obtain economic value from its disclosure or use and is the subject of efforts that are reasonable, under the circumstances, to maintain its secrecy.

 

      “ Wholly-Owned Subsidiary ” of a Person means a Subsidiary of that Person substantially all of whose voting securities and outstanding equity interest are owned either directly or indirectly by such Person or one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries.

 

      The terms “ herein ”, “ hereof ”, “ hereunder ” and like terms, unless otherwise specified, shall be deemed to refer to this Agreement in its entirety and shall not be limited to any particular section or provision hereof. The term “ including ” as used herein shall be deemed to mean “including, but not limited to.” The term “ days ” shall refer to calendar days unless specified otherwise. References herein to “ Articles ”, “ Sections ” and “ Exhibits ” shall be deemed to mean Articles, Sections of and Exhibits to this Agreement unless otherwise specified.

 

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ARTICLE II
PURCHASE AND SALE OF PRODUCTS

 

      SECTION 2.1 Agreement to Purchase and Sell Products . (a) During the Term, Supplier hereby agrees to manufacture and sell to Buyer, and Buyer hereby agrees to purchase and accept from Supplier, such amounts of Products, as from time to time shall be ordered by Buyer.

 

      (b) All Products to be sold to Buyer pursuant to this Agreement shall be manufactured by Supplier or an Affiliate of Supplier; provided , however , that Supplier may subcontract the manufacture of any Product to a manufacturer that is not an Affiliate of Supplier with Buyer’s prior written consent, which consent shall not be unreasonably withheld, provided that any such subcontracting shall not relieve Supplier of its obligations hereunder.

 

      SECTION 2.2 Product Specifications . (a) Supplier shall manufacture all Products according to the Specifications in effect as of the date of this Agreement, with such changes or additions to the Specifications of the Products related thereto as shall be requested by Buyer in accordance with this Section or as otherwise agreed in writing by the Parties. All other Products shall be manufactured with such Specifications as the Parties shall agree in writing.

 

      (b) Buyer may request changed or additional Specifications for any Product by delivering written notice thereof to Supplier not less than one hundred twenty (120) days in advance of the first Firm Order for such Product to be supplied with such changed or additional Specifications. Notwithstanding the foregoing, if additional advance time would reasonably be required in order to implement the manufacturing processes for production of a Product with any changed or additional Specifications, and to commence manufacture and delivery thereof, Supplier shall so notify Buyer, and Supplier shall not be required to commence delivery of such Product until the passage of such additional time.

 

      (c) Supplier shall be required to accommodate any change of, or additions to, the Specifications for any Product, if and only if (i) in Supplier’s good faith judgment, such changed or additional Specifications would not require Supplier to violate good manufacturing practice, (ii) the representation and warranty of Buyer deemed made pursuant to Subsection (e) below is true and correct, and (iii) Buyer agrees to reimburse Supplier for the incremental costs and expenses incurred by Supplier in accommodating the changed or additional Specifications, including the costs of acquiring any new machinery and tooling. For the avoidance of doubt, such costs and expenses shall be payable by Buyer separately from the cost of Products at such time or times as Supplier shall request.

 

      (d) Supplier shall notify Buyer in writing within thirty (30) days of its receipt of any request for changed or additional Specifications (i) whether Supplier will honor such changed or additional Specifications, (ii) if Supplier declines to honor such changed or additional Specifications, the basis therefor and (iii) if applicable, the estimated costs and expenses that Buyer will be required to reimburse Supplier in respect of the requested changes or additions, as provided in Subsection (c) above. Buyer shall notify Supplier in writing within fifteen (15) days after receiving notice of any required reimbursement whether Buyer agrees to assume such reimbursement obligation.

 

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      (e) By its request for any changed or additional Specifications for any Product, Buyer shall be deemed to represent and warrant to Supplier that the manufacture and sale of the Product incorporating Buyer’s changed or additional Specifications, as a result of such incorporation, will not and could not reasonably be expected to (i) violate or conflict with any contract, agreement, arrangement or understanding to which Buyer and/or any of its Affiliates is a party, including this Agreement and any other contract, agreement, arrangement or understanding with Supplier and/or its Affiliates, (ii) infringe on any trademark, service mark, copyright, patent, trade secret or other intellectual property rights of any Person, or (iii) violate any Applicable Law. Buyer shall indemnify and hold Supplier and its Affiliates harmless (including with respect to reasonable attorneys’ fees and disbursements) from any breach of this representation and warranty.

 

      SECTION 2.3 New Products . If Buyer shall request in writing that Supplier manufacture and sell to Buyer an item that is not at the time a Product, Supplier shall consider such request in good faith, giving due consideration to Supplier’s available manufacturing capacity, Supplier’s Other Manufacturing Obligations, existing know-how, technical feasibility, cost, profitability and other relevant factors. Supplier shall inform Buyer within a reasonable time of Supplier’s determination in principle whether to manufacture such Product, and if Supplier has determined not to manufacture such Product, the reasons therefor. If Supplier shall inform Buyer that it is willing in principle to manufacture and sell such Product, Buyer and Supplier shall negotiate in good faith with respect to the terms of such manufacture and sale, including pricing and the Exhibits to this Agreement shall be modified accordingly; provided , however , that neither Party shall be bound with respect to the manufacture and sale of any such Product unless the Parties shall have so agreed in writing.

 

      SECTION 2.4 Supplier’s Supply Obligations . Supplier shall be obligated to manufacture and sell Products to Buyer, in accordance with Buyer’s Firm Orders, to the extent of Supplier’s then existing manufacturing capacity, taking into account Supplier’s Other Manufacturing Obligations; provided , however , the Supplier shall give equal priority to the orders of Buyer, on the one hand, and Supplier’s Other Manufacturing Obligations, on the other.

 

      SECTION 2.5 Product Changes . Supplier shall communicate any change in the Specifications for any Product or its manufacture in accordance with Supplier’s product change notification process. Buyer shall be deemed to have accepted such change unless, within thirty (30) days after receipt of notice from Supplier, Buyer informs Supplier that such change is not acceptable. If Buyer informs Supplier that such change is not acceptable, Supplier may by notice to Buyer either (x) continue to supply the Product in accordance with the original Specifications and manufacturing procedures or (y) terminate this Agreement with respect to such Product on a date specified by Supplier in a notice of termination, which date shall not be earlier than one (1) year from the date of Buyer’s information that it does not accept the change proposed by Supplier; subject to the right of the Buyer to submit a Last-Time Buy Order in accordance with Section 4.5 .

 

      SECTION 2.6 Product Discontinuation . At any time Supplier may notify Buyer that Supplier is discontinuing the manufacture and sale of a Product. Such discontinuation shall take effect on a date specified by Supplier in a notice of discontinuation, which date shall not be

 

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earlier than one (1) year from the date of the notice of discontinuation; subject to the right of the Buyer to submit a Last-Time Buy Order in accordance with Section 4.5 .

 

      SECTION 2.7 Consultation and Support . At either Party’s reasonable request, the Parties shall meet and discuss the nature, quality and level of supply services contemplated by this Agreement. In addition, Supplier will make available on a commercially reasonable basis and at commercially reasonable times qualified personnel to provide knowledgeable support service with respect to the Products. The Parties shall negotiate in good faith with respect to any fees and other charges incurred by Supplier in providing other than routine product support.

 

ARTICLE III
FORECASTS

 

      SECTION 3.1 Forecasts . (a) As soon as possible, but in no event later than thirty (30) days following the distribution of shares of common stock of Vishay Precision Group, Inc. (“VPG”) to the shareholders of Vishay Intertechnology, Inc. (“Vishay Intertechnology”) under that certain Master Separation and Distribution Agreement between Vishay Intertechnology and VPG (the “Master Separation Agreement”), Buyer shall provide to Supplier an initial Forecast for the period ending on December 31, 2010. Beginning on December 1, 2010, and thereafter, on May 31 and December 1 of each calendar year, Buyer shall provide to Supplier a Six-Month Forecast for the 6-month period beginning on the immediately following July 1 and January 1, respectively.

 

      (b) If it is commercially impracticable for Buyer to deliver a Six-Month Forecast for a particular Product, Buyer shall deliver Forecasts to Supplier at such intervals and for such periods as reasonable under the circumstances, and Supplier shall in good faith consider such Forecasts delivered by Buyer.

 

      (c) Supplier shall use all Forecasts delivered by Buyer under this Agreement for capacity and raw material planning purposes only, and such Forecasts will not constitute a commitment of any type by Buyer to purchase any Product.

 

      SECTION 3.2 Forecasts in Excess of Capacity . Upon receipt of each Forecast, Supplier shall determine whether it will have the capacity to manufacture and sell to Buyer the Products in the forecasted amounts. If Supplier determines that it will not have the capacity to manufacture and deliver any Product to Buyer as forecasted, Supplier shall so notify Buyer as promptly as practicable. Supplier and Buyer shall thereafter negotiate in good faith in order to match Supplier’s manufacturing capacity with Buyer’s requirements for the specified Product, such as by advancing or deferring the delivery of the Product to other periods. In the event that Supplier and Buyer shall agree to accommodate Buyer’s forecasted requirements in a manner that will require the expenditure by Supplier of unbudgeted costs and expenses in addition to the costs and expenses that Supplier would otherwise be required to expend in order to fulfill its obligations under this Agreement, Buyer shall be obligated to reimburse Supplier for such costs and expenses as have actually been expended by Supplier, notwithstanding that the manufacture and sale of Products in accordance with the Firm Orders subsequently delivered by Buyer for the relevant periods do not require such expenditure.

 

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      SECTION 3.3 Firm Orders in Excess of Forecasts . In the event that the Firm Order for any Product shall exceed the Forecast contained in the most recent prior Forecast for such Product (as such Forecast may have been modified by agreement of the Parties in the manner contemplated in Section 3.2 ; such excess being referred to as the “ Excess Order ”), Supplier shall notify Buyer, as promptly as reasonably practicable after receipt of such Firm Order, whether Supplier has sufficient available capacity to accommodate the Excess Order, taking into consideration Supplier’s manufacturing capacity for such Product and Supplier’s Other Manufacturing Obligations. If Supplier shall not have sufficient available capacity to accommodate the Excess Order, Supplier and Buyer shall negotiate in good faith in order to match Supplier’s available manufacturing capacity with Buyer’s requirements for the specified Product, such as by advancing or deferring the delivery of the Product to other periods.

 

ARTICLE IV
ORDERS AND PAYMENT

 

      SECTION 4.1 Purchase Orders . (a) Buyer may place a Firm Order for the Products with Supplier at any time and from time to time.

 

      (b) Each Firm Order shall specify (i) number of units of the Product to be purchased and (ii) the requested delivery date, provided that Buyer shall request a delivery date with a lead delivery time that is customary for the particular Product, unless otherwise agreed upon by the Parties. Supplier agrees to provide Buyer prompt notice if it knows it cannot meet a requested delivery date.

 

      (c) If Buyer requires a Product on an emergency basis and so informs Supplier, and Supplier has the Product available in its uncommitted inventory, Supplier agrees to use reasonable commercial efforts to fill the emergency order as promptly as practicable. Buyer agrees to pay reasonable incremental expenses related to any emergency order.

 

      SECTION 4.2 Shipment .

 

      (a) Products will be shipped by Supplier to Buyer FOB shipping point.

 

      (b) Supplier shall package all Products so as to protect them from loss or damage during shipment, in conformity with good commercial practice, the Specifications and Applicable Law. Buyer shall be responsible, at its own cost and expense, for the shipment (including, among other fees, costs and expenses, transit and casualty insurance and third party fees) of all processed materials by Buyer. Supplier shall cooperate with Buyer in assembling and coordinating shipments, as reasonably requested by Buyer.

 

      (c) For the avoidance of doubt, title to and risk of loss or damage will pass to Buyer upon Buyer’s pick up for transfer of the Products ordered.

 

      SECTION 4.3 Prices . Pricing for the Products shall be as set forth on Exhibit A , as such Exhibit may be modified from time to time by agreement of the Parties. At least thirty (30) days prior to the beginning of each calendar year, the parties shall negotiate in good faith changes to the pricing of the Products to be applicable in the ensuing year. Such pricing shall take into account changes in the cost of manufacturing the Products, including labor, manufacturing,

 

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utility and other direct costs, and other ascertainable market inputs. If the Parties cannot in good faith agree on pricing for the Products, until such time as the Parties do so agree, Supplier shall have no obligation to honor any Firm Orders submitted by Buyer to the extent that such Firm Orders are placed following expiration of the then current calendar year.

 

      SECTION 4.4 Payment Terms . Unless otherwise agreed to by the Parties in writing, Buyer shall make payment separately for each Firm Order. Buyer shall pay the net amount of all invoice amounts within sixty (60) days of the date of Supplier’s invoice unless the terms of Supplier’s invoice permits later payment or allows for prepayment with a discount. Invoices shall not be sent earlier than the date on which the Products related thereto are delivered to Buyer.

 

      SECTION 4.5 Last-Time Buy Order .

 

      (a) Buyer shall have a right to place a written last-time Firm Order for a Product (a “ Last-Time Buy Order ”) if (i) Supplier delivers to Buyer notice of its intention not to renew the Term pursuant to Section 7.2 ; (ii) Supplier terminates this Agreement in respect of such Product in connection with Buyer’s choice not to accept a change in such Product under Section 2.5 ; (iii) Supplier delivers to Buyer a notice of discontinuation of such Product; or (iv) Buyer terminates this Agreement in connection with a material breach by Supplier pursuant to Section 7.3 . The right of the Buyer to submit a Last-Time Buy Order shall entitle Buyer to purchase the Products at the price in effect for the products as of the time of Buyer’s exercise of such right.

 

      (b) A Last-Time Buy Order shall specify (i) number of units of the Product to be purchased and (ii) the requested delivery date or dates for such units. If Supplier informs Buyer that it cannot honor the requested delivery dates because of capacity restraints or otherwise, the Parties shall negotiate in good faith with respect to delivery dates mutually acceptable to Supplier and Buyer.

 

      (c) The Parties hereby agree to use commercially reasonable efforts to coordinate forecasting and ordering during the period between the date the Last-Time Buy Order is delivered to Supplier and the final delivery date to allow for regular supply of Products during such period.

 

ARTICLE V
CONFIDENTIALITY

 

      SECTION 5.1 Supplier and Buyer shall hold and shall cause each of their respective affiliates, directors, officers, employees, agents, consultants, advisors and other representatives to hold, in strict confidence and not to disclose or release without the prior written consent of the other party, any and all proprietary or confidential information, material or data of the other party that comes into its possession in connection with the performance by the parties of their rights and obligations under this Agreement. The provisions of Section 4.5 of the Master Separation Agreement shall govern, mutatis mutandis , the confidentiality obligations of the parties under this Section.

 

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ARTICLE VI
PRODUCT WARRANTY; LIMITATION OF LIABILITY

 

      SECTION 6.1 Product Warranty; Merchantability Warranty . (a) Supplier warrants to Buyer that the Products shall, at the time of delivery to Buyer in accordance with Section 4.2 : (i) conform to the Specifications therefor, as provided in Section 2.2 ; (ii) be free from material defects; and (iii) be manufactured in accordance with good manufacturing practice and Applicable Law (such warranty being referred to as the “ Product Warranty ”).

 

      (b) EXCEPT AS SPECIFICALLY PROVIDED IN THIS AGREEMENT, NO WARRANTIES, OTHER THAN THE PRODUCT WARRANTY, ARE EXPRESSED OR IMPLIED IN RESPECT OF THE PRODUCTS, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

 

      SECTION 6.2 Defective or Non-Conforming Products . (a) Claims by Buyer relating to the quantity of or damage to any Product or the failure of any Product to conform to its Specifications must be made within one (1) year of receipt of such Product and must be in writing, specifying in reasonable detail the nature and basis of the claim and citing relevant control or lot numbers or other information to enable identification of the Product in question. Supplier’s Liability to Buyer for damages for any such claim shall be limited to a refund for the price of the defective Product plus shipping costs or, at Buyer’s option, prompt replacement thereof with a Product that complies with the Product Warranty. Such refund and shipping costs or a replacement shall constitute Supplier’s sole and exclusive Liability for such claims. For the avoidance of doubt, nothing shall limit the obligations of Supplier to Buyer in respect of third party claims against Buyer arising from the failure of any Product to conform to its Specifications.

 

      (b) Any notifications to either Party pursuant to this Section 6.2 shall be subject to the confidentiality provisions of Article V above.

 

      SECTION 6.3 Indemnification . (a) Subject to Section 6.4 , Supplier shall indemnify and hold Buyer harmless from and against any Liability, including reasonable attorney’s fees and disbursements, arising out of any third party claim for death, injury or damage to property resulting from (i) Supplier’s breach of this Agreement; or (ii) any claim that a Product purchased from Supplier infringes any intellectual property right of a third party.

 

      (b) Buyer shall indemnify and hold harmless Supplier from and against any Liability, including reasonable attorneys’ fees and disbursements, arising out of any third party claim for death, injury or damage to property resulting from use of any of the Products based upon (i) Buyer’s breach of this Agreement; or (ii) any change in condition of the Products caused by Buyer other than any change in Specifications requested by Supplier and deemed accepted by Buyer under Section 2.5 .

 

      (c) Any Party seeking indemnification pursuant to this Section 6.3 shall promptly notify the other Party of the claim as to which indemnification is sought, shall afford the other Party, at the other Party’s sole expense, the opportunity to defend or settle the claim (in which case the indemnifying Party shall not be responsible for the attorneys’ fees of the indemnified

 

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Party with respect such claim) and shall cooperate to the extent reasonably requested by the other Party in the investigation and defense of such claim; provided , however , that any settlement of any such claim that would adversely affect the rights of the indemnified Party shall require the written approval of such indemnified Party; and provided further that an indemnified Party shall not settle any such claim without the written approval of the indemnifying Party.

 

      (d) The foregoing indemnification obligations shall survive any termination or expiration of this Agreement, in whole or in part, or the expiration or termination of the Term.

 

      SECTION 6.4 Limitation of Liability . In no event shall any Party be liable for any special, consequential, indirect, collateral, incidental or punitive damages or lost profits or failure to realize expected savings or other commercial or economic loss of any kind, arising out of any breach of this Agreement, including breach of the Product Warranty, or any other obligations of any Party hereunder, or any use of the Products, and each Party hereby knowingly and expressly waives any claims or rights with respect thereto; provided , however , that in the event a Party is required to pay to a third-party claimant any special, consequential, indirect, collateral, incidental or punitive damages or lost profits or failure to realize expected savings or other commercial or economic loss on any claim with respect to which such Party is indemnified by the other Party pursuant to this Agreement, such Party shall be entitled to indemnification from the other Party with respect to such third-party special, consequential, indirect, collateral, incidental or punitive damages or lost profits or failure to realize expected savings or other commercial or economic loss to the extent resulting from the indemnifiable acts or omissions of the other Party.

 

      SECTION 6.5 Insurance . Each of the Parties shall maintain general liability insurance covering their activities under this Agreement in accordance with prudent and customary commercial practices, in such amounts as shall be agreed upon from time to time by the Parties.

 

ARTICLE VII
TERM OF AGREEMENT; RENEWAL TERM; TERMINATION

 

      SECTION 7.1 Term of Agreement . Unless earlier terminated pursuant to Section 7.3 , the term of this Agreement shall be perpetual.

 

      SECTION 7.2 Termination . Either Party may terminate this Agreement at any time upon prior written notice to the other at least one (1) year prior to the requested date of termination.

 

      SECTION 7.3 Rights Upon Termination . Following a termination of this Agreement, all further rights and obligations of the Parties under this Agreement shall terminate. Notwithstanding the foregoing, the termination of this Agreement shall not affect the rights and obligations of the Parties arising prior to such expiration or termination; and provided further that the Parties shall not be relieved of (i) their respective obligations to pay monies due or which become due as of or subsequent to the date of expiration or termination, and (ii) any other respective obligations under this Agreement which specifically survive or are to be performed after the date of such expiration or termination, including the provisions of Article V and 6.3 . Any Firm Order, including a Last-Time Buy Order, submitted prior to the expiration or

 

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termination of this Agreement shall be filled by Supplier pursuant to the terms hereof even if the delivery date is after expiration or termination.

 

ARTICLE VIII
DISPUTE RESOLUTION

 

      SECTION 8.1 The terms and provisions of Article VIII of the Master Separation Agreement relating to the procedures for resolution of any disputes between the parties, shall apply to all disputes, controversies or claims (whether sounding in contract, tort or otherwise) that may arise out of or relate to or arise under or in connection with this Agreement, or the transactions contemplated hereby, mutatis mutandis.

 

ARTICLE IX
MISCELLANEOUS

 

      SECTION 9.1 Assignment . This Agreement and the rights and obligations of a Party hereunder shall be assignable or delegable, in whole or in part, (i) by Supplier without the consent of Buyer, to a Wholly-Owned Subsidiary of Supplier that succeeds to the conduct of the foil resistor business responsible for supplying the Products; (ii) by Buyer without the consent of Supplier, to a Wholly-Owned Subsidiary of Buyer; or (iii) by either Party, to any Person who is not a Wholly-Owned Subsidiary of a Party only with the prior written consent of the other Party; provided , however , that no such assignment shall relieve the assigning Party of Liability for its obligations hereunder. The following actions shall not be deemed an assignment of this Agreement: (1) assignment or transfer of the stock of a Party, including by way of a merger, consolidation, or other form of reorganization in which outstanding shares of a Party are exchanged for securities, or (2) any transaction effected primarily for the purpose of (A) changing a Party’s state of incorporation or (B) reorganizing a Party into a holding company structure such that, as a result of any such transaction, such Party becomes a Wholly-Owned Subsidiary of a holding company owned by the holders of such Party’s securities immediately prior to such transaction. Any attempted assignment other than as provided herein shall be void. The provisions of this Agreement shall be binding upon, and shall inure to the benefit of, the successors and permitted assigns of the Parties.

 

      SECTION 9.2 Force Majeure . The Parties shall not be liable for the failure or delay in performing any obligation under this Agreement (except pursuant to Section 7.4 ) if and to the extent such failure or delay is due to (i) acts of God; (ii) weather, fire or explosion; (iii) war, invasion, riot or other civil unrest; (iv) governmental laws, orders, restrictions, actions, embargoes or blockages; (v) action by any regulatory authority which prohibits the manufacture, sale or distribution of the Products, except to the extent due to Supplier’s breach of its obligations hereunder; (vi) regional, national or foreign emergency; (vii) injunction, strikes, lockouts, labor trouble or other industrial disturbances; (viii) shortage of adequate fuel, power, materials, or transportation facilities; or (ix) any other event which is beyond the reasonable control of the affected Party; provided , however , that the Party affected shall promptly notify the other Party of the force majeure condition and shall exert its reasonable commercial efforts to eliminate, cure or overcome any such causes and to resume performance of its obligations as soon as possible.

 

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      SECTION 9.3 Intellectual Property . All Intellectual Property owned or created by a Party shall remain its sole and exclusive property, and the other Party shall not acquire any rights therein by reason of this Agreement.

 

      SECTION 9.4 Entire Agreement . This Agreement and the Exhibits hereto constitute the entire agreement between the Parties with respect to the subject matter hereof and thereof and supersede all previous agreements, negotiations, discussions, understandings, writings, commitments and conversations between the parties with respect to such subject matter. No agreements or understandings exist between the parties other than those set forth or referred to herein or therein. If any provision of this Agreement or the application thereof to any Party or circumstance shall be declared void, illegal or unenforceable, the remainder of this Agreement shall be valid and enforceable to the extent permitted by Applicable Law. In such event, the Parties shall use their best efforts to replace the invalid or unenforceable provision with a provision that, to the extent permitted by Applicable Law, achieves the purposes intended under the invalid or unenforceable provision.

 

      SECTION 9.5 Governing Law . This Agreement and the legal relations between the parties shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflict of laws rules thereof to the extent such rules would require the application of the law of another jurisdiction.

 

      SECTION 9.6 Consent to Jurisdiction . Subject to the provisions of Article VIII , each of the Parties irrevocably submits to the jurisdiction of the federal and state courts located in Philadelphia, Pennsylvania and the City of New York, Borough of Manhattan for the purposes of any suit, action or other proceeding to compel arbitration, for the enforcement of any arbitration award or for specific performance or other equitable relief pursuant to Section 9.16 . Each of the parties further agrees that service of process, summons or other document by U.S. registered mail to such parties address as provided in Section 9.10 shall be effective service of process for any action, suit or other proceeding with respect to any matters for which it has submitted to jurisdiction pursuant to this Section 9.6 . Each of the parties irrevocably waives any objection to venue in the federal and state courts located in Philadelphia, Pennsylvania and the City of New York, Borough of Manhattan of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby for which it has submitted to jurisdiction pursuant to this Section 9.6 , and waives any claim that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

 

      SECTION 9.7 Independent Contractor . Nothing contained in this Agreement shall constitute a Party as a partner, employee or agent of the other Party, nor shall any Party hold itself out as such. Neither Party shall have the right or authority to incur, assume or create, in writing or otherwise, any warranty, Liability or other obligation of any kind, express or implied, in the name or on behalf of the other Party, and each Party is and shall remain an independent contractor, responsible for its own actions. Except as otherwise explicitly provided herein, each Party shall be responsible for its own expenses incidental to its performance of this Agreement.

 

      SECTION 9.8 Set-Off . The obligation of Buyer to pay the purchase price for Products shall be unconditional, except as provided in this Agreement, and shall not be subject to any defense, setoff, counterclaim or similar right against Supplier or any of its Affiliates that could

 

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be asserted by Buyer or any of its Affiliates under any other contract, agreement, arrangement or understanding or otherwise under Applicable Law.

 

      SECTION 9.9 Waivers . No claim or right arising out of or relating to a breach of any provision of this Agreement can be discharged in whole or in part by a waiver or renunciation of the claim or right unless the waiver or renunciation is supported by consideration and is in writing signed by the aggrieved Party. Any failure by any Party to enforce at any time any provision under this Agreement shall not be considered a waiver of that Party’s right thereafter to enforce each and every provision of this Agreement.

 

      SECTION 9.10 Notices . All notices, demands and other communications required to be given to a Party hereunder shall be in writing and shall be deemed to have been duly given if personally delivered, sent by a nationally recognized overnight courier, transmitted by facsimile, or mailed by registered or certified mail (postage prepaid, return receipt requested) to such Party at the relevant street address or facsimile number set forth below (or at such other street address or facsimile number as such Party may designate from time to time by written notice in accordance with this provision):

 

If to Supplier, to:   Vishay Advanced Technology, Ltd. c/o Vishay Precision Group, Inc. 3 Great Valley Parkway Malvern, PA 19355-1307 Attention: William M. Clancy Telephone: 484-321-5300 Facsimile: 484-321-5300   with a copy to:   Pepper Hamilton LLP 3000 Two Logan Square Eighteenth and Arch Streets Philadelphia, Pennsylvania 19103-2799 Attention: Barry Abelson, Esq. Telephone: 215-981-4000 Facsimile: 215-981-4750   If to Buyer, to:   Vishay Dale Electronics, Inc. c/o Vishay Intertechnology, Inc. 63 Lancaster Avenue Malvern, PA 19355-2120 Attention: Dr. Lior E. Yahalomi Telephone: 610-644-1300 Facsimile: 610-889-2161

 

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with a copy to:   Kramer Levin Naftalis & Frankel LLP 1177 Avenue of the Americas New York, NY 10036 Attention: Ernest S. Wechsler, Esq. Telephone: 212-715-9100 Facsimile: 212-715-8000

 

Any notice, demand or other communication hereunder shall be deemed given upon the first to occur of: (i) the fifth (5 th ) day after deposit thereof, postage prepaid and addressed correctly, in a receptacle under the control of the United States Postal Service; (ii) transmittal by facsimile transmission to a receiver or other device under the control of the party to whom notice is being given; (iii) actual delivery to or receipt by the party to whom notice is being given or an employee or agent thereof; or (iv) one (1) day after delivery to an overnight carrier.

 

      SECTION 9.11 Headings . The headings contained herein are included for convenience of reference only and do not constitute a part of this Agreement.

 

      SECTION 9.12 Counterparts . This Agreement may be executed in one or more counterparts, each of which when so executed and delivered or transmitted by facsimile, e-mail or other electronic means, shall be deemed to be an original and all of which taken together shall constitute but one and the same instrument. A facsimile or electronic signature is deemed an original signature for all purposes under this Agreement.

 

      SECTION 9.13 Severability . If any provision of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to Persons or circumstances or in jurisdictions other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any party. Upon such determination, the Parties shall negotiate in good faith in an effort to agree upon such a suitable and equitable provision to effect the original intent of the Parties.

 

      SECTION 9.14 Waiver of Default . (a) Any term or provision of this Agreement may be waived, or the time for its performance may be extended, by the party or the parties entitled to the benefit thereof. Any such waiver shall be validly and sufficiently given for the purposes of this Agreement if, as to any party, it is in writing signed by an authorized representative of such party.

 

      (b) Waiver by any party of any default by the other party of any provision of this Agreement shall not be construed to be a waiver by the waiving party of any subsequent or other default, nor shall it in any way affect the validity of this Agreement or any party hereof or prejudice the rights of the other party thereafter to enforce each and ever such provision. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate

 

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as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.

 

      SECTION 9.15 Amendments . No provisions of this Agreement shall be deemed amended, modified or supplemented by any Party, unless such amendment, supplement or modification is in writing and signed by the authorized representative of the Party against whom it is sought to enforce such amendment, supplement or modification.

 

      SECTION 9.16 Specific Performance . The Parties agree that the remedy at law for any breach of this Agreement may be inadequate, and that, as between Supplier and Buyer, any Party by whom this Agreement is enforceable shall be entitled to seek temporary, preliminary or permanent injunctive or other equitable relief with respect to the specific enforcement or performance of this Agreement. Such Party may, in its sole discretion, apply to a court of competent jurisdiction for such injunctive or other equitable relief as such court may deem just and proper in order to enforce this Agreement as between Supplier and Buyer, or the members of their respective Groups, or prevent any violation hereof, and, to the extent permitted by Applicable Law, as between Supplier and Buyer, each Party waives any objection to the imposition of such relief.

 

      SECTION 9.17 Waiver of jury trial . Subject to Article VIII, each of the Parties hereby waives to the fullest extent permitted by Applicable Law any right it may have to a trial by jury with respect to any court proceeding directly or indirectly arising out of and permitted under or in connection with this Agreement or the transactions contemplated hereby. Each of the Parties hereby (a) certifies that no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver and (b) acknowledges that it has been induced to enter into this agreement and the transactions contemplated by this agreement, as applicable, by, among other things, the mutual waivers and certifications in this Section 9.17 .

 

[SIGNATURE PAGE FOLLOWS]

 

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      IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their respective duly authorized representatives as of the date first written above.

 

	SUPPLIER:
	By:	/s/ Lior E. Yahalomi
		Name:	Lior E. Yahalomi
		Title:	Executive Vice President and Chief Financial Officer
	BUYER:
	By:	/s/ Ziv Shoshani
		Name:	Ziv Shoshani
		Title:	Authorized Signatory

 

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Portions of this exhibit were omitted and filed separately with the Secretary of the Securities and Exchange Commission pursuant to an application for confidential treatment filed with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934. Such portions are marked by [***].

 

SECONDMENT AGREEMENT

 

           THIS SECONDMENT AGREEMENT (the “Agreement”) is made on July 6, 2010 by and between Vishay Intertechnology, Inc., a Delaware corporation (“ VSH ”), and Vishay Precision Group, Inc., a Delaware corporation (“ VPG ”).

 

           WHEREAS, VSH has agreed that it will supply to VPG assistance by seconding two of its employees, Dr. Felix Zandman and Reuben Katraro (together, the “ Secondees ”) to VPG in accordance with the terms and conditions of this Agreement.

 

           NOW IT IS HEREBY AGREED AS FOLLOWS:

 

      1. Secondment . VSH shall second the Secondees to VPG for the time periods described in Section 4, in accordance with the terms and conditions of this Agreement (the “ Secondment ”).

 

      2. Commitment to VPG . Subject to the provisions of Section 6 , VSH shall be required to make each Secondee available to VPG for the performances of the Services described in Section 3 for up to five percent (5%) of such Secondee’s professional working time on a monthly basis ; provided that in no event shall a Secondee be required to commit more than five (5) hours to the Services for VPG in the course of any given week.

 

      3. Services . Each Secondee will provide VPG with consulting services in research and development and technology (the “ Services ”) pursuant to the terms of this Agreement. Other than the Services, VSH shall not be required to make the Secondees available for the performance of any services to VPG.

 

      4. Term . The term of this Agreement shall commence on the date of this Agreement and shall continue thereafter until first anniversary , 2011 (the “ Initial Term ”), and shall thereafter automatically renew for additional one year periods (each, a “ Renewal Term ”, and the Initial Term or any such Renewal Term, the “ Term ”), unless sooner terminated in accordance with Section 11 of this Agreement or written notice is given by one party to the other at least 90 days prior to the expiration of the Initial Term or any Renewal Term, as applicable.

 

      5. Scheduling . Subject to the provisions of this Agreement, the Secondees shall perform the Services when and as requested by the Chief Executive Officer of VPG. The Chief Executive Officer of VPG shall consult with the Chief Executive Officer of VSH in good faith in order to schedule the time and place of the Services of each of the Secondees to VPG so as not to unreasonably interfere with the performance of the duties and responsibilities of the Secondee to VSH or impose hardship on the Secondees.

 

      6. Status . The Secondees shall at all times be and remain employees of the VSH, and nothing in this Agreement shall affect the employment relationship between VSH and each of the Secondees. While a Secondee is performing services for VPG, he shall hold himself out as a consultant to VPG, and he shall not, and VPG shall not permit him to, hold himself out as an employee of VSH.

 

      7. Obligations of VSH . VSH shall perform all obligations and discharge all liabilities which may be imposed on it by law or otherwise in its capacity as employer of the Secondees, including, without limitation, paying salary and providing employee benefits.

 

      8. Consideration .

 

           (a) In consideration for VSH seconding the Secondees to VPG, during the Term VPG shall pay to VSH in respect of each Secondee the amount per annum set forth on Exhibit A (the “ Secondment Fee ”). The Secondment Fee shall be payable in equal monthly installments on or before the first day of each calendar month during the Term (or if such day is not a business day, the next succeeding business day).

 

           (b) VPG shall also be responsible for the payment of any and all reasonable out-of-pocket business expenses incurred by either of VSH or such Secondee in connection with the performance of the Services by the Secondees, including, but not limited to, expenses for business travel and accommodation, in connection with a Secondee’s services as contemplated by this Agreement. In its discretion, VSH may reimburse a Secondee for such business expenses, in which case VSH shall be entitled to invoice VPG for amounts incurred by such Secondee. Payment by VPG shall be due within thirty (30) days of the date of invoice, unless otherwise agreed between VPG and the VSH.

 

           (c) All payments by VPG under this Agreement shall be made without set-off or counterclaim or condition, and otherwise in accordance with this Agreement.

 

      9. Liability and Indemnity .

 

           (a) VSH shall have no liability for any loss or damage (whether direct or indirect, physical, economic, consequential or otherwise) arising from or in connection with the provision of the Services to VPG by the Secondees. VPG agrees and acknowledges that it shall bear full and sole responsibility for supervising the Secondees’ performance of the Services during the course of the Secondment.

 

           (b) VPG agrees to indemnify and hold VSH fully and effectively harmless in respect of all and any liabilities which VSH may incur to any third party for claims, losses, liabilities or damages or loss of profit, savings, goodwill, business trade or any other economic loss arising in connection with the provision of any Services to VPG by the Secondees.

 

      10. Confidentiality and Intellectual Property Rights .

 

           (a) VSH shall cause each Secondee to enter into agreements as to confidentiality and as to compliance with policies corresponding to those normally obtained by VPG from its employees and consultants.

 

           (b) VSH and VPG each agrees to take all reasonable measures to protect the confidential information and intellectual property of the other that may, directly or indirectly, be disclosed in connection with the Secondment. Neither party will improperly use or disclose any confidential information or intellectual property of the other, without the other party’s consent,

 

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and each party agrees to promptly notify the other of its possession of any confidential information or intellectual property of the other.

 

           (c) If at any time during the Term either Secondee alone or jointly discovers or acquires any invention, development, improvement, process or design whatsoever or any interests therein which shall relate to or concern the activities of VPG, VSH shall cause each Secondee to be obligated to communicate full details thereof to VPG, and any such invention made or discovered as aforesaid shall belong to and be the absolute property of VPG; provided that no such invention, development, improvement, process or design shall incorporate the proprietary know-how or other intellectual property of VSH without the consent of VSH and, to the extent incorporating such know-how or intellectual property, shall not be the property of VPG unless otherwise agreed by VSH.

 

      11. Termination .

 

           (a) VPG may terminate this Agreement at any time and for any reason upon thirty (30) days advance written notice to VSH.

 

           (b) Either party may terminate this Agreement upon the occurrence of any of the following events, upon written notice to the other party:

 

      (i) with respect to one or both Secondees, in the event that either party commits a breach of this Agreement which in the case of a breach capable of remedy is not remedied within thirty (30) days after written notice has been given to the breaching party;

 

      (ii) with respect to one or both Secondees, if the other party is unable to pay its debts or upon the institution by or against such party of insolvency, receivership or bankruptcy proceedings or any other proceedings for the settlement of such party’s debts, upon such party making an assignment for the benefit of creditors, or upon such party’s dissolution or ceasing to do business; or

 

      (iii) with respect to either Secondee, if such Secondee is unable to properly perform the Services contemplated to be performed by such Secondee due to such Secondee’s death, disability, injury or any other reason, if such inability continues for a period of thirty (30) consecutive working days.

 

           (c) This Agreement shall terminate automatically, without notice to either party, with respect to either Secondee, if such Secondee’s employment with VSH is terminated for any reason. In the event such employment with VSH is terminated, VSH shall provide prompt notice of same to VPG.

 

           (d) Termination of this Agreement for any reason shall not affect the rights and obligations of the parties hereunder that have accrued up to the date of or arising out of such termination or expiry, including the right to claim damages as a result of a breach of this Agreement, or any obligations to pay any outstanding payments due to third parties after the termination date.

 

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           (e) The following provisions shall survive termination of this Agreement: Section 10 (“Confidentiality and Intellectual Property Rights”); and Section 12 (“Miscellaneous”).

 

      12. Miscellaneous .

 

           (a) Notice . Any notice to be served on either of the parties by the other shall be sent by certified first class mail to the business address of the party to whom it is sent, attention Chief Executive Officer of the applicable party.

 

           (b) No Third Party Beneficiaries; Assignability . The provisions of this Agreement are solely for the benefit of the parties hereto and their respective successors and permitted assigns, and are not intended to confer upon any other person, including the Secondees, any third party beneficiary rights under this Agreement. Neither party may assign, delegate or transfer (by merger, operation of law or otherwise) its respective rights or delegate its respective obligations under this Agreement without the express prior written consent of the other party. Notwithstanding the foregoing, either party will have the right to assign this Agreement to any direct or indirect wholly-owned subsidiary of such party subject to such party remaining liable for the fulfillment of its obligations under this Agreement.

 

           (c) Relationship of the Parties . Nothing in this Agreement shall be deemed or construed by the parties, or by any third party, to create the relationship of a partnership, joint venture or similar relationship between the parties hereto, and neither party shall be deemed to be the agent of the other party by virtue of this Agreement, it being understood and agreed that no provision contained herein shall be deemed to create any relationship between the parties hereto other than the relationship of independent parties contracting for services. Neither party has and neither party shall hold itself out as having any authority to enter into any contract or create any obligation or liability on behalf of, in the name of, or binding upon the other party or to transact business in the other party’s name or on its behalf, or make any promises or representations on behalf of the other party by virtue of this Agreement.

 

           (d) Governing Law . This Agreement is governed by and shall be construed in accordance with the laws of the State of New York, without regard to the conflict of laws rules thereof to the extent such rules would require the application of the law of another jurisdiction.

 

           (e) Dispute Resolution . The terms and provisions of Article VIII of the Master Separation and Distribution Agreement dated as of the 22 nd day of June, 2010 between VSH and VPG, relating to the procedures for resolution of any disputes between the parties, shall apply to all disputes, controversies or claims (whether sounding in contract, tort or otherwise) that may arise out of or relate to or arise under or in connection with this Agreement, or the transactions contemplated hereby, mutatis mutandis ; provided that the parties agree that the remedy at law for any breach of this Agreement may be inadequate, and that, as between VSH and VPG, any party by whom this Agreement is enforceable shall be entitled to seek temporary, preliminary or permanent injunctive or other equitable relief with respect to the specific enforcement or performance of this Agreement. Such party may, in its sole discretion, apply to a court of competent jurisdiction for such injunctive or other equitable relief as such court may

 

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deem just and proper in order to enforce this Agreement, or prevent any violation hereof, and, to the extent permitted by applicable law, each party waives any objection to the imposition of such relief.

 

           (f) Consent to Jurisdiction . The parties to this Agreement submit to the exclusive jurisdiction of the federal and state courts located in Philadelphia, Pennsylvania and the City of New York, Borough of Manhattan for the purposes of any suit, action or other proceeding to compel arbitration, for the enforcement of any arbitration award or for specific performance or other equitable relief pursuant to Section 11(e) . Each of the parties irrevocably waives any objection to venue in the federal and state courts located in Philadelphia, Pennsylvania and the City of New York, Borough of Manhattan of any action, suit or proceeding arising out of this Agreement, or the transactions contemplated hereby for which it has submitted to jurisdiction pursuant to this Section 11.6 and waives any claim that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

 

           (g) Waiver of jury trial . Subject to Section 11(e) , each of the parties hereby waives to the fullest extent permitted by applicable law any right it may have to a trial by jury with respect to any court proceeding directly or indirectly arising out of and permitted under or in connection with this agreement or the transactions contemplated by this agreement. Each of the parties hereby (i) certifies that no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver and (ii) acknowledges that it has been induced to enter into this agreement and the transactions contemplated by this Agreement, as applicable, by, among other things, the mutual waivers and certifications in this Section 11(g) .

 

           (h) Amendment . No provisions of this Agreement shall be deemed amended, modified or supplemented by any party, unless such amendment, supplement or modification is in writing and signed by the authorized representative of the party against whom it is sought to enforce such amendment, supplement or modification.

 

           (i) Severability . If any provision of this Agreement or the application thereof to any person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to persons or circumstances or in jurisdictions other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any party. Upon such determination, the parties shall negotiate in good faith in an effort to agree upon such a suitable and equitable provision to effect the original intent of the parties.

 

           (j) Counterparts . This Agreement may be executed in one or more counterparts, each of which when so executed and delivered or transmitted by facsimile, e-mail or other electronic means, shall be deemed to be an original and all of which taken together shall constitute but one and the same instrument. A facsimile or electronic signature is deemed an original signature for all purposes under this Agreement.

 

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[ Signature Page Follows ]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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      IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto on the date first above written.

 

	VISHAY INTERTECHNOLOGY, INC.
	By:	/s/ Lior E. Yahalomi
		Name: Lior E. Yahalomi
		Title: Executive Vice President and Chief
		Financial Officer
	VISHAY PRECISION GROUP, INC.
	By:	/s/ William M. Clancy
		Name: William M. Clancy
		Title: Executive Vice President and Chief
		Financial Officer

EXHIBIT A

 

SECONDMENT FEE

 

VPG will pay to Vishay a Secondment Fee equal to $60,000 in the aggregate per year in exchange for the services to be provided by Dr. Felix Zandman and Mr. Reuben Katraro.

 

Portions of this exhibit were omitted and filed separately with the Secretary of the Securities and Exchange Commission pursuant to an application for confidential treatment filed with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934. Such portions are marked by [***].

 

PATENT LICENSE AGREEMENT

 

      This non-exclusive Patent License Agreement (“ Agreement ”) is entered into as of July 6, 2010 (the “ Effective Date ”), by and between Vishay Dale Electronics, Inc., a Delaware corporation (“ Licensor ”), and Vishay Precision Group, Inc. a Delaware corporation (" Licensee ").

 

RECITALS :

 

      WHEREAS, Licensor is the assignee of record to United States Patent No. RE39,660; and

 

      WHEREAS, in order to effect and consummate the separation (the “ Separation ”) contemplated by that certain Master Separation and Distribution Agreement between Licensee and Licensor’s affiliate dated June 22, 2010 (the “ Master Separation Agreement ”), Licensee desires to secure a non-exclusive license under the Licensed Patent (as defined herein) to manufacture, use and sell Licensed Products (as defined herein) worldwide.

 

      NOW, THEREFORE, in consideration of the terms and provisions of this Agreement and the Separation, and for other good and valuable consideration, the receipt and sufficiency of which is acknowledged by the execution and delivery hereof, Licensor and Licensee hereby agree as follows:

 

1.

Definitions .

 

      (a) “ Licensed Patent ” shall mean United States Patent No. RE39,660 and any reissues, reexaminations, divisionals, continuations, continuations-in-part, extensions, foreign counterparts and any other patents or patent applications claiming priority to any application in the family of filings leading to the issuance of United States Patent No. RE39,660.

 

      (b) “ Licensed Products ” shall mean articles or assemblies listed on Schedule A , as it may be amended from time to time in accordance with the terms of this Agreement.

 

2.		License Grant . Subject to the terms and conditions set forth in this Agreement, Licensor hereby grants to Licensee, a non-exclusive, royalty-free, worldwide right and license under the Licensed Patent to make, have made, use, sell, offer for sale, export and import Licensed Products.
3.		Term . This Agreement shall commence on the Effective Date, and, so long as this Agreement has not been terminated by its terms, continue in full force and effect until the expiration date of the last to expire patent in the family of the Licensed Patent.
4.		Sublicensing . The license shall be sublicenseable to direct or indirect wholly-owned subsidiaries of Licensee, provided that Licensee shall be responsible for the compliance by its subsidiaries with the terms of this Agreement. Otherwise, the license shall be non-assignable and non-sublicensable. Any purported license or assignment in violation of this Agreement shall be void.
5.		Maintenance . Licensor may in its sole discretion cease the maintenance of any Licensed

 

 

 

		Patent; provided , however , that if Licensor elects not to pay a maintenance fee on the Licensed Patent, it will provide written notice to that effect to Licensee at least three months before due date of the next maintenance fee payment thereon, and thereafter, Licensee may elect to pay the maintenance fee.
6.		Patent Marking . All Licensed Products shall be marked with and display the number of the United States Licensed Patent as described in 35 U.S.C. § 287(a) .
7.		Enforcement . Licensee shall, at its own reasonable expense, cooperate fully and promptly with Licensor in the protection of Licensor’s rights in the Licensed Patent, in such manner and to such extent as Licensor may reasonably request.
		Each party shall promptly notify the other party in writing of any actual or potential infringement, or any other unauthorized use of or violation of the Licensed Patent of which it becomes aware (each an “ Infringement ”). Licensor may take such action as it, in its sole discretion, deems necessary or advisable to stop any Infringement. Licensee may request in writing that Licensor institute an action to stop an Infringement affecting the Licensed Products. If Licensor receives such a written request and does not institute such action within thirty (30) days, Licensee shall be entitled to institute such action as it deems necessary or advisable to stop such Infringement, in which Licensor shall be entitled to join; provided that Licensee shall not compromise or settle any claim or action regarding the Licensed Patent in any manner that would affect the rights of Licensor without the written consent of Licensor, which consent shall not be unreasonably withheld. The party not taking the lead in any action shall cooperate fully with the other party at the other party’s reasonable request and expense, including Licensor joining a suit instituted by Licensee in accordance with this section to the extent necessary for Licensee to have standing.
		Any monetary recovery or sums obtained in settlement of any action to stop an Infringement shall be allocated between Licensor and Licensee as shall be fair and equitable, taking into account their actual out-of-pocket costs and expenses, including reasonable attorneys’ fees, and the damages sustained by each of them. Any dispute with respect to the allocation of recoveries shall be resolved in accordance with the resolution procedures referred to in Section 11(p) .
8.		Warranties of the Parties . Licensor warrants that it has the right and power to enter into this Agreement, and that there are no outstanding assignments, grants, licenses, encumbrances, obligations or agreements, either written or oral or implied, that prevent it from doing so. Licensee warrants that it has the right and power to enter into this Agreement, and that there are no outstanding assignments, grants, licenses, encumbrances, obligations or agreements, either written or oral or implied, that prevent it from doing so.
9.		WARRANTY DISCLAIMER . EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, LICENSOR MAKES NO OTHER REPRESENTATION, GUARANTEE OR WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR OTHERWISE, UNDER THIS AGREEMENT INCLUDING BUT NOT LIMITED TO REPRESENTATIONS, GUARANTEES OR WARRANTIES AS TO THE RESULTS TO BE EXPECTED FROM USE OF ANY OF THE INVENTION(S) CLAIMED IN THE LICENSED PATENT, OR FROM MANUFACTURE OR SALE OF ANY