Exhibit 10.1
 
 
 
 
 
 
 
 
 
 
 
MASTER SEPARATION AND DISTRIBUTION AGREEMENT
 
 
between
 
VISHAY INTERTECHNOLOGY, INC.
 
 
and
 
VISHAY PRECISION GROUP, INC.
 
 
 
 
 
 
 
 
 
 
 

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TABLE OF CONTENTS
 

      Page ARTICLE I       DEFINITIONS 2   ARTICLE II   BUSINESS SEPARATION 14
       Section 2.1   Separation 14        Section 2.2   [Intentionally omitted]
14        Section 2.3   Transfer of Separated Assets; Assumption of Assumed
Liabilities 15        Section 2.4   Separated Assets 15        Section 2.5  
Liabilities 17        Section 2.6   Excluded Assumed Liabilities 18       
Section 2.7   Deferred Separation Transactions 19        Section 2.8   Consents
and Governmental Approvals 19        Section 2.9   Novation of the Assumed
Liabilities 20        Section 2.10   Documents Relating to Transfers of the
Separated Assets and Assumption of the Assumed Liabilities 21        Section
2.11   Termination of Agreements 22        Section 2.12   Release of Security
Interest 22        Section 2.13   No Representation or Warranty 22       
Section 2.14   Use of Cash 23        Section 2.15   Plan of Reorganization 23
       Section 2.16   Assets Transferred to Vishay 23        Section 2.17   Net
Cash 23   ARTICLE III   THE DISTRIBUTION AND ACTIONS PENDING THE DISTRIBUTION 24
       Section 3.1   Transactions Prior to the Distribution 24        Section
3.2   Conditions Precedent to Consummation of the Distribution 25        Section
3.3   Documents to be Delivered by Vishay 27        Section 3.4   Documents to
be Delivered by VPG 27        Section 3.5   Distribution 28   ARTICLE IV  
ADDITIONAL COVENANTS, FURTHER ASSURANCES AND OTHER MATTERS 30        Section 4.1
  Provision of Corporate Records 30        Section 4.2   Further Assurance 30
       Section 4.3   Agreement For Exchange Of Information 31        Section 4.4
  Production of Witnesses; Records; Cooperation 33        Section 4.5  
Confidentiality 33        Section 4.6   Privileged Matters 34        Section 4.7
  Cooperation with Respect to Know-how 36        Section 4.8   VPG Exchangeable
Notes and VPG Warrants 36        Section 4.9   Tax Matters 37        Section
4.10   Employee Matters 37        Section 4.11   Intellectual Property 37

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       Section 4.12       Services Support       37        Section 4.13   Real
Property 37   ARTICLE V   SURVIVAL AND INDEMNIFICATION 38        Section 5.1  
Mutual Release 38        Section 5.2   Indemnification by Vishay 39       
Section 5.3   Indemnification by VPG 40        Section 5.4   Tax Indemnification
40        Section 5.5   Indemnification Obligations Net of Insurance Proceeds
and Other Amounts 41        Section 5.6   Procedures for Indemnification of
Third Party Claims 41        Section 5.7   Procedures for Indemnification of
Direct Claims 43        Section 5.8   Payments 43        Section 5.9  
Contribution 44        Section 5.10   Remedies Cumulative 44        Section 5.11
  Survival of Indemnities 44   ARTICLE VI   CONTINGENT GAINS AND CONTINGENT
LIABILITIES 44        Section 6.1   Contingent Gains 44        Section 6.2  
Exclusive Contingent Liabilities 45        Section 6.3   Shared Contingent
Liabilities 45        Section 6.4   Payments 46        Section 6.5   Procedures
to Determine Status of Contingent Liability or Contingent Gain 46        Section
6.6   Certain Case Allocation Matters 47   ARTICLE VII   INSURANCE 47       
Section 7.1   Insurance Matters Generally 47        Section 7.2   Shared
Insurance Policies 47        Section 7.3   Insurance for VPG Officers &
Directors 49        Section 7.4   Director and Officer Indemnification 49       
Section 7.5   VPG Insurance 49   ARTICLE VIII   DISPUTE RESOLUTION 49       
Section 8.1   Agreement to Resolve Disputes 49        Section 8.2   Dispute
Resolution; Mediation 50        Section 8.3   Arbitration 51        Section 8.4
  Continuity of Service and Performance 51        Section 8.5   Limitation of
Liability 52   ARTICLE IX   Termination 52   ARTICLE X   MISCELLANEOUS 52       
Section 10.1   Counterparts 52        Section 10.2   Entire Agreement 52       
Section 10.3   Construction 53        Section 10.4   Assignability 54

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       Section 10.5       Third Party Beneficiaries       54        Section 10.6
  Governing Law 54        Section 10.7   Notices 54        Section 10.8  
Severability 55        Section 10.9   Nonrecurring Costs and Expenses 55       
Section 10.10   Press Releases; Public Announcements 56        Section 10.11  
Survival of Covenants 56        Section 10.12   Waiver of Default 56       
Section 10.13   Amendments 56        Section 10.14   Specific Performance 57
       Section 10.15   Consent to Jurisdiction 57        Section 10.16   Waiver
of jury trial 57

Annex A       VPG Group Balance Sheet   SCHEDULES Schedule 1.1   Capital
Allocation Transactions Schedule 1.2   Exclusive VPG Contingent Liabilities
Schedule 1.3   Separation Transactions Schedule 1.4   Shared Contingent
Liabilities Schedule 2.4(a)(iii)   Subsidiaries of VPG Schedule 2.4(b)(i)  
Excluded Assets Schedule 2.5(b)(ii)   Excluded Assumed Liabilities Schedule
2.5(b)(v)   Excluded Assumed Environmental Liabilities Schedule 2.16   Assets
Being Transferred to Members of Vishay Group Schedule 3.3(b)   Director and
Officer Resignations by Members of Vishay Group Schedule 3.4(b)   Director and
Officer Resignations by Members of VPG Group   EXHIBITS Exhibit A Employee
Matters Agreement Exhibit B IP License Agreement Exhibit C Lease Agreements
Exhibit D Patent License Agreement Exhibit E RCK IP License Agreement Exhibit F
RCK Manufacturing Agreement Exhibit G RCK Supply Agreement Exhibit H Secondment
Agreement Exhibit I Supply Agreement Exhibit J Tax Matters Agreement Exhibit K
Trademark License Agreement Exhibit L Transition Services Agreement

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MASTER SEPARATION AND DISTRIBUTION AGREEMENT
 
     This Master Separation and Distribution Agreement (this “Agreement”) is
entered into as of June 22, 2010, by and between Vishay Intertechnology, Inc., a
corporation organized under the laws of the State of Delaware (“Vishay”), and
Vishay Precision Group, Inc., a corporation organized under the laws of the
State of Delaware (“VPG”).
 
RECITALS
 
     WHEREAS, the Board of Directors of Vishay (the “Vishay Board”) has
determined it is appropriate and desirable to separate Vishay and VPG into two
publicly-traded companies by separating from Vishay and transferring to VPG
Vishay’s MGF Business (as defined below), and related assets and liabilities, in
a series of transactions on the terms and conditions set forth herein.
 
     WHEREAS, the Vishay Board has determined that it would be advisable and in
the best interests of Vishay and its stockholders for Vishay to distribute, on a
pro rata basis, (i) to the holders as of the Record Date (as defined below) of
the issued and outstanding shares of Vishay’s common stock, par value $0.10 per
share (the “Vishay common stock”), all of the issued and outstanding shares of
VPG’s common stock, par value $0.10 per share (the “VPG common stock”), owned by
Vishay as of the Distribution Date (as defined below) and (ii) to the holders as
of the Record Date of the issued and outstanding shares of Vishay’s Class B
common stock, par value $0.10 per share (the “Vishay Class B common stock”,
together with the Vishay common stock, the “Vishay Stock”), all of the issued
and outstanding shares of VPG’s Class B common stock, par value $0.10 per share
(the “VPG Class B common stock”, together with VPG common stock, the “VPG
Stock”), owned by Vishay as of the Distribution Date, in each case, as further
described herein (collectively, the “Distribution”);
 
     WHEREAS, Vishay and VPG intend that the Separation (as defined below) and
the Distribution will qualify for United States federal income tax purposes as
transactions that are generally tax free under, among other provisions, Sections
355 and 368(a)(1)(D) of the Internal Revenue Code of 1986, as amended (the
“Code”) and hereby adopt this Agreement as a “plan of reorganization”; and
 
     WHEREAS, the parties intend in this Agreement to set forth the principal
arrangements between them regarding the Separation and the Distribution and
certain other agreements that will govern the relationship of Vishay and VPG
following the Distribution.
 
     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, intending to be legally bound, as
follows:
 

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ARTICLE I
 
DEFINITIONS
 
     Capitalized terms used but not defined herein shall have the meanings set
forth in this Article I.
 
     “AAA” has the meaning set forth in Section 8.3(a) of this Agreement.
 
     “Action” means any claim, demand, action, suit, counter suit, arbitration,
inquiry, proceeding or investigation by or before any Governmental Authority and
shall include any negotiations in settlement of or in lieu of an Action.
 
     “Actual VPG Net Cash” has the meaning set forth in Section 2.17(a) of this
Agreement.
 
     “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.
 
     “Agent” means the distribution agent to be appointed by Vishay to
distribute to the stockholders of Vishay pursuant to the Distribution all of the
shares of VPG Stock.
 
     “Agreement” has the meaning set forth in the preamble of this Agreement.
 
     “Ancillary Agreements” means the (i) Tax Matters Agreement, (ii) Transition
Services Agreement, (iii) Employee Matters Agreement, (iv) License Agreements,
(v) Lease Agreements, (vi) RCK Agreements, (vii) Supply Agreements, and (viii)
Secondment Agreement, and, in the singular, means any one of them.
 
     “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.
 
     “Assets” means assets, properties and rights (including goodwill), wherever
located (including in the possession of vendors or other third parties or
elsewhere), whether real, personal or mixed, tangible, intangible or contingent,
in each case whether or not recorded or reflected or required to be recorded or
reflected on the books and records or financial statements of any Person,
including the following:
 
     (i) all accounting and other books, records and files whether in paper,
microfilm, microfiche, computer tape or disc, magnetic tape or any other form;
 
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     (ii) all computers and other electronic data processing equipment,
fixtures, machinery, equipment, furniture, office equipment, motor vehicles and
other transportation equipment, special and general tools, prototypes and models
and other tangible personal property, wherever located that are owned or leased
by the Person, together with any express or implied warranty by the
manufacturers, sellers or lessors of any item or component part thereof;
 
     (iii) all inventories, wherever located, including all finished goods,
(whether or not held at a location or facility or in transit), work in process,
raw materials, spare parts and all other materials and supplies to be used or
consumed in the production of finished goods;
 
     (iv) all interests in real property of whatever nature, including any
Encumbrances thereto, whether as owner, mortgagee or holder of a Security
Interest in real property, lessor, sublessor, lessee, sublessee or otherwise;
 
     (v) all interests in any capital stock or other equity interests of any
Subsidiary or any other Person; all bonds, notes, debentures or other securities
issued by any Subsidiary or any other Person; all loans, advances or other
extensions of credit or capital contributions to any Subsidiary or any other
Person; and all other investments in securities of any Person;
 
     (vi) all license agreements, leases of personal property, open purchase
orders for raw materials, supplies, parts or services, unfilled orders for the
manufacture and sale of products and other contracts, agreements or commitments;
 
     (vii) all deposits and prepaid expenses, letters of credit and performance
and surety bonds, claims for refunds and rights of set-off in respect thereof;
 
     (viii) all written technical Information, data, specifications, research
and development Information, engineering drawings, operating and maintenance
manuals, and materials and analyses whether prepared by Affiliates, by
consultants or other third parties;
 
     (ix) all Intellectual Property and licenses from third Persons granting the
right to use any Intellectual Property;
 
     (x) all computer applications, programs and other software (whether in
source code, object code or other form), including operating software, network
software, firmware, middleware, design software, design tools, compilations and
data, technology supporting the foregoing, systems documentation, and user and
training materials and instructions related to any of the foregoing;
 
     (xi) all cost Information, sales and pricing data, customer prospect lists,
supplier records, customer and supplier lists, customer and vendor data,
correspondence and lists, product literature, artwork, design, development and
manufacturing files, vendor and customer drawings, formulations and
specifications, quality records and reports and other books, records, studies,
surveys, reports, plans and documents;
 
     (xii) all trade accounts and notes receivable and other rights to payment
from customers and all security for such accounts or rights to payment,
including all trade accounts receivable representing amounts receivable in
respect of goods shipped or products sold or otherwise disposed of or services
rendered to customers, (b) all other accounts and notes receivable and all
security for such accounts or notes, and (c) any claim, remedy or other right
relating to any of the foregoing;
 
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     (xiii) all rights under Contracts, all claims or rights against any Person
arising from the ownership of any Asset, all rights in connection with any bids
or offers and all claims, choses in action or similar rights, whether accrued or
contingent;
 
     (xiv) all rights under insurance policies and all rights in the nature of
insurance, indemnification or contribution, including Insurance Proceeds;
 
     (xv) all licenses, permits, approvals and authorizations which have been
issued by any Governmental Authority; and
 
     (xvi) cash or cash equivalents, bank accounts, lock boxes and other deposit
arrangements.
 
     “Assumed Liabilities” has the meaning set forth in Section 2.5(a) of this
Agreement.
 
     “Auditor” has the meaning set forth in Section 2.17(b) of this Agreement.
 
     “Business” means the Vishay Business or the MGF Business, as the context
requires.
 
     “Business Day” means any day other than a Saturday, Sunday or a day on
which commercial banks are authorized or required to close in New York, New York
or in Philadelphia, Pennsylvania.
 
     “Capital Allocation Transactions” means the repayment of outstanding
indebtedness owed by one or more members of the VPG Group to one or more members
of the Vishay Group or by one or more members of the Vishay Group to one or more
members of the VPG Group or any dividend or other distributions by one or more
members of the VPG Group to one or more members of the Vishay Group or a capital
contribution by one or more members of the Vishay Group to one or more members
of the VPG Group, as described in Schedule 1.1, and in the singular means any
one such transaction. The Capital Allocation Transactions are intended to
proceed in accordance with and pursuant to the steps set forth in the request
for a private letter ruling submitted by Vishay to the IRS on December 23, 2009,
as amended from time to time.
 
     “Class B Common Stock Distribution Ratio” has the meaning set forth in
Section 3.5(c)(iii) of this Agreement.
 
     “Code” has the meaning set forth in the recitals to this Agreement.
 
     “Commission” means the Securities and Exchange Commission.
 
     “Common Stock Distribution Ratio” has the meaning set forth in Section
3.5(c)(iii) of this Agreement.
 
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     “Confidential Information” means all proprietary, design or operational
Information, data or material including, without limitation: (a) specifications,
ideas and concepts for goods and services; (b) manufacturing specifications and
procedures; (c) design drawings and models; (d) materials and material
specifications; (e) quality assurance policies, procedures and specifications;
(f) customer, client, manufacturer and supplier Information; (g) computer
software and derivatives thereof relating to design development or manufacture
of goods; (h) training materials and Information; (i) inventions, devices, new
developments, methods and processes, whether patentable or unpatentable and
whether or not reduced to practice; (j) all other know-how, methodology,
procedures, techniques and Trade Secrets; (k) proprietary earnings reports and
forecasts; (l) proprietary macro-economic reports and forecasts; (m) proprietary
marketing, advertising and business plans, objectives and strategies; (n)
proprietary general market evaluations and surveys; (o) proprietary financing
and credit-related Information; (p) other copyrightable or patented works; and
(q) all similar and related Information in whatever form; in each case, of one
party which, prior to or following the Distribution Date, has been disclosed by
Vishay or members of its Group on the one hand, or VPG or members of its Group,
on the other hand, in written, oral (including by recording), electronic, or
visual form to, or otherwise has come into the possession of, the other Group,
including pursuant to the access provisions of Section 4.3 hereof or any other
provision of this Agreement.
 
     “Consents” means any consents, waivers or approvals, or notification
requirements.
 
     “Contingent Claim Committee” means a committee composed of one
representative designated from time to time by each of Vishay and VPG that shall
be established in accordance with Section 6.5.
 
     “Contingent Gain” means any claim or right of any member of the Vishay
Group or the VPG Group, whenever arising, against any Person, other than a
Person released or intended to be released from a claim or other right under
Article V; provided, that (i) such claim or right has accrued as of the
Distribution Date, and (ii) the existence or scope of the claim or right against
such other Person was not acknowledged, fixed or determined in any material
respect as of the Distribution Date as a result of a dispute or as a result of
any other uncertainty due to the failure of such claim or right to have been
discovered or asserted as of the Distribution Date. For purposes of the
foregoing, a claim or right shall be deemed to have accrued as of the
Distribution Date if all the elements of the claim necessary for its assertion
shall have occurred on or prior to the Distribution Date such that the claim or
right, were it to have been asserted in an Action on or prior to the
Distribution Date, would not be dismissed by a court on ripeness or similar
grounds, regardless of whether there was any Action pending, threatened or
contemplated as of the Distribution Date with respect thereto.
 
     “Contingent Liability” means any Liability of a member of the Vishay Group
or the VPG Group, whenever arising, against any Person unless that Person has
been released or the Liability to that Person is intended to be released under
Article V; provided, that (i) such Liability has accrued as of the Distribution
Date and (ii) the existence or scope of such Liability was not acknowledged,
fixed or determined in any material respect as of the Distribution Date as a
result of a dispute or as a result of any other uncertainty due to the failure
of such Liability to have been discovered or asserted as of the Distribution
Date. For purposes of the foregoing, a Liability shall be deemed to have accrued
as of the Distribution Date if all the elements necessary for the assertion of a
claim with respect to such Liability shall have occurred on or prior to the
Distribution Date such that the claim, were it to have been asserted in an
Action on or prior to the Distribution Date, would not be dismissed by a court
on ripeness or similar grounds.
 
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     “Contract” means any contract, agreement, lease, purchase and/or
commitment, license, consensual obligation, promise or undertaking (whether
written or oral and whether express or implied) that is legally binding on any
Person or any part of its property under Applicable Law, including all claims or
rights against any Person, choses in action and similar rights, whether accrued
or contingent with respect to any such contract, agreement, lease, purchase
and/or commitment, license, consensual obligation, promise or undertaking, but
excluding this Agreement and any Ancillary Agreement, save as otherwise
expressly provided in this Agreement or in any Ancillary Agreement.
 
     “Determination Date” has the meaning set forth in Section 2.17(b) of this
Agreement.
 
     “Determination Request” has the meaning set forth in Section 6.5(b) of this
Agreement.
 
     “Distribution” has the meaning set forth in the recitals to this Agreement.
 
     “Distribution Date” means the date determined by the Vishay Board as the
date on which the Distribution shall be effected.
 
     “Dispute” has the meaning set forth in Section 8.2(a) of this Agreement.
 
     “Dispute Notice” has the meaning set forth in Section 8.2(a) of this
Agreement.
 
     “Effective Time” has the meaning set forth in Section 3.5(b) of this
Agreement.
 
     “Employee Matters Agreement” means the Employee Matters Agreement
substantially in the form attached hereto as Exhibit A. From and after the
Distribution Date, the Employee Matters Agreement shall refer to the agreement
executed and delivered substantially in the form attached hereto as Exhibit A,
as amended and/or modified from time to time in accordance with its terms.
 
     “Encumbrance” means, with respect to any Asset, mortgages, liens,
hypothecations, pledges, security interests, easements, encroachments, rights to
acquire, use restrictions, transfer restrictions or other encumbrances of any
kind in respect of such Asset, whether or not filed, recorded or otherwise
perfected under Applicable Law.
 
     “Environmental Law” means any federal, state, local, or foreign law,
regulation, order, judgment, decree, permit, authorization, common law or agency
requirement whether now existing or hereafter enacted or promulgated relating
to: (A) the protection, investigation, or restoration of the environment,
health, safety or natural resources; (B) the handling, use, presence, disposal,
release or threatened release of any Hazardous Substance; or (C) noise, odor,
indoor air, employee exposure, wetlands, pollution, contamination or any injury
or threat of injury to persons or property relating to any Hazardous Substance;
including but not limited to the Comprehensive Environmental, Compensation and
Liability Act of 1980 as amended, the Resource Conservation and Recovery Act,
the Clean Air Act as amended, the Toxic Substances Control Act as amended, the
Occupational Safety and Health Act of 1970 and comparable local, state and
foreign statutes. As used herein, “Hazardous Substance” means any substance that
is: (A) listed, classified or regulated pursuant to any Environmental Law; (B)
any petroleum product or by-product, asbestos-containing material,
lead-containing paint or plumbing, polychlorinated biphenyl, radioactive
material or radon; and (C) any other substance which is subject to regulatory
Action by any Governmental Authority in connection with any Environmental Law.
 
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     “Environmental Liabilities” means all Liabilities relating to, arising out
of or resulting from any Environmental Law or Contract relating to
environmental, health or safety matters (including all removal, remediation or
cleanup costs, investigatory costs, governmental response costs, natural
resources damages, property damages, personal injury damages, costs of
compliance with any product take back requirements or with any settlement,
judgment or other determination of Liability and indemnity, contribution or
similar obligations) and all costs and expenses, interest, fines, penalties or
other monetary sanctions in connection therewith.
 
     “Exchange Act” means the Securities Exchange Act of 1934, as amended,
together with the rules and regulations promulgated thereunder.
 
     “Excluded Assets” has the meaning set forth in Section 2.4(b) of this
Agreement.
 
     “Excluded Assumed Liabilities” has the meaning set forth in Section 2.5(b)
of this Agreement.
 
     “Exclusive Vishay Contingent Gain” means any Contingent Gain other than an
Exclusive VPG Contingent Gain or a Shared Contingent Gain.
 
     “Exclusive Vishay Contingent Liability” means any Contingent Liability
other than an Exclusive VPG Contingent Liability or a Shared Contingent
Liability.
 
     “Exclusive VPG Contingent Gain” means any Contingent Gain if such
Contingent Gain relates exclusively to the MGF Business or if such Contingent
Gain is expressly assigned to any member of the VPG Group pursuant to this
Agreement or any Ancillary Agreement. As of the date of this Agreement, the
parties are not aware of the existence of any Exclusive VPG Contingent Gains.
 
     “Exclusive VPG Contingent Liability” means any Contingent Liability if such
Contingent Liability relates exclusively to the MGF Business, including the
matters listed or described on Schedule 1.2 hereto, or if such Contingent
Liability is expressly assigned to any member of the VPG Group pursuant to this
Agreement or any Ancillary Agreement. For the sake of clarity, the Contingent
Liabilities described on Schedule 1.4 shall be allocated as set forth on that
schedule.
 
     “final determination” has the meaning set forth in Section 5.8 of this
Agreement.
 
     “Form 10 Registration Statement” means the registration statement on Form
10 (including any and all exhibits filed thereto) to be filed under the Exchange
Act, pursuant to which the shares of VPG Stock to be issued in VPG Distribution
will be registered, together with all amendments thereto.
 
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     “GAAP” has the meaning set forth in Section 2.4(a)(v) of this Agreement.
 
     “Governmental Approvals” means any notices, reports or other filings to be
made, or any Consents, registrations, approvals, permits or authorizations to be
obtained from, any Governmental Authority.
 
     “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 the Vishay Group or the VPG Group, as the context requires.
 
     “Indemnified Party” has the meaning set forth in Section 5.5(a) of this
Agreement.
 
     “Indemnifying Party” has the meaning set forth in Section 5.5(a) of this
Agreement.
 
     “Indemnity Payment” has the meaning set forth in Section 5.5(a) of this
Agreement.
 
     “Information” means information, whether or not patentable or
copyrightable, in written, oral, electronic or other tangible or intangible
forms, stored in any medium, including studies, reports, records, books,
contracts, instruments, surveys, discoveries, ideas, concepts, know-how,
techniques, designs, specifications, drawings, blueprints, diagrams, models,
prototypes, samples, flow charts, data, computer data, disks, diskettes, tapes,
computer programs or other software, marketing plans, customer names,
communications by or to attorneys (including attorney-client privileged
communications), memos and other materials prepared by attorneys or under their
direction (including attorney work product), and other technical, financial,
employee or business information or data, but in any case excluding back-up
tapes.
 
     “Information Statement” means the information statement forming a part of
the Form 10 Registration Statement.
 
     “Insurance Policy” means any insurance policies and insurance Contracts,
including without limitation general liability, property and casualty, workers’
compensation, automobile, marine, directors & officers liability, errors and
omissions, employee dishonesty and fiduciary liability policies and contracts,
but excluding life and other benefits policies or Contracts, whether in the
nature of primary, excess, umbrella or self-insurance overage, together with all
rights, benefits and privileges thereunder.
 
     “Insurance Proceeds” means those monies (in each case net of any costs or
expenses incurred in the collection thereof and net of any applicable premium
adjustments (including reserves and retrospectively rated premium adjustments)):
(a) received by an insured from an insurance carrier; or (b) paid by an
insurance carrier on behalf of the insured, net of any applicable premium
deductible or self insured retention.
 
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     “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.
 
     “IP License Agreement” means the IP License Agreement, between VPG, as
licensor, and Vishay or a Subsidiary of Vishay, as licensee, for the license of
certain Intellectual Property relating to the manufacture of strain gages,
substantially in the form of Exhibit B. From and after the Distribution Date,
the IP License Agreement shall refer to the agreement executed and delivered
substantially in the form attached hereto as Exhibit B, as amended and/or
modified from time to time in accordance with its terms.
 
     “IRS” means the Internal Revenue Service.
 
     “Lease Agreements” means the real property lease agreements between one or
more members of the Vishay Group, on the one hand, and one or more members of
the VPG Group on the other hand, listed on Exhibit C, substantially in the forms
attached to such Exhibit. From and after the Distribution Date, the Lease
Agreements shall refer to the real property lease agreements substantially in
the form attached to Exhibit C, each as amended and/or modified from time to
time in accordance with its terms.
 
     “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.
 
     “License Agreements” mean the Trademark License Agreement, the Patent
License Agreement, the IP License Agreement and the RCK IP License Agreement.
 
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     “MGF Business” means the measurements and foil resistor business owned and
operated, indirectly or directly, by Vishay prior to the Distribution, to be
owned and operated, directly or indirectly, by VPG after the Distribution.
 
     “NYSE” has the meaning set forth in Section 3.1(e) of this Agreement.
 
     “Party,” whether or not capitalized, means Vishay or VPG.
 
     “Patent License Agreement” means the Patent License Agreement, between
Vishay or a Subsidiary of Vishay, as licensor, and VPG, as licensee,
substantially in the form of Exhibit D. From and after the Distribution Date,
the Patent License Agreement shall refer to the agreement executed and delivered
substantially in the form attached hereto as Exhibit D, as amended and/or
modified from time to time in accordance with its terms.
 
     “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.
 
     “Privilege” has the meaning set forth in Section 4.6(a) of this Agreement.
 
     “Privileged Information” has the meaning set forth in Section 4.6(a) of
this Agreement.
 
     “RCK Agreements” means the RCK IP License Agreement, RCK Manufacturing
Agreement and the RCK Supply Agreement.
 
     “RCK IP License Agreement” means the IP License Agreement, between VPG or a
Subsidiary of VPG, as licensor, and Vishay or a Subsidiary of Vishay, as
licensee, for the license of certain Intellectual Property relating to the
manufacture of RCK HR foil resistor products, substantially in the form of in
the form of Exhibit E. From and after the Distribution Date, the RCK IP License
Agreement shall refer to the agreement executed and delivered substantially in
the form attached hereto as Exhibit E, as amended and/or modified from time to
time in accordance with its terms.
 
     “RCK Manufacturing Agreement” means the Manufacturing Agreement, between
VPG or a Subsidiary of VPG, as buyer, and Vishay or a Subsidiary of Vishay, as
manufacturer, relating to the manufacture of specified RCK HR foil resistor
products, substantially in the form of Exhibit F. From and after the
Distribution Date, the RCK Manufacturing Agreement shall refer to the agreement
executed and delivered substantially in the form attached hereto as Exhibit F,
as amended and/or modified from time to time in accordance with its terms.
 
     “RCK Supply Agreement” means the Supply Agreement, between VPG or a
Subsidiary of VPG, as supplier, and Vishay or a Subsidiary of Vishay, as buyer,
relating to the sale and manufacture of specified RCK foil resistor chips,
substantially in the form of Exhibit G. From and after the Distribution Date,
the RCK Supply Agreement shall refer to the agreement executed and delivered
substantially in the form attached hereto as Exhibit G, as amended and/or
modified from time to time in accordance with its terms.
 
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     “Record Date” means the close of business on the date to be determined by
Vishay’s Board in its sole and absolute discretion as the record date for
determining the stockholders of Vishay entitled to receive shares of VPG Stock
in the Distribution.
 
     “Record Holder” mean a holder of record of Vishay Stock as of the close of
business on the Record Date.
 
     “Registrar and Transfer Agent” has the meaning set forth in Section
3.5(c)(i) of this Agreement.
 
     “Response” has the meaning set forth in Section 8.2(a) of this Agreement.
 
     “Secondment Agreement” means the secondment agreement between one or more
members of the Vishay Group, as the seconding party, on the one hand, and one or
more members of the VPG Group on the other hand, listed on Exhibit H,
substantially in the form attached to such Exhibit. From and after the
Distribution Date, the Secondment Agreement shall refer to the secondment
agreement substantially in the form attached to Exhibit H, as amended and/or
modified from time to time in accordance with its terms.
 
     “Senior Party Representative” has the meaning set forth in Section 8.2(a)
of this Agreement.
 
     “Separated Assets” has the meaning set forth in Section 2.4(a) of this
Agreement.
 
     “Separation” means the multi-step process described in Article II,
including the Separation Transactions and the Capital Allocation Transactions,
by which the MGF Business shall be transferred, directly or indirectly, from
Vishay and members of the Vishay Group to VPG and members of the VPG Group.
 
     “Separation Transactions” means the transfers of assets, shares and other
equity interests to be performed by Vishay, VPG and members of each respective
Group prior to the Distribution, in the manner referred to in Schedule 1.3
hereto and, in the singular, means any one such transaction. The Separation
Transactions are intended to proceed in accordance with and pursuant to the
steps set forth in the request for a private letter ruling submitted by Vishay
to the IRS on December 23, 2009, as amended from time to time.
 
     “Shared Contingent Gain” means, without duplication, any Contingent Gain
that is not an Exclusive Vishay Contingent Gain or an Exclusive VPG Contingent
Gain and shared between the Groups.
 
     “Shared Contracts” means Contracts with a third party providing for rights
and obligations of both one or more members of the Vishay Group and one or more
members of the VPG Group.
 
     “Shared Contingent Liability” means, without duplication, any Contingent
Liability that is not an Exclusive Vishay Contingent Liability or an Exclusive
VPG Contingent Liability and shared between the Groups, which Shared Contingent
Liabilities shall be allocated as set forth in this Agreement and described on
Schedule 1.4.
 
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     “Shared VPG Percentage” means the proportion of the Shared Contingent Gain
or the Shared Contingent Liability, as applicable, that relates to the MGF
Business, provided that, if such Shared Contingent Gain or Shared Contingent
Liability, as the case may be, cannot reasonably be allocated, then the Shared
VPG Percentage shall be 10%.
 
     “Shared Percentage” means the Shared Vishay Percentage or the Shared VPG
Percentage, as the case may be.
 
     “Shared Vishay Percentage” means the proportion of the Shared Contingent
Gain or the Shared Contingent Liability, as applicable, that relates to the
Vishay Business; provided that if such Shared Contingent Gain or Shared
Contingent Liability, as the case may be, cannot reasonably be allocated, then
the Shared VPG Percentage shall be 90%.
 
      “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.
 
     “Supply Agreements” means the Supply Agreements, between one or more
members of the Vishay Group, on the one hand, and one or more members of the VPG
Group, on the other hand, listed on Exhibit I, substantially in the form
attached to such Exhibit I. From and after the Distribution Date, the Supply
Agreement shall refer to the supply agreement substantially in the form attached
to Exhibit I, as amended and/or modified from time to time in accordance with
its terms.
 
     “Taxes” has the meaning set forth in the Tax Matters Agreement.
 
     “Tax Matters Agreement” means the Tax Matters Agreement substantially in
the form attached hereto as Exhibit J. From and after the Distribution Date, the
Tax Matters Agreement shall refer to the agreement executed and delivered
substantially in the form attached hereto as Exhibit J, as amended and/or
modified from time to time in accordance with its terms.
 
     “Third Party Claim” has the meaning set forth in Section 5.6(a) of this
Agreement.
 
     “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.
 
     “Trademark License Agreement” means the Trademark License Agreement,
between Vishay, as licensor, and VPG, as licensee, substantially in the form of
Exhibit K. From and after the Distribution Date, the Trademark License Agreement
shall refer to the agreement executed and delivered substantially in the form
attached hereto as Exhibit K, as amended and/or modified from time to time in
accordance with its terms.
 
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     “Transition Services Agreement” means the transition services agreement
between one or more members of the Vishay Group, on the one hand, and one or
more members of the VPG Group, on the other hand, listed on Exhibit L,
substantially in the forms attached to such Exhibit. From and after the
Distribution Date, the Transition Services Agreement shall refer to the
transition services agreement substantially in the form attached as Exhibit L,
as amended and/or modified from time to time in accordance with its terms.
 
     “Vishay” has the meaning set forth in the preamble of this Agreement.
 
     “Vishay Board” has the meaning set forth in the recitals to this Agreement.
 
     “Vishay Business” means, collectively, any and all businesses other than
the MGF Business owned and operated, directly or indirectly, by Vishay
(including without limitation the strain gage business operated by Vishay S.A.).
 
     “Vishay Class B common stock” has the meaning set forth in the recitals to
this Agreement.
 
     “Vishay common stock” has the meaning set forth in the recitals to this
Agreement.
 
     “Vishay Group” means Vishay and each Subsidiary of Vishay and each other
Person that is controlled directly or indirectly by Vishay immediately after the
Distribution.
 
     “Vishay Indemnified Parties” has the meaning set forth in Section 5.3 of
this Agreement.
 
     “Vishay Stock” has the meaning set forth in the recitals to this Agreement.
 
     “VPG” has the meaning set forth in the preamble of this Agreement.
 
     “VPG Class B common stock” has the meaning set forth in the recitals to
this Agreement.
 
     “VPG common stock” has the meaning set forth in the recitals to this
Agreement.
 
     “VPG Contracts” means the following Contracts to which Vishay or any member
of the Vishay Group is a party or by which it or any of its Assets is bound,
whether or not in writing, except for any such Contract that is explicitly
retained by Vishay or any member of the Vishay Group pursuant to any provision
of this Agreement or any Ancillary Agreement: (i) any Contract entered into in
the name of, or expressly on behalf of, the MGF Business; (ii) any Contract that
relates exclusively to the MGF Business; (iii) the portion of any Shared
Contract to the extent attributable to VPG or the MGF Business; (iv) any
Contract that is otherwise expressly contemplated pursuant to this Agreement or
any of the Ancillary Agreements to be assigned to VPG or any member of the VPG
Group; (v) any guarantee, indemnity, representation, warranty or other Liability
of any member of the Vishay Group or the VPG Group in respect of any VPG
Contract, any Assumed Liability or the MGF Business (including guarantees of
financing incurred by customers or other third parties in connection with
purchases of products or services from the MGF Business); and (vi) any other
Contract as agreed between the parties.
 
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     “VPG Group” means VPG, each Subsidiary of VPG and each other Person that is
controlled directly or indirectly by VPG immediately after the Distribution.
 
     “VPG Group Balance Sheet” means the unaudited pro forma combined and
consolidated balance sheet of the VPG Group at April 3, 2010, substantially in
the form attached as Annex A.
 
     “VPG Indemnified Parties” has the meaning set forth in Section 5.2 of this
Agreement.
 
     “VPG Information” has the meaning set forth in Section 4.6(a) of this
Agreement.
 
     “VPG Net Cash” means the amount of (i) all cash and cash equivalents less,
without duplication, the sum of (ii) all notes payable to banks, (iii) all other
indebtedness owed to third parties and (iv) the principal amount of the
exchangeable notes due 2102 of Vishay allocated to VPG, in the case of clauses
(i), (ii) and (iii) of VPG and its Subsidiaries on a consolidated basis, and in
each case as recorded in accordance with GAAP.
 
     “VPG Net Cash Statement” has the meaning set forth in Section 2.17(a) of
this Agreement.
 
     “VPG Stock” has the meaning set forth in the recitals to this Agreement.
 
     “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.
 
ARTICLE II
 
BUSINESS SEPARATION
 
     Section 2.1 Separation. Prior to the Distribution, each of Vishay and VPG
shall, and shall cause the applicable members of its Group to, complete the
Separation Transactions and the Capital Allocation Transactions and otherwise
take all actions necessary to implement the Separation on the terms and subject
to the conditions set forth in this Agreement. The parties acknowledge that the
Separation is intended to result in VPG, directly or indirectly, operating the
MGF Business, owning the Separated Assets and assuming the Assumed Liabilities
as set forth in this Article II. As promptly as practicable after the Separation
is complete and subject to the conditions set forth in Section 3.2, the parties
shall take, or cause to be taken, all actions that are necessary or appropriate
to effectuate the Distribution.
 
     Section 2.2 [Intentionally omitted]
 
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     Section 2.3 Transfer of Separated Assets; Assumption of Assumed
Liabilities. (a) Without limiting the generality of Section 2.1, on the terms
and subject to the conditions set forth in this Agreement, and in furtherance of
the Separation, on or prior to the Distribution Date:
 
     (i) Vishay shall, and shall cause its applicable Subsidiaries to, cause the
Separated Assets to be contributed, assigned, transferred, conveyed and
delivered, directly or indirectly, to VPG and its Subsidiaries, as applicable,
and VPG shall, and shall cause its applicable Subsidiaries to, accept from
Vishay and its Subsidiaries, all of Vishay’s and its Subsidiaries’ rights, title
and interest in and to all of the Separated Assets, which will result in VPG
owning, directly or indirectly, the MGF Business.
 
     (ii) VPG shall, and shall cause its applicable Subsidiaries to, accept,
assume and agree to faithfully perform, discharge and fulfill all of the Assumed
Liabilities in accordance with their respective terms. VPG shall, directly or
indirectly, be responsible for all of the Assumed Liabilities, regardless of
when or where such Assumed Liabilities arose or arise, or whether the facts on
which they are based occurred prior to or subsequent to the Distribution Date,
regardless of where or against whom such Assumed Liabilities are asserted or
determined or whether asserted or determined prior to the Distribution Date.
 
          (b) It is the intention of parties that the transfer of the Separated
Assets and the assumption of the Assumed Liabilities, as aforesaid, shall be
accomplished through the Separation Transactions, subject to the provisions of
Sections 2.7, 2.8, 2.9 and 2.10.
 
     Section 2.4 Separated Assets. (a) For purposes of this Agreement,
“Separated Assets” means, without duplication, those Assets used or contemplated
to be used or held for use exclusively or primarily in the ownership, operation
or conduct of the MGF Business or relating exclusively or primarily to the MGF
Business, including the following:
 
     (i) all Assets (including VPG Contracts) expressly identified in this
Agreement, in any Ancillary Agreement or in any Schedule hereto or thereto,
including those referred to on Schedule 1.3, as Assets to be transferred to, or
retained by, VPG or any other member of the VPG Group;
 
     (ii) any Exclusive VPG Contingent Gain or any Shared VPG Percentage of a
Shared Contingent Gain;
 
     (iii) the outstanding capital stock, units or other equity interests held
by VPG in its Subsidiaries and listed on Schedule 2.4(a)(iii) and the Assets
owned by such Subsidiaries;
 
     (iv) all Assets properly reflected on the VPG Group Balance Sheet,
excluding Assets disposed of by Vishay or any other Subsidiary or entity
controlled by Vishay subsequent to the date of the VPG Group Balance Sheet;
 
     (v) all Assets that have been written off, expensed or fully depreciated by
Vishay or any Subsidiary or entity controlled by Vishay that, had they not been
written off, expensed or fully depreciated, would have been reflected on the VPG
Group Balance Sheet in accordance with accounting principles generally accepted
in the United States (“GAAP”);
 
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     (vi) all Assets acquired by Vishay or any Subsidiary or entity controlled
by Vishay after the date of the VPG Group Balance Sheet and that would be
reflected on the balance sheet of VPG as of the Distribution Date, if such
balance sheet were prepared in accordance with GAAP;
 
     (vii) all Assets transferred to VPG or any member of the VPG Group pursuant
to Section 4.2; provided, however, that any such transfer shall take effect
under Section 4.2 and not under this Section 2.4; and
 
     (viii) any and all Assets owned or held immediately prior to the
Distribution Date by Vishay or any other member of the Vishay Group that are
used in the MGF Business. The intention of this clause (viii) is only to rectify
any inadvertent omission of transfer or conveyance of any Assets that, had the
parties given specific consideration to such Asset as of the date hereof, would
have otherwise been classified as a Separated Asset. No Asset shall be deemed to
be a Separated Asset solely as a result of this clause (viii) if such Asset is
within the category or type of Asset expressly covered by the subject matter of
an Ancillary Agreement. In addition, no Asset shall be deemed a Separated Asset
solely as a result of this clause (viii) unless a claim with respect thereto is
made by VPG or a member of the VPG Group on or prior to the second anniversary
of the Distribution Date.
 
     Notwithstanding anything to the contrary contained in this Section 2.4 or
elsewhere in this Agreement, the Separated Assets shall not in any event include
the Excluded Assets referred to in Section 2.4(b)(i) below.
 
          (b) The following Assets shall not form part of the Separated Assets
and shall remain the exclusive property of Vishay or the relevant member of the
Vishay Group on and after the Separation (the “Excluded Assets”):
 
     (i) any Asset expressly identified on Schedule 2.4(b)(i) or Schedule 2.16;
 
     (ii) the rights of any member of the Vishay Group under any Shared
Contract;
 
     (iii) any Asset transferred to Vishay or to any other relevant member of
the Vishay Group pursuant to Section 4.2; provided, however, that any such
transfers shall take effect under Section 4.2 and not under this Section 2.4;
 
     (iv) any Exclusive Vishay Contingent Gain or any Shared Vishay Percentage
of a Shared Contingent Gain; and
 
     (v) any and all Assets that are expressly contemplated by this Agreement or
any Ancillary Agreement (or the Schedules hereto or thereto) as Assets to be
retained by Vishay or any other member of the Vishay Group.
 
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     Section 2.5 Liabilities.
 
          (a) For the purposes of this Agreement, “Assumed Liabilities” shall
mean (without duplication):
 
     (i) any and all Liabilities that are expressly contemplated by this
Agreement or any Ancillary Agreement (or the Schedules hereto or thereto) as
Liabilities to be assumed by VPG or any member of the VPG Group, and all
agreements, obligations and Liabilities of any member of the VPG Group under
this Agreement or any of the Ancillary Agreements;
 
     (ii) subject to the terms of Article VI, all Exclusive VPG Contingent
Liabilities and the Shared VPG Percentage of any Shared Contingent Liabilities;
 
     (iii) all Liabilities to the extent relating to, arising out of or
resulting from any terminated, divested or discontinued businesses and
operations of the MGF Business;
 
     (iv) all Liabilities reflected as liabilities or obligations of VPG or its
Subsidiaries in the VPG Group Balance Sheet, subject to any discharge of such
Liabilities subsequent to the date of the VPG Group Balance Sheet;
 
     (v) all Environmental Liabilities (other than the Environmental Liabilities
under Section 2.5(b)(v)), whether arising prior to, on or after the Distribution
Date, to the extent arising out of or resulting from the use by the MGF Business
of any property owned, operated, used or leased in the course of operating the
MGF Business at any time or any other property where the MGF Business contracted
or arranged for disposal at any time; provided that, notwithstanding such
general rule, Environmental Liabilities for the facilities set forth on Schedule
2.5(b)(v) shall be the obligation and Liability of Vishay as specified in such
Schedule 2.5(b)(v). With respect to Environmental Liabilities arising from any
facility that was jointly used by VPG and Vishay, except as may otherwise agreed
between the parties, if one party was the primary user of that property, that
party shall be responsible to administer any Action related thereto, including
providing any required defense, and the other party shall cooperate in the
administration and defense. Liabilities associated with any such Action shall be
shared equally by Vishay and VPG unless there is another allocation methodology
that more accurately and reasonably reflects the appropriate allocation of
responsibility as between Vishay and VPG (including, for the avoidance of doubt,
a reasonable estimation of relative fault or cause of the Liabilities);
 
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     (vi) all other Liabilities (other than Taxes, which are allocated as set
forth in the Tax Matters Agreement and employee-related Liabilities, which are
allocated as set forth in the Employee Matters Agreement), in each case to the
extent relating to, arising out of or resulting from:
 
          (A) the operation of the MGF Business, as conducted at any time prior
to, on or after the Distribution Date (including any Liability relating to,
arising out of or resulting from any act or failure to act by any director,
officer, employee, agent or representative (whether or not such act or failure
to act is or was within such Person’s authority)); or
 
          (B) any Separated Assets;
 
     in any such case whether arising prior to, on or after the Distribution
Date; and
 
     (vii) any inadvertent omission of transfer or assumption of Liability that,
had the parties given specific consideration to such Liability as of the date
hereof, would have otherwise been classified as an Assumed Liability.
 
     Notwithstanding the foregoing, the Assumed Liabilities shall not include
the Excluded Assumed Liabilities referred to in Section 2.5(b) below.
 
          (b) For the purposes of this Agreement, “Excluded Assumed Liabilities”
shall mean:
 
     (i) any and all Liabilities that are expressly contemplated by this
Agreement or any Ancillary Agreement (or the Schedules hereto or thereto) as
Liabilities to be retained or assumed by Vishay or any other member of the
Vishay Group, and all agreements and obligations of any member of the Vishay
Group under this Agreement or any of the Ancillary Agreements;
 
     (ii) any Liability which is expressly identified on Schedule 2.5(b)(ii);
 
     (iii) any and all liabilities relating to, arising out of or resulting from
any Excluded Assets;
 
     (iv) subject to the terms of Article VI, all Exclusive Vishay Contingent
Liabilities and the Shared Vishay Percentage of any Shared Contingent
Liabilities;
 
     (v) all Environmental Liabilities for the facilities set forth on Schedule
2.5(b)(v) and all Environmental Liabilities that are not Assumed Liabilities
under Section 2.5(a)(v); and
 
     (vi) any inadvertent transfer, conveyance or assumption of any Liability
that, had the parties given specific consideration to such Liability as of the
date hereof, would have otherwise been classified as an Excluded Assumed
Liability.
 
     Section 2.6 Excluded Assumed Liabilities. Vishay shall, or shall cause, as
applicable, its Subsidiaries, to be responsible for the Excluded Assumed
Liabilities regardless of when or where such Liabilities arose or arise,
regardless of where such Liabilities are asserted or determined or regardless of
whether asserted or determined prior to the Distribution Date.
 
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     Section 2.7 Deferred Separation Transactions.
 
          (a) Misallocated Assets. In the event that at any time or from time to
time (whether prior to, on or after the Distribution Date), any member of the
Vishay Group or any member of the VPG Group shall receive or otherwise possess
any Asset that is allocated to a member of the other Group pursuant to this
Agreement, any Ancillary Agreement or the Separation (including any remittances
from account debtors), Vishay shall or shall cause such member of the Vishay
Group or VPG shall or shall cause such member of the VPG Group, as the case may
be, to promptly transfer, or cause to be transferred, such Asset to the Person
so entitled thereto. Prior to any such transfer, the Person receiving or
possessing such Asset shall hold such Asset in trust for any such other Person.
Each party shall cooperate with the other party and use its commercially
reasonable efforts to set up procedures and notifications as are reasonably
necessary or advisable to effectuate the transfers contemplated by this Section
2.7.
 
          (b) Mistaken Assignments and Assumptions. If at anytime there exists
(i) Assets that either party discovers were, contrary to the agreements between
the parties, by mistake or unintentional omission, transferred to VPG or
retained by Vishay or (ii) Liabilities that either party discovers were,
contrary to the agreements between the parties, by mistake or unintentional
omission, assumed by VPG or not assumed by VPG or retained by the Vishay Group,
then the parties shall cooperate in good faith to effect the transfer or
retransfer of misallocated Assets, and/or the assumption or reassumption of
misallocated Liabilities, to or by the appropriate Person and shall not use the
determination that remedial actions need to be taken to alter the original
intent of the parties with respect to the Assets to be transferred to or
Liabilities to be assumed by VPG or retained by Vishay. Each party shall
reimburse the other or make other financial adjustments or other adjustments to
remedy any mistakes or omissions relating to any of the Assets transferred
hereby or any of the Liabilities assumed or retained hereby.
 
          (c) No Additional Consideration. For the avoidance of doubt, the
transfer or assumption of any Assets or Liabilities under this Section 2.7 shall
be effected without any additional consideration by either party.
 
     Section 2.8 Consents and Governmental Approvals.
 
          (a) Transfers not Consummated Prior to Separation Date. If the
transfer or assignment of any Asset intended to be transferred or assigned
hereunder is not consummated prior to or on the Distribution Date, whether as a
result of a requisite Consent or Governmental Approval or for any other reason,
then the Person retaining such Asset shall thereafter hold such Asset for the
use and benefit, insofar as reasonably possible, of the Person entitled thereto
until the consummation of the transfer or assignment thereof (or as otherwise
determined by Vishay and VPG, as applicable). In addition, the Person retaining
such Asset shall take such other actions as may be reasonably requested by the
Person to whom such Asset is to be transferred in order to place such Person,
insofar as reasonably possible, in the same position as if such Asset had been
transferred as contemplated hereby and so that all the benefits and burdens
relating to such Asset, including possession, use, risk of loss, potential for
gain, and dominion, control and command over such Asset, are to inure from and
after the Distribution Date to the Person to whom such Asset is to be
transferred. Notwithstanding the foregoing, any such Asset shall still be
considered a Separated Asset or Excluded Asset, as applicable.
 
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          (b) Expenses. The Person retaining an Asset due to the deferral of the
transfer and assignment of such Asset shall not be obligated, in connection with
the foregoing, to expend any money in connection with the maintenance of the
Asset or otherwise unless the necessary funds are advanced by the Person to whom
such Asset is to be transferred, other than reasonable out-of-pocket expenses,
attorneys’ fees and recording or similar fees, all of which shall be promptly
reimbursed by the Person to whom such Asset is to be transferred; provided,
however, that the Person retaining such Asset shall provide prompt notice to the
Person to whom such Asset is to be transferred of the amount of all such
expenses and fees.
 
          (c) No Additional Consideration. For the avoidance of doubt, the
transfer of any Assets under this Section 2.8 shall be effected without any
additional consideration by either party.
 
     Section 2.9 Novation of the Assumed Liabilities.
 
          (a) Reasonable Best Efforts. Each of Vishay and VPG, at the request of
the other and with the other’s reasonable best cooperation, shall use its
reasonable best efforts to obtain, or to cause to be obtained, any agreement,
instrument, Consent, substitution or amendment required to novate or assign all
rights and obligations under Contracts and other obligations or Liabilities of
any nature whatsoever that constitute Assumed Liabilities, or to obtain in
writing an unconditional release of all parties to such arrangements other than
any member of the VPG Group, so that, in any such case, VPG and the other
members of the VPG Group will be solely responsible for such Liabilities or, in
the case of Shared Contracts, to novate the rights and obligations under each
such Contract such that it is replaced with two separate Contracts, one of which
provides for the rights and obligations of a member or members of the Vishay
Group and the other of which provides for the rights and obligations of a member
or members of the VPG Group; provided, however, that neither the Vishay Group
nor the VPG Group shall be obligated to pay any consideration or assume any
additional obligation therefor to any third party from whom any such Consent,
substitution or amendment is requested. Each of Vishay and VPG, at the request
of the other and with the other’s reasonable best cooperation, shall use its
reasonable best efforts to obtain, or to cause to be obtained, any agreement,
instrument, Consent, substitution or amendment required to novate or assign all
rights and obligations under Contracts and other obligations or Liabilities of
any nature whatsoever that constitute Excluded Assumed Liabilities, or to obtain
in writing an unconditional release of all parties to such arrangements other
than any member of the Vishay Group, so that, in any such case, Vishay and the
other members of the Vishay Group will solely be responsible for such
Liabilities or, in the case of Shared Contracts, to novate the rights and
obligations under each such Contract such that it is replaced with two separate
Contracts, one of which provides for the rights and obligations of a member or
members of the Vishay Group and the other which provides for the rights and
obligations of a member or members of the VPG Group; provided, however, that
neither the Vishay Group nor the VPG Group shall be obligated to pay any
consideration or assume any additional obligation therefor to any third party
from whom any such Consent, substitution or amendment is requested.
 
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          (b) Inability to Obtain Novation. If Vishay or VPG is unable to
obtain, or to cause to be obtained, any such required agreement, instrument,
Consent, release, substitution or amendment with respect to any such Assumed
Liability or Excluded Assumed Liability, as applicable, the applicable member of
the Vishay Group or the VPG Group, as applicable, shall continue to be bound by
such Contracts and other obligations and Liabilities and, unless not permitted
by Applicable Law or the terms thereof (except to the extent expressly set forth
in this Agreement or any Ancillary Agreement), Vishay, with respect to any
Excluded Assumed Liability, and VPG, with respect to any Assumed Liability,
shall, as agent or subcontractor for the other or such other Person, as the case
may be, pay, perform and discharge fully, or cause to be paid, transferred or
discharged all the obligations or other Liabilities of any member of the other’s
Group thereunder from and after the Distribution Date or, in the case of a
Shared Contract, such obligations or other Liabilities as pertain to the member
or members of its own Group. Notwithstanding the foregoing, any such Liability
shall still be considered an Assumed Liability or Excluded Assumed Liability, as
applicable; provided, however, that neither Vishay nor VPG shall (nor shall
either permit any member of its respective Group to), amend, renew, change the
term of, modify the obligations under, or transfer to a third Person, any such
Contract or other obligation or other Liability without the written consent of
the other. Each of Vishay and VPG shall each use reasonable best efforts to
provide prompt notice to the other of any request they receive from the
counterparty to any Contract for any such amendment, renewal, change,
modification or transfer. Vishay, with respect to any Assumed Liability and VPG,
with respect to any Excluded Assumed Liability, shall, without further
consideration, pay and remit, or cause to be paid or remitted, to the other or
its appropriate Subsidiary promptly all money, rights and other consideration
received by it or any member of its Group in respect of such performance (unless
any such consideration is, with respect to consideration received by Vishay or
any member of the Vishay Group, an Excluded Asset, or, with respect to
consideration received by VPG or any member of the VPG Group, a Separated
Asset). If and when any such agreement, instrument, Consent, release,
substitution or amendment shall be obtained or such Contract or other
obligations and Liabilities shall otherwise become assignable or able to be
novated, Vishay, for any Assumed Liability, and VPG, for any Excluded Assumed
Liability, shall thereafter assign, or cause to be assigned, all of its rights,
obligations and other Liabilities thereunder or any rights or obligations of any
member of its respective Group to the other without payment of further
consideration and the other shall, without the payment of any further
consideration, assume such rights, obligations and Liabilities.
 
     Section 2.10 Documents Relating to Transfers of the Separated Assets and
Assumption of the Assumed Liabilities. In furtherance of the Separation and the
Distribution, including as contemplated by the Separation Transactions, (i)
Vishay shall execute and deliver, and shall cause its Subsidiaries to execute
and deliver, such bills of sale, stock powers, certificates of title,
assignments of Contracts and other instruments of transfer, conveyance and
assignment as and to the extent necessary to evidence the transfer, conveyance
and assignment of all of Vishay’s and its Subsidiaries’ right, title and
interest in and to the Separated Assets to VPG or its Subsidiaries and (ii) VPG
shall execute and deliver, and shall cause its Subsidiaries to execute and
deliver, to Vishay and its Subsidiaries such assumptions of Contracts and other
instruments of assumption as and to the extent necessary to evidence the valid
and effective assumption of the Assumed Liabilities by VPG. All conveyance and
assumption documents and instruments used to effectuate the Separation and the
Distribution shall be in form mutually satisfactory to Vishay and VPG.
 
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     Section 2.11 Termination of Agreements.
 
          (a) Except as set forth in Section 2.11(b), in furtherance of the
releases and other provisions of Section 5.1, VPG and each member of the VPG
Group, on the one hand, and Vishay and each member of the Vishay Group, on the
other hand, effective as of the Distribution Date, shall terminate, any and all
Contracts (including any intercompany accounts payable or accounts receivable
accrued as of the Distribution Date that are reflected in the books and records
of the parties or otherwise documented in writing in accordance with past
practices), whether or not in writing, between or among VPG and/or any member of
the VPG Group, on the one hand, and Vishay and/or any member of the Vishay
Group, on the other hand, effective as of the Distribution Date. No such
terminated Contracts (including any provision thereof which purports to survive
termination) shall be of any further force or effect after the Distribution
Date. Each party shall, at the reasonable request of any other party, take, or
cause to be taken, such other actions as may be necessary to effect the
foregoing.
 
          (b) The provisions of Section 2.11(a) shall not apply to any of the
following Contracts (or to any of the provisions thereof) in: (i) this Agreement
or the Ancillary Agreements (and each other agreement or instrument expressly
contemplated by this Agreement or any Ancillary Agreement to be entered into by
any of the parties or any of the members of their respective Groups); (ii) any
Contracts to which any Person other than the parties and their respective
Affiliates is a party (it being understood that to the extent that the rights
and obligations of the parties and the members of their respective Groups under
any such Contracts constitute Separated Assets or Assumed Liabilities, they
shall be assigned or assumed, as the case may be, pursuant to Section 2.3);
(iii) any Contracts to which any non-wholly owned Subsidiary of Vishay or VPG,
as the case may be, is a party (it being understood that directors’ qualifying
shares or similar interests will be disregarded for purposes of determining
whether a Subsidiary is wholly owned); (iv) intercompany Contracts or accounts
receivable entered into or generated in the ordinary course of business; or (v)
any other Contracts that this Agreement or any Ancillary Agreement expressly
contemplates will survive the Distribution Date.
 
     Section 2.12 Release of Security Interest. Upon VPG’s reasonable request,
Vishay shall use its reasonable best efforts to obtain from third parties the
release of any Security Interest granted by Vishay (or any member of its Group)
on any Separated Asset.
 
     Section 2.13 No Representation or Warranty.
 
          (a) No party to this Agreement, any Ancillary Agreement, or any other
agreement or document contemplated by this Agreement, any Ancillary Agreement or
otherwise, is making any representation as to, warranty of or covenant, express
or implied, with respect to: (a) any of the Separated Assets, the MGF Business,
the Excluded Assets or the Assumed Liabilities, including any warranty of
merchantability or fitness for a particular purpose, or any representation or
warranty regarding any Consents or Governmental Approvals required in connection
therewith or their transfer, (b) the value or freedom from Encumbrances of, or
any other matter concerning, any Separated Asset or Excluded Asset, or regarding
the absence of any defense or right of setoff or freedom from counterclaim with
respect to any claim or other Separated Asset or Excluded Asset, including any
account receivable of either party, or (c) the legal sufficiency of any
assignment, document or instrument delivered hereunder to convey title to any
Separated Asset or Excluded Asset upon the execution, delivery and filing hereof
or thereof.
 
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          (b) EXCEPT AS MAY EXPRESSLY BE SET FORTH HEREIN OR IN ANY ANCILLARY
AGREEMENT, ALL ASSETS TO BE TRANSFERRED AS SET FORTH HEREIN OR IN ANY ANCILLARY
AGREEMENT OR ANY OTHER AGREEMENT OR DOCUMENT CONTEMPLATED HEREBY OR THEREBY
SHALL BE TRANSFERRED “AS IS, WHERE IS” (AND, IN THE CASE OF ANY REAL PROPERTY,
BY MEANS OF A QUITCLAIM OR SIMILAR FORM DEED OR CONVEYANCE) AND THE TRANSFEREE
SHALL BEAR THE ECONOMIC AND LEGAL RISK THAT ANY CONVEYANCE SHALL PROVE TO BE
INSUFFICIENT TO VEST IN THE TRANSFEREE GOOD AND MARKETABLE TITLE, AND CLEAR OF
ANY SECURITY INTEREST OR ANY NECESSARY CONSENTS OR GOVERNMENTAL APPROVALS ARE
NOT OBTAINED OR THAT ANY REQUIREMENTS OF LAWS OR JUDGMENTS ARE NOT COMPLIED
WITH.
 
     Section 2.14 Use of Cash. From the date hereof until the Distribution Date,
Vishay shall be entitled to use, retain or otherwise dispose of all cash
generated by the MGF Business and the Separated Assets in accordance with the
ordinary course of operation of Vishay.
 
     Section 2.15 Plan of Reorganization. This Agreement shall constitute a plan
of reorganization for purposes of Section 368 of the Code.
 
     Section 2.16 Assets Transferred to Vishay. In connection with the
Separation, VPG shall, or shall cause the applicable members of the VPG Group
to, cause those assets identified on Schedule 2.16 (which are intended to be
Excluded Assets) to be contributed, assigned, transferred, conveyed and
delivered, directly or indirectly, to Vishay and one or more members of the
Vishay Group, as applicable, and Vishay shall, and shall cause the applicable
members of the Vishay Group to, accept from VPG and the applicable members of
the VPG Group all of their rights, title and interest in and to all such assets
identified on Schedule 2.16. The terms and provisions of Sections 2.7, 2.8,
2.10, 2.12, 2.13 and 4.2 as such terms and provisions relate to the
contribution, assignment, transfer, conveyance or delivery of assets from Vishay
or a member of the Vishay Group to VPG or a member of the VPG Group shall apply
to any contribution, assignment, transfer, conveyance or delivery of assets
contemplated by this Section 2.16, mutatis mutandis.
 
     Section 2.17 Net Cash.
 
          (a) No later than fifteen (15) Business Days following the
Distribution Date, VPG shall determine the VPG Net Cash as of the opening of
business on the Distribution Date (the “Actual VPG Net Cash”). As soon as
reasonably practicable, but in no event later than five (5) Business Days after
making such determination, VPG shall prepare and deliver to Vishay a calculation
of the VPG Net Cash, together with reasonably detailed supporting information
(the “VPG Net Cash Statement”).
 
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          (b) Thereafter, VPG will provide Vishay and its accountants with
access to the records and employees of VPG, to the extent reasonably related to
Vishay’s evaluation of the VPG Net Cash Statement, the calculation of the VPG
Net Cash or the resolution of any dispute with respect thereto. Within ten (10)
Business Days after Vishay’s receipt of the VPG Net Cash Statement, Vishay shall
notify VPG in writing as to whether Vishay agrees or disagrees with the VPG Net
Cash Statement, which notice, in the case of a disagreement, shall set forth in
reasonable detail the particulars of such disagreement. In the event that Vishay
does not provide a notice of disagreement within such ten (10) Business Day
period, then Vishay shall be deemed to have accepted the calculations and the
amounts set forth in the VPG Net Cash Statement delivered by VPG, which shall be
final, binding and conclusive for all purposes hereunder. If any notice of
disagreement is timely provided in accordance with this Section 2.17, VPG and
Vishay shall each use commercially reasonable efforts for a period of ten (10)
Business Days thereafter (or such longer period as they may mutually agree) to
resolve any disagreements with respect to the calculations in the VPG Net Cash
Statement. If, at the end of such period, VPG and Vishay are unable to resolve
any disagreements as to items in the VPG Net Cash Statement, then the Parties
shall engage KPMG LLP (the “Auditor”) to resolve any remaining disagreements.
The Auditor shall be charged with determining as promptly as practicable, but in
any event within thirty (30) days after the date on which such dispute is
referred to the Auditor, whether the Actual VPG Net Cash as set forth in the VPG
Net Cash Statement was prepared in accordance with this Agreement whether and to
what extent the Actual VPG Net Cash requires adjustment. The fees and expenses
of the Auditor shall be shared by VPG and Vishay in inverse proportion to the
relative amounts of the disputed amounts determined in favor of VPG and Vishay,
respectively. The determination of the Auditor shall be final, binding and
conclusive for all purposes hereunder. The date on which the Actual VPG Net Cash
is finally determined in accordance with this Section 2.17 is referred to as the
“Determination Date.”
 
          (c) If the Actual VPG Net Cash, as determined in accordance with this
Section 2.17, exceeds $71,500,000, VPG shall make a payment to Vishay in the
amount of the excess, which for all purposes shall be deemed a dividend to
Vishay from VPG made immediately prior to the Separation. If the Actual VPG Net
Cash is less than $58,500,000, Vishay shall make a payment to VPG in the amount
of the difference, which for all purposes shall be deemed a capital contribution
by Vishay to VPG made immediately prior to the Separation. Such payment by VPG
or Vishay, as the case may be, shall be made no later than five (5) Business
Days after the Determination Date by wire transfer of immediately available
funds.
 
ARTICLE III
 
THE DISTRIBUTION AND ACTIONS PENDING THE DISTRIBUTION
 
     Section 3.1 Transactions Prior to the Distribution. Subject to the
conditions specified in Section 3.2, Vishay and VPG shall use their reasonable
best efforts to consummate the Distribution. Such efforts shall include, without
limitation, those specified in this Section 3.1.
 
          (a) Separation Transactions and Capital Allocation Transactions.
Vishay and VPG shall cooperate, and shall use their reasonable best efforts, to
effect the Separation Transactions and the Capital Allocation Transactions on or
prior to the Distribution Date.
 
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          (b) Form 10 Registration Statement. Vishay and VPG shall cooperate to
cause the Form 10 Registration Statement heretofore filed with the Commission to
become and remain effective under Applicable Law, including, without limitation,
filing such amendments or supplements to the Form 10 Registration Statement as
may be required by the Commission or federal, state or foreign securities laws.
 
          (c) Information Statement; Other Materials. Vishay shall, as soon as
practicable after the Form 10 Registration Statement is declared effective under
the Exchange Act and the Vishay Board has approved the Distribution, cause the
Information Statement to be mailed to the Record Holders. Vishay and VPG shall
prepare and mail, on or prior to the Distribution Date, to the holders of Vishay
Stock, such other Information concerning VPG, the MGF Business, operations and
management, the Separation, the Distribution and such other matters as Vishay in
its sole and absolute discretion determines is necessary or desirable or as may
be required by Applicable Law.
 
          (d) Other Actions. Vishay and VPG shall take all other actions as
Vishay in its sole and absolute discretion determines are necessary or
appropriate under applicable federal or state securities or blue sky laws of the
United States (and any comparable laws under any foreign jurisdiction) in
connection with the Distribution.
 
          (e) NYSE Listing. VPG shall prepare, file and use its reasonable best
efforts to obtain approval of, an application for listing of VPG common stock on
The New York Stock Exchange (“NYSE”), subject to official notice of
distribution.
 
          (f) Accounting Matters. All prepaid items and reserves that have been
maintained by Vishay on a consolidated basis but related in part to Separated
Assets or Assumed Liabilities shall be allocated between Vishay and VPG as
determined by Vishay in its reasonable discretion.
 
          (g) Corporate Matters. Vishay and VPG shall take all necessary action
(i) to adopt the Amended and Restated Certificate of Incorporation and Amended
and Restated Bylaws of VPG in the form filed as exhibits to the Form 10
Registration Statement and (ii) to cause the Board of Directors of VPG to
consist of the persons identified in the Information Statement as the directors
of VPG to be in office following the Separation.
 
     Section 3.2 Conditions Precedent to Consummation of the Distribution. The
obligation of Vishay to effect the Distribution is subject to the satisfaction
or the waiver by Vishay, in its sole and absolute discretion, of each of the
following conditions:
 
          (a) Approval by Vishay’s Board. This Agreement and the transactions
contemplated hereby, including establishing the Record Date and the declaration
of the Distribution, shall have been duly taken and approved by the Vishay Board
in accordance with Applicable Law and the certificate of incorporation and
bylaws of Vishay.
 
          (b) Form 10 Registration Statement. The Form 10 Registration Statement
shall have been declared effective by the Commission, and there shall be no
stop-order in effect with respect thereto, and no proceeding for that purpose
shall have been instituted by the Commission.
 
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          (c) Other Actions. The actions and filings necessary or appropriate
under applicable federal and state securities laws and state blue sky laws of
the United States (and any comparable laws under any foreign jurisdictions) in
connection with the Distribution (including, if applicable, any actions and
filings relating to the Form 10 Registration Statement) and any other necessary
and applicable Consents shall have been taken, obtained and, where applicable,
have become effective or been accepted, each as the case may be.
 
          (d) NYSE Listing. VPG common stock to be distributed pursuant to the
Distribution shall have been approved for listing on NYSE, subject to official
notice of the Distribution.
 
          (e) No Legal Restraints. No Governmental Authority of competent
jurisdiction shall have, after the date of this Agreement, enacted, issued,
promulgated, enforced or entered any statute, rule, regulation, judgment,
decree, injunction or other order (whether temporary, preliminary or permanent),
which is in effect and prohibits or materially restricts or materially adversely
affects the consummation of the Separation or the Distribution or any of the
other transactions contemplated by this Agreement and the Ancillary Agreements.
 
          (f) Separation. The Separation shall have become effective in
accordance with the terms of this Agreement and the Separation Transactions and
the Capital Allocation Transactions.
 
          (g) Private Letter Ruling and Opinion of Tax Counsel. Vishay shall
have obtained a favorable private letter ruling from the IRS that the
Distribution is part of a reorganization within the meaning of Section
368(a)(1)(D) of the Code and that the Distribution generally will not give rise
to income or gain to Vishay or, pursuant to Section 355, its shareholders, and
such ruling shall continue in effect, and Vishay shall have received an opinion
of the law firm of Pepper Hamilton LLP to the same effect.
 
          (h) Approval from Israeli Tax Authorities. Vishay shall have received
a ruling from the Israeli taxing authorities that the Separation as it relates
to the transfer to the VPG Group of Israeli Companies held by the Vishay Group
will not give rise to a material amount of current Taxes under any Applicable
Law in Israel.
 
          (i) Consents and Approvals. Any and all Consents and Governmental
Approvals necessary to consummate the Separation and the Distribution shall have
been obtained and be in full force and effect, except where the failure to
obtain such consents or approvals would not have a material adverse effect on
either (A) the ability of the parties to complete the transactions contemplated
by this Agreement or any Ancillary Agreement or (B) the business, Assets,
Liabilities, condition or results of operations of VPG and its Subsidiaries, or
Vishay and its Subsidiaries, in each case, taken as a whole (such Consents and
Governmental Approvals, “Material Consents and Approvals”). As of the date of
this Agreement, other than the private letter ruling from the IRS and the ruling
from the Israeli taxing authorities listed separately above under Sections
3.2(g) and 3.2(h) respectively, the parties are not aware of any Material
Consents and Governmental Approvals.
 
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          (j) Ancillary Agreements; Performance of Obligations. Vishay shall
have received duly executed counterparts of each Ancillary Agreement from the
members of the VPG Group party thereto, and VPG (and the applicable members of
the VPG Group) shall have fully performed its or their obligations hereunder and
thereunder which are required to be performed prior to or at the time of the
Distribution.
 
          (k) Other Transactions. The parties shall have consummated any other
transactions in connection with the Distribution that are contemplated by the
Information Statement to be consummated prior to or at the time of the
Distribution and are not specifically referred to in this Agreement or the
Ancillary Agreements.
 
          (l) No Other Events. No other events or developments shall have
occurred that, in the judgment of the Vishay Board, in its sole and absolute
discretion, would result in the Separation or the Distribution having a material
adverse effect on Vishay, its stockholders, the Vishay Business or the MGF
Business.
 
     The foregoing conditions are for the sole benefit of Vishay and shall not
give rise to or create any duty on the part of Vishay or the Vishay Board to
waive or not to waive any such conditions or in any way limit Vishay’s right to
terminate this Agreement as set forth in Article IX or alter the consequences of
any such termination from those specified in Article IX. Any determination made
by Vishay prior to the Distribution concerning the satisfaction or waiver of any
or all of the conditions set forth in this Section 3.2 shall be conclusive.
 
     Section 3.3 Documents to be Delivered by Vishay. On or prior to the
Distribution Date, Vishay will deliver, or will cause its appropriate
Subsidiaries to deliver, to VPG all of the following:
 
          (a) In each case where Vishay or any other member of the Vishay Group
is a party to any Ancillary Agreement, a duly executed counterpart of such
Ancillary Agreement;
 
          (b) Resignations of each individual listed on Schedule 3.3(b), who is
a director and/or officer of any member of the VPG Group;
 
          (c) Any other agreements, documents and instruments necessary to
effectuate the Separation; and
 
          (d) Such other agreements, documents or instruments as the parties may
agree are necessary or desirable in order to achieve the purposes hereof.
 
     Section 3.4 Documents to be Delivered by VPG. On or prior to the
Distribution Date, VPG will deliver, or will cause its appropriate Subsidiaries
to deliver, to Vishay all of the following:
 
          (a) In each case where VPG or any other member of the VPG Group is a
party to any Ancillary Agreement, a duly executed counterpart of such Ancillary
Agreement;
 
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          (b) Resignations of each individual listed on Schedule 3.4(b) who is a
director and/or officer of any member of the Vishay Group; and
 
          (c) Any other agreements, documents and instruments necessary to
effectuate the Separation; and
 
          (d) Such other agreements, documents or instruments as the parties may
agree are necessary or desirable in order to achieve the purposes hereof.
 
     Section 3.5 Distribution.
 
          (a) Sole Discretion. Vishay shall, in its sole and absolute
discretion, determine whether or not to proceed with all or part of the
Distribution, determine the Distribution Date and determine whether to modify or
change the terms of the Distribution, including, without limitation, the form,
structure and terms of any transaction(s) to effect the Distribution (including
the Separation Transactions, the Capital Allocation Transactions and any other
transactions provided for in this Agreement) or the timing of and conditions to
the consummation of the Distribution. VPG shall cooperate with Vishay in all
respects to accomplish the Distribution and shall, at Vishay’s direction,
promptly take any and all actions reasonably necessary or desirable in Vishay’s
sole and absolute discretion to effect the Distribution.
 
          (b) Effective Time. The Distribution shall be effective at 12:01 a.m.,
Eastern Time, on the Distribution Date (the “Effective Time”).
 
          (c) Actions in Connection with Distribution. Unless Vishay has
previously determined not to proceed with the Separation, Vishay and VPG will
cause to be taken the following actions in connection with the Distribution:
 
     (i) VPG shall appoint a registrar and transfer agent (the “Registrar and
Transfer Agent”) for the purpose of recording the ownership and transfer of
record of the holders of VPG common stock and VPG Class B common stock. Such
record of ownership and transfer shall be maintained in book entry form only,
and no physical certificates evidencing the ownership of the VPG common stock or
VPG Class B common stock shall be issued.
 
     (ii) On or prior to the Distribution Date, VPG shall issue to Vishay and
Vishay shall deliver to Agent, in each case by appropriate entry on the books
and records of the Registrar and Transfer Agent, a sufficient number of shares
of VPG common stock and VPG Class B common stock for distribution on the
Distribution Date to the Record Holders of Vishay common stock and Vishay Class
B common stock, respectively.
 
     (iii) On the Distribution Date, (x) each Record Holder of Vishay common
stock will be entitled to receive in the Distribution a number of shares of VPG
common stock equal to the number of shares of Vishay common stock held by such
Record Holder on the Record Date multiplied by the distribution ratio to be
determined by the Vishay Board when it declares the Distribution (the “Common
Stock Distribution Ratio”), and (y) each Record Holder of Vishay Class B Common
Stock will be entitled to receive in the Distribution a number of shares of VPG
Class B Common Stock equal to the number of shares of Vishay Class B Common
Stock held by such Record Holder on the Record Date multiplied by the
distribution ratio to be determined by the Vishay Board when it declares the
Distribution (the “Class B Common Stock Distribution Ratio”). The Vishay Board
shall have the right to adjust the Common Stock Distribution Ratio and/or the
Class B Common Stock Distribution Ratio at any time prior to the Distribution.
 
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     (iv) As promptly as practicable after the Distribution Date, the Registrar
and Transfer Agent will send to each Record Holder, at the address of such
Record Holder as it appears on the books and records of the registrar and
transfer agent for the Vishay common stock and the Vishay Class B common stock,
as the case may be, an account statement showing the number of shares of VPG
common stock and VPG Class B common stock held by such Record Holder as of the
Distribution Date.
 
     (v) Vishay and VPG, as the case may be, will provide to the Agent and the
Registrar and Transfer Agent all authorizations and other documentation and any
Information required in order to complete the Distribution on the basis set
forth in this Section 3.5. No action will be necessary for any Record Holder of
Vishay to receive VPG common stock and/or VPG Class B Common Stock, as
applicable, or cash in lieu of fractional shares in the Distribution.
 
          (d) Fractional Shares. No fractional shares of VPG common stock or VPG
Class B common stock will be issued. Instead, Record Holders will receive cash
in lieu of any fractional shares, in accordance with the following procedures.
 
     (i) Vishay shall direct the Agent to determine the number of fractional
shares of VPG common stock and VPG Class B Common Stock allocable to each Record
Holder of Vishay common stock and Vishay Class B Common Stock, as applicable.
 
     (ii) The Agent shall aggregate all fraction shares of VPG common stock and
sell the whole shares obtained thereby in open market transactions or otherwise
as soon as practicable on or after the Distribution Date at then prevailing
trading prices and shall cause to be distributed to each Record Holder of Vishay
common stock, in lieu of any fractional share of VPG common stock, such Record
Holder’s ratable share of the proceeds of such sale. Solely for purposes of
computing fractional share interests pursuant to this Section 3.5(d)(ii), the
beneficial owner of Vishay Stock held of record in the name of a nominee in any
nominee account, if and to the extent Vishay is advised in writing of such
nominee relationship prior to the Distribution Date, shall be treated as the
Record Holder with respect to such shares.
 
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     (iii) Vishay shall cause to be delivered to the Agent cash in an amount
equal to the total of all fractional shares of VPG Class B common stock
multiplied by the amount of cash per share of VPG common stock distributed to
Record Holders of Vishay common stock in lieu of fractional shares. The Agent
shall cause to be distributed to each Record Holder of Vishay Class B common
stock, in lieu of any fractional share of VPG Class B common stock, such
holder’s ratable share of the cash provided by Vishay.
 
     (iv) All cash in lieu of fractional shares shall be delivered to the Record
Holders by check delivered to the address of such holder as it appears on the
books and records of the registrar and transfer agent for the Vishay common
stock and the Vishay Class B common stock, as the case may be, or by such other
means as the Record Holder and the Agent shall agree.
 
ARTICLE IV
 
ADDITIONAL COVENANTS, FURTHER ASSURANCES AND OTHER MATTERS
 
     Section 4.1 Provision of Corporate Records. Prior to or as promptly as
practicable after the Distribution Date, each of Vishay and VPG shall deliver or
make available to the other all corporate books and records of the other Group
in its possession, and complete and accurate copies of all relevant portions of
all corporate books and records of the Vishay Group relating directly and
primarily to the other’s Business (and, in the case of VPG, relating to the
Separated Assets or the Assumed Liabilities), including, in each case, all
active agreements, active litigation files, government filings and returns or
reports relating to Taxes for all open periods. Subject to Section 4.5 and
Section 4.6, each party may retain complete and accurate copies of such books
and records. From and after the Distribution Date, all such books, records and
copies shall be the property of the other party. The costs and expenses incurred
in the provision of records or other Information to a party shall be paid for by
the receiving party, or as the parties shall otherwise agree.
 
     Section 4.2 Further Assurance.
 
          (a) In addition to the actions specifically provided for elsewhere in
this Agreement (such as Section 2.7 and Section 2.11(a)), Vishay and VPG agree
to execute or cause to be executed by the appropriate parties and deliver, as
appropriate, such other agreements, instruments and other documents as may be
necessary or desirable in order to effect the purposes of this Agreement and the
Ancillary Agreements.
 
          (b) Without limiting the generality of the foregoing, at the request
of VPG, and without further consideration, Vishay will execute and deliver, and
will cause the applicable members of the Vishay Group to execute and deliver, to
VPG and the applicable members of the VPG Group such other instruments of
transfer, conveyance, assignment, substitution, confirmation or other documents
and take such action as VPG may reasonably deem necessary or desirable in order
to more effectively transfer, convey and assign to VPG and the applicable
members of the VPG Group and confirm VPG’s and the applicable members’ of the
VPG Group title to all of the assets, rights and other things of value
contemplated to be transferred to VPG and the applicable members of the VPG
Group pursuant to this Agreement, the Ancillary Agreements, and any documents
referred to herein or therein, to put VPG and the applicable members of the VPG
Group in actual possession and operating control thereof and to permit VPG and
the applicable members of the VPG Group to exercise all rights with respect
thereto (including, without limitation, rights under Contracts and other
arrangements as to which the consent of any third party to the transfer thereof
shall not have previously been obtained). Without limiting the generality of the
foregoing, at the request of Vishay and without further consideration, VPG will
execute and deliver, and will cause the applicable members of the VPG Group to
execute and deliver, to Vishay and the applicable members of the Vishay Group
all instruments, assumptions, novations, undertakings, substitutions or other
documents and take such other action as Vishay may reasonably deem necessary or
desirable in order to have VPG and the applicable members of the VPG Group fully
and unconditionally assume and discharge the liabilities contemplated to be
assumed by VPG and the applicable members of the VPG Group under this Agreement,
any Ancillary Agreement or any document in connection herewith or therewith and
to relieve the Vishay and the applicable members of the Vishay Group of any
liability or obligation with respect thereto and evidence the same to third
parties.
 
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          (c) Neither Vishay nor VPG shall be obligated, in connection with this
Section 4.2, to expend money other than reasonable out-of-pocket expenses,
attorneys’ fees and recording or similar fees, unless reimbursed by the other
party.
 
          (d) Furthermore, each party, at the request of the other party, shall
execute and deliver such other instruments and do and perform such other acts
and things as may be necessary or desirable for effecting completely the
consummation of the transactions contemplated hereby.
 
     Section 4.3 Agreement For Exchange Of Information.
 
          (a) Generally. Each of Vishay and VPG, on behalf of its respective
Group, agrees to provide, or cause to be provided, to the other party’s Group
and its authorized accountants, counsel and other designated representatives, at
any time after the Distribution Date, reasonable access during normal business
hours and as soon as reasonably practicable after written request therefor, (i)
all Information regularly provided by such respective Group to the other Group
prior to the Distribution Date, and (ii) any Information in the possession or
under the control of such respective Group that the requesting party reasonably
needs (A) to comply with reporting, disclosure, filing or other requirements
imposed on the requesting party (including under applicable securities and tax
laws) by a Governmental Authority having jurisdiction over the requesting party,
(B) for use in any other judicial, regulatory, administrative or other
proceeding or in order to satisfy audit, accounting, claims, regulatory,
litigation or other similar requirements, in each case, other than claims or
allegations that one party to this Agreement has against the other, (C) to
comply with its obligations under this Agreement or any Ancillary Agreement, (D)
to comply with reporting, filing and disclosure obligations, (E) for the
preparation of financial statements or completing an audit, (F) for use in
compensation, benefit or welfare plan administration or other bona fide business
purposes or (G) for the conduct of the ongoing businesses of Vishay or VPG, as
the case may be; provided, however, that in the event that either Vishay or VPG
determines that any such provision of or access to Information would be
commercially detrimental in any material respect, violate any Applicable Law or
agreement or waive any Privilege, the parties shall take all reasonable measures
to permit the compliance with such obligations in a manner that avoids any such
harm or consequence and shall comply with the applicable provisions of this
Agreement. Each of Vishay and VPG agree to make their respective personnel
available during normal business hours to discuss the Information exchanged
pursuant to this Section 4.3 provided, that such access does not interfere with
the day-to-day operations of the applicable party.
 
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          (b) Financial Information. Without limiting the generality of Section
4.3(a), until the end of the first full VPG fiscal year occurring after the
Distribution Date (and for a reasonable period of time afterwards as required
for each party to prepare consolidated financial statements or complete a
financial statement audit for the fiscal year during which the Distribution Date
occurs), each party shall use its commercially reasonable efforts, to cooperate
with the other party’s Information requests to enable the other party to meet
its timetable for dissemination (in accordance with applicable securities laws)
of its earnings releases and financial statements and to enable such other
party’s auditors to timely complete their audit of the annual financial
statements and review of the quarterly financial statements of such party.
 
          (c) Ownership of Information. Any Information owned by a party that is
provided to the other party pursuant to this Section 4.3 shall be deemed to
remain the property of the party that owned and provided such Information.
Unless specifically set forth herein, nothing contained in this Agreement shall
be construed as granting or conferring rights of license or ownership in any
Information owned by one party hereunder to the other party hereunder.
 
          (d) Record Retention. Except with respect to Information for which a
different retention policy is specified in an Ancillary Agreement, to facilitate
the exchange of Information contemplated by this Section 4.3 and other
provisions of this Agreement after the Distribution Date, each party agrees to,
and to use its reasonable best efforts to cause the members of its Group to,
retain all Information related to the MGF Business in their respective
possession or control on the Distribution Date in accordance with the record
retention and destruction policies of the applicable Business, as in effect
immediately prior to the Distribution Date or such other policies and procedures
as may reasonably be adopted by the applicable party after the Distribution Date
as provided herein. No party will destroy, or permit any member of its Group to
destroy, any Information which the other party may have the right to obtain
pursuant to this Agreement without first notifying the other party of the
proposed destruction and giving the other party the opportunity to take
possession of such Information prior to such destruction; provided, however,
that no party will destroy, or permit any member of its Group to destroy, any
Information required to be retained by Applicable Law.
 
          (e) Limitation of Liability. Each party will use its reasonable best
efforts to ensure that Information provided to the other party is accurate and
complete; provided, however, that, except as otherwise provided in any Ancillary
Agreement, in the absence of gross negligence or willful misconduct by the party
providing such Information, no party shall have any liability to any other party
in the event that any Information exchanged or provided pursuant to this Section
4.3 is found to be inaccurate. No party shall have any liability to the other
party if any Information is destroyed after commercially reasonable efforts by
such party to comply with the provision of this Section 4.3.
 
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          (f) Other Agreements Providing for Exchange of Information. The rights
and obligations granted under this Section 4.3 are subject to any specific
limitations, qualifications or additional provisions on the sharing, exchange or
confidential treatment of Information set forth in this Agreement and any
Ancillary Agreement.
 
          (g) Compensation for Providing Information. The party requesting
Information agrees to reimburse the other party for the reasonable out-of-pocket
costs and expenses, if any, of creating, gathering and copying such Information,
to the extent that such costs and expenses are incurred for the benefit of the
requesting party.
 
     Section 4.4 Production of Witnesses; Records; Cooperation.
 
          (a) Subject to Section 4.6, after the Distribution Date, except in the
case of any Action by one or more members of one Group against one or more
members of the other Group, each party shall use its reasonable best efforts to
make available to the other party, upon written request, the former, current and
future directors, officers, employees, other personnel and agents of the members
of its respective Group as witnesses and any books, records or other documents
within its control or which it otherwise has the ability to make available, to
the extent that any such Person (giving consideration to business demands of
such directors, officers, employees, other personnel and agents) or books,
records or other documents may reasonably be required in connection with any
Action in which the requesting party may from time to time be involved,
regardless of whether such Action is a matter with respect to which
indemnification may be sought hereunder. The requesting party shall reimburse
the other party for its reasonable out-of-pocket cost and expenses in connection
with requests made under this Section 4.4.
 
          (b) Without limiting the forgoing but subject to Section 4.6, the
parties shall cooperate and consult to the extent reasonably necessary with
respect to any Action, except in the case of an adversarial Action by one or
more members of one Group against one or more members of the other Group.
 
     Section 4.5 Confidentiality.
 
          (a) Subject to Section 4.6, which shall govern Privileged Information,
from and after the Distribution Date, Vishay and VPG shall hold and shall cause
each member of their respective Groups to hold, and shall each cause their
respective 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
Confidential Information of the other party’s Group; provided, that each party
may disclose, or may permit disclosure of, Confidential Information (i) to its
respective auditors, attorneys, financial advisors, bankers and other
appropriate consultants and advisors who have a need to know such Confidential
Information and are informed of such party’s obligation to hold such Information
confidential to the same extent as is applicable to the parties and in respect
of whose failure to comply with such obligations, VPG or Vishay, as the case may
be, will be responsible, (ii) if such party or any of the members of such
party’s respective Group is compelled to disclose any such Information by
judicial or administrative process or, in the opinion of independent legal
counsel, by other requirements of Applicable Law, (iii) if any such Information
is or becomes generally available to the public other than as a result of a
disclosure in violation of this Agreement or (iv) if such Information was or
becomes available to either VPG or Vishay or any member of their respective
Group on a non-confidential basis and from a source (other than a party to this
Agreement or any Affiliate, director, officer, employee, agent, consultant,
advisor and other representative of such party) that is not known after actual
inquiry to be bound by a confidentiality obligation. Notwithstanding the
foregoing, in the event that any demand or request for disclosure of
Confidential Information is made pursuant to clause (ii) above, Vishay or VPG,
as the case may be, shall promptly notify the other of the existence of such
request or demand and shall provide the other a reasonable opportunity to seek
an appropriate confidentiality agreement, protective order or other remedy at
the reasonable cost and expense of the disclosing party and which both parties
will cooperate in obtaining. In the event that such appropriate protective order
or other remedy is not obtained, the party whose Confidential Information is
required to be disclosed shall, or shall cause to be, furnished, only that
portion of the Confidential Information that is legally required to be
disclosed.
 
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          (b) Notwithstanding anything herein to the contrary, Vishay and the
members of its Group, on the one hand, and VPG and the members of its Group, on
the other hand, shall be deemed to have satisfied their obligations hereunder
with respect to Confidential Information if they exercise the same degree of
care (but no less than a reasonable degree of care) as they take to preserve
confidentiality for their own similar Information.
 
          (c) Nothing in this Agreement shall be construed to limit or prohibit
either party from independently creating or developing (or having created or
developed for it), or from acquiring from third parties, any Information similar
to or competitive with the Information contemplated by or embodied in the other
party’s Confidential Information, provided that in connection with such
creation, development or acquisition such party does not violate any of its
obligations under this Agreement, any Ancillary Agreement or any other agreement
with the other party. Notwithstanding the foregoing, neither party shall, nor
shall it assist others to, disassemble, decompile, reverse engineer, or
otherwise attempt to recreate, the other party’s Confidential Information.
 
     Section 4.6 Privileged Matters.
 
          (a) Vishay and VPG agree that their respective rights and obligations
to maintain, preserve, assert or waive any or all privileges belonging to either
party or the respective members of their respective Group with respect to the
Vishay Business or the MGF Business, including but not limited to the
attorney-client, work product privileges or any other applicable privileges
(individually, a “Privilege”), shall be governed by the provisions of this
Section 4.6. With respect to Privileged Information of Vishay, Vishay shall have
sole authority in perpetuity to determine whether to assert or waive any or all
Privileges, and VPG shall take no action (nor permit any member of its Group to
take action) without the prior written consent of Vishay that could result in
any waiver of any Privilege that could be asserted by Vishay or any member of
its Group under Applicable Law and this Agreement. With respect to Privileged
Information of VPG, VPG shall have sole authority in perpetuity to determine
whether to assert or waive any or all Privileges, and Vishay shall take no
action (nor permit any member of its Group to take action) without the prior
written consent of VPG that could result in any waiver of any Privilege that
could be asserted by VPG or any member of its Group under Applicable Law and
this Agreement. The rights and obligations created by this Section 4.6 shall
apply to all Information (“Privileged Information”) as to which Vishay or VPG or
their respective Groups would be entitled to assert or have asserted a Privilege
without regard to the effect, if any, of the Separation and the Distribution.
Privileged Information of Vishay and its Group includes but is not limited to
(w) any and all Information satisfying the criteria of the preceding sentence
regarding the Vishay Business and its Group (other than Information satisfying
the criteria of the preceding sentence relating to the MGF Business (“VPG
Information”)), whether or not such Information (other than VPG Information) is
in the possession of VPG or any member of its Group; and (x) all communications
subject to a Privilege between counsel for Vishay (including any Person who, at
the time of the communication, was an employee of Vishay or its Group in the
capacity of in-house counsel, regardless of whether such employee is or becomes
an employee of VPG or any member of its Group) and any Person who, at the time
of the communication, was an employee of Vishay, regardless of whether such
employee is or becomes an employee of VPG or any member of its Group. Privileged
Information of VPG and its Group includes but is not limited to (x) any and all
VPG Information, whether or not it is in the possession of Vishay or any member
of its Group; and (y) all communications subject to a Privilege occurring after
the Distribution between counsel for the MGF Business (including in-house
counsel and former in-house counsel who are employees of Vishay) and any Person
who, at the time of the communication, was an employee of VPG, any member of its
Group or the MGF Business regardless of whether such employee was, is or becomes
an employee of Vishay or any member of its Group.
 
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          (b) Upon receipt by Vishay or VPG, or any of the members of the
respective Groups, as the case may be, of any subpoena, discovery or other
request from any third party that actually or arguably calls for the production
or disclosure of Privileged Information of the other or if Vishay or VPG, or any
of members of their respective Groups, as the case may be, obtains knowledge
that any current or former employee of Vishay or VPG, as the case may be,
receives any subpoena, discovery or other request from any third party that
actually or arguably calls for the production or disclosure of Privileged
Information of the other, Vishay or VPG, as the case may be, shall promptly
notify the other of the existence of the request and shall provide the other a
reasonable opportunity to review the Information and to assert any rights it may
have under this Section 4.6 or otherwise to prevent the production or disclosure
of Privileged Information. Vishay or VPG, as the case may be, will not, and will
cause the members of their respective Groups to not, produce or disclose to any
third party any of the other’s Privileged Information under this Section 4.6
unless (i) the non-disclosing party has provided its express written consent to
such production or disclosure or (ii) a court of competent jurisdiction has
entered an order not subject to interlocutory appeal or review (or for which the
period for appeal or review has lapsed) finding that the Information is not
entitled to protection from disclosure under any applicable privilege, doctrine
or rule, in which case, such Information shall be subject to Section 4.5.
 
          (c) Vishay’s transfer of books and records pertaining to the MGF
Business and other Information to VPG, Vishay’s agreement to permit VPG to
obtain Information existing prior to the Distribution, VPG’s transfer of books
and records pertaining to the Vishay Business, if any, and other Information to
Vishay and VPG’s agreement to permit Vishay to obtain Information existing prior
to the Distribution are made in reliance on Vishay’s and VPG’s respective
agreements, as set forth in Section 4.5 and this Section 4.6, to maintain the
confidentiality of such Information and to take the steps provided herein for
the preservation of all Privileges that may belong to or be asserted by Vishay
or VPG, as the case may be. The access to Information, witnesses and individuals
being granted pursuant to Sections 4.3 and 4.4 and the disclosure to VPG and
Vishay of Privileged Information relating to the MGF Business or the Vishay
Business pursuant to this Agreement in connection with the Separation and
Distribution shall not be asserted by Vishay or VPG to constitute, or otherwise
deemed, a waiver of any Privilege that has been or may be asserted under this
Section 4.6 or otherwise. Nothing in this Agreement shall operate to reduce,
minimize or condition the rights granted to Vishay and VPG in, or the
obligations imposed upon Vishay and VPG by, this Section 4.6.
 
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     Section 4.7 Cooperation with Respect to Know-how. Neither party shall
knowingly utilize or incorporate into its products or services the confidential
know-how or other proprietary technical information of the other party without
the express, prior written consent of the other party. The parties agree that if
a party reasonably believes that the other party has or may have an interest or
expectation of ownership in know-how or other technical information that has
come to the attention of the personnel of the first party and that the first
party proposes to utilize in its products, services or other aspects of its
business, the first party shall bring this to the attention of the other party.
Thereafter, the parties shall discuss in good faith the use of such know-how or
other technical information to determine whether such information is the
exclusive property of one of the parties or if it is information in which both
parties have an interest or expectation of ownership. If it is determined that
the know-how or other technical information is the exclusive property of one of
the parties, the other party may request a license to utilize such information
for development of or incorporation into its products and services or in other
aspects of its business. In such case, the other party shall in good faith
consider the request for a license, including the financial arrangements and
other terms that the first party proposes for such a license. Nothing, however,
shall require a party to enter into such a license or to act against its
commercial interests as determined by such party. For the purpose of the
discussions contemplated by this Section 4.7, each party shall at all times
designate by notice to the other party one or more individuals at a level equal
to or above divisional P&L leader who shall be available to engage in such
discussions at the request of the other party.
 
     Section 4.8 VPG Exchangeable Notes and VPG Warrants; Registration. VPG
agrees to take the following actions:
 
          (a) Issue notes exchangeable for shares of VPG common stock (the “VPG
Exchangeable Notes”) to such Persons, in such amounts, upon such terms and at
such time as required by that certain Put and Call Agreement dated as of
December 13, 2002, by and between Vishay and each of the holders of the Notes
due December 31, 2102 issued by Vishay.
 
          (b) Issue warrants to acquire VPG common stock (the “VPG Warrants”) to
such Persons, in such amounts, upon such terms and at such time as required by
that certain Warrant Agreement dated as of December 13, 2002, by and between
Vishay and American Stock Transfer and Trust Company.
 
          (c) Register the shares of VPG common stock issuable upon (i) exchange
of the VPG Exchangeable Notes or (ii) exercise of the VPG Warrants, on a resale
registration statement on such terms and within such time periods as required by
that certain Securities Investment and Registration Rights Agreement dated as of
December 13, 2002, by and among Vishay, Phoenix Acquisition Company S.a.r.l.,
Phoenix Bermuda, LP and certain other persons as set forth therein.
 
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     Section 4.9 Tax Matters. All matters relating to Taxes shall be governed
exclusively by the Tax Matters Agreement, except as may be expressly stated
herein or therein. In the event of any inconsistency with respect to such
matters between the Tax Matters Agreement and this Agreement or any other
Ancillary Agreement, the Tax Matters Agreement shall govern to the extent of the
inconsistency.
 
     Section 4.10 Employee Matters. All matters relating to or arising out of
any employee benefit, compensation or welfare arrangement in respect of any
present and former employee of the Vishay Group or the VPG Group shall be
governed by the Employee Matters Agreement. In the event of any inconsistency
with respect to such matters between the Employee Matters Agreement and this
Agreement or any Ancillary Agreement, the Employee Matters Agreement shall
govern to the extent of the inconsistency; provided, however, that
notwithstanding anything to the contrary herein or in the Employee Matters
Agreement, for the period from and after the Distribution Date, Vishay shall
have no responsibility for the compensation or benefits of any of the executives
or other employees of VPG, including those who were employed by Vishay prior to
the Separation.
 
     Section 4.11 Intellectual Property. All matters relating to the ownership
and right to use Intellectual Property shall be governed exclusively by the
License Agreements, as applicable, except as may be expressly stated herein or
therein. In the event of any inconsistency with respect to such matters between
a particular License Agreement and this Agreement or any Ancillary Agreement,
such particular License Agreement shall govern to the extent of the
inconsistency.
 
     Section 4.12 Services Support. All matters relating to the provision of
support and other services by the Vishay Group to the VPG Group after the
Effective Time, covered by the Transition Services Agreement, shall be governed
exclusively by the Transition Services Agreement, except as may be expressly
stated herein or therein. In the event of any inconsistency with respect to such
matters between the Transition Services Agreement and this Agreement or any
other Ancillary Agreement, the Transition Services Agreement shall govern to the
extent of the inconsistency.
 
     Section 4.13 Real Property. All matters relating to real property to be
leased, subleased, occupied, or shared either Group after the Effective Time
shall be governed by the Lease Agreements, except as may be expressly stated
herein or therein. In the event of any inconsistency with respect to such
matters between a particular Lease Agreements and this Agreement or any
Ancillary Agreement, such particular Lease Agreement shall govern to the extent
of the inconsistency.
 
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ARTICLE V
 
SURVIVAL AND INDEMNIFICATION
 
     Section 5.1 Mutual Release.
 
          (a) Effective as of the Distribution Date and except as otherwise
specifically set forth in the Ancillary Agreements, each of Vishay, on behalf of
itself and each member of the Vishay Group, on the one hand, and VPG, on behalf
of itself and each member of the VPG Group, on the other hand, hereby
unequivocally, unconditionally and irrevocably releases and forever discharges
the other party and the members of such party’s Group, and its and their
respective current and former directors, officers, managers or other Persons
acting in a similar capacity, agents, record and beneficial security holders
(including trustees and beneficiaries of trusts holding such securities),
advisors, accountants, attorneys and other representatives (in each case, in
their respective capacities as such) and their respective heirs, executors,
administrators, successors and assigns, of and from, all Liabilities whatsoever
of every name and nature, whether at law or in equity (including any right of
contribution), whether arising under any Contract, by operation of law or
otherwise, existing or arising from any acts or events occurring or failing to
occur or alleged to have occurred or to have failed to occur or any conditions
existing or alleged to have existed on or before the Distribution Date, whether
or not known on the Distribution Date, whether fixed or contingent, and whether
or not concealed or hidden, including in connection with the transactions and
all other activities to implement the Separation and the Distributions.
 
          (b) Nothing contained in Section 5.1(a) shall impair any right of any
party (or any of the respective members of such party’s Group) to enforce this
Agreement, any Ancillary Agreement or any other Contracts that are contemplated
by Section 2.11(b) or the applicable Schedules thereto, nor shall anything
contained in those sections be interpreted as terminating as of the Distribution
Date any rights under any such Contracts. For purposes of clarification, nothing
contained in Section 5.1(a) shall release any Person from:
 
     (i) any Liability provided in or resulting from any agreement among any
member of the Vishay Group or the VPG Group that is specified in Section 2.11(b)
or the applicable Schedules thereto as not to terminate as of the Distribution
Date, or any other Liability specified in such Section 2.11(b) as not to
terminate as of the Distribution Date;
 
     (ii) any Liability, contingent or otherwise, assumed, transferred, assigned
or allocated to the Group of which such Person is a member in accordance with,
or any other Liability of any member of any Group under, this Agreement or any
Ancillary Agreement;
 
     (iii) any Liability for the sale, lease, construction or receipt of goods,
property or services purchased, obtained or used in the ordinary course of
business by a member of one Group from a member of any other Group prior to the
Distribution Date;
 
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     (iv) any Liability for unpaid amounts for products or services or refunds
owing on products or services due on a value-received basis for work done by a
member of one Group at the request or on behalf of a member of another Group;
 
     (v) any Liability that the parties may have with respect to indemnification
or contribution pursuant to this Agreement for claims brought against the
parties by third Persons, which Liability shall be governed by the provisions of
this Article V and Article VI and, if applicable, the appropriate provisions of
the Ancillary Agreements; or
 
     (vi) any Liability the release of which would result in the release of any
Person other than a Person released pursuant to this Section 5.1.
 
     In addition, nothing contained in Section 5.1(a) shall release any party
from honoring its existing obligations to indemnify any director, officer or
employee of either Group who was a director, officer or employee of such party
on or prior to the Distribution Date, to the extent that such director, officer
or employee becomes a named defendant in any litigation involving such party and
was entitled to such indemnification pursuant to then existing obligations.
 
          (c) Neither Vishay nor VPG shall make, nor shall either permit any
other member of its Group to make, any claim or demand, or commence any Action
asserting any claim or demand, including any claim of contribution or any
indemnification, against the other or any member of the other Group or any other
Person released pursuant to Section 5.1(a), with respect to any Liabilities
released pursuant to Section 5.1(a).
 
          (d) It is the intent of Vishay and VPG by virtue of the provisions of
this Section 5.1 to provide for a full and complete release and discharge of all
Liabilities existing or arising from all acts and events occurring or failing to
occur or alleged to have occurred or to have failed to occur and all conditions
existing or alleged to have existed on or before the Distribution Date, between
or among Vishay or any member of the Vishay Group, on the one hand, and VPG or
any member of the VPG Group, on the other hand (including any contractual
agreements or arrangements existing or alleged to exist between or among any
such members on or before the Distribution Date), except as expressly set forth
in Section 5.1(b). At any time, at the request of any other party, each party
shall cause each member of its respective Group to execute and deliver releases
reflecting the provisions hereof.
 
     Section 5.2 Indemnification by Vishay. Vishay shall indemnify, defend and
hold harmless VPG, each member of the VPG Group and each of their respective
current and former directors, officers and employees, and each of the heirs,
executors, successors and assigns of any of the foregoing (collectively, the
“VPG Indemnified Parties”), from and against any and all Liabilities of VPG
Indemnified Parties relating to, arising out of or resulting from any of the
following items (without duplication):
 
          (a) the failure of Vishay or any other member of the Vishay Group or
any other Person to pay, perform or otherwise promptly discharge any Liabilities
of the Vishay Group other than the Assumed Liabilities whether prior to or after
the date hereof;
 
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          (b) the conduct of the Vishay Business;
 
          (c) any Liability of the Vishay Group (including the Excluded Assumed
Liabilities) other than the Assumed Liabilities;
 
          (d) any Environmental Liabilities under Section 2.5(b)(v);
 
          (e) any breach of, or failure to perform or comply with, any covenant,
undertaking or obligation of, this Agreement or any Ancillary Agreements, by
Vishay or any member of the Vishay Group; and
 
          (f) any untrue statement or alleged untrue statement of material fact
or omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent relating to Vishay Group contained in the Form 10 Registration
Statement, the Information Statement or any other registration statements filed
by VPG or Vishay in connection with the Distribution.
 
     Section 5.3 Indemnification by VPG. VPG shall indemnify defend and hold
harmless Vishay, each member of the Vishay Group and each of their respective
current and former directors, officers and employees, and each of the heirs,
executors, successors and assigns of any of the foregoing (collectively, the
“Vishay Indemnified Parties”) from and against any and all Liabilities of the
Vishay Indemnified Parties relating to, arising out of or resulting from any of
the following items (without duplication):
 
          (a) the failure of VPG or any other member of the VPG Group or any
other Person to pay, perform or otherwise promptly discharge any Assumed
Liabilities in accordance with their respective terms, whether prior to or after
the date hereof;
 
          (b) the conduct of the MGF Business;
 
          (c) any Assumed Liability;
 
          (d) any Environmental Liabilities under Section 2.5(a)(v);
 
          (e) any breach of, or failure to perform or comply with, any covenant,
undertaking or obligation of, this Agreement or any Ancillary Agreements, by VPG
or any member of the VPG Group; and
 
          (f) any untrue statement or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent relating to the VPG Group contained in the Form 10
Registration Statement, the Information Statement or any other registration
statements filed by VPG in connection with the Distribution.
 
     Section 5.4 Tax Indemnification. Notwithstanding anything herein to the
contrary, indemnification for matters subject to the Tax Matters Agreement shall
be governed by the terms, provisions and procedures of the Tax Matters Agreement
and not by this Article V.
 
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     Section 5.5 Indemnification Obligations Net of Insurance Proceeds and Other
Amounts.
 
          (a) The parties intend that any Liability subject to indemnification
or reimbursement pursuant to this Article V or Article VI will be net of
Insurance Proceeds that actually reduce the amount of the Liability.
Accordingly, the amount which any party (an “Indemnifying Party”) is required to
pay to any Person entitled to indemnification hereunder (an “Indemnified Party”)
will be reduced by any Insurance Proceeds theretofore actually received,
realized or recovered by or on behalf of the Indemnified Party in reduction of
the related Liability. If an Indemnified Party receives a payment (an “Indemnity
Payment”) required by this Agreement from an Indemnifying Party in respect of
any Liability and subsequently receives Insurance Proceeds that actually reduce
the amount of the Liability, then the Indemnified Party will pay to the
Indemnifying Party an amount equal to the excess of the Indemnity Payment
received over the amount of the Indemnity Payment that would have been due if
the Insurance Proceeds had been received, realized or recovered before the
Indemnity Payment was made.
 
          (b) In the case of any Shared Contingent Liability, any Insurance
Proceeds actually received, realized or recovered by any party in respect of the
Shared Contingent Liability will be shared among the parties in such manner as
may be necessary so that the obligations of the parties for such Shared
Contingent Liability, net of such Insurance Proceeds, will remain in proportion
to their respective Shared Percentages, regardless of which party or parties may
actually receive, realize or recover such Insurance Proceeds.
 
          (c) An insurer who would otherwise be obligated to pay any claim shall
not be relieved of the responsibility with respect thereto or, solely by virtue
of the indemnification provisions hereof, have any subrogation rights with
respect thereto, it being expressly understood and agreed that no insurer or any
other third party shall be entitled to a “wind-fall” ( i.e., a benefit they
would not be entitled to receive in the absence of the indemnification
provisions) by virtue of the indemnification provisions hereof. Nothing
contained in this Agreement or in any Ancillary Agreement shall obligate any
member of any Group to seek to collect or recover any Insurance Proceeds;
provided, that such member is capable of fulfilling and meeting any of its
obligations as an Indemnifying Party under this Agreement (including, but not
limited to the ability to make a full payment on any indemnification
obligation).
 
     Section 5.6 Procedures for Indemnification of Third Party Claims.
 
          (a) If an Indemnified Party shall receive notice or otherwise learn of
the assertion by a Person (including any Governmental Authority) who is not a
member of the Vishay Group or the VPG Group of any claim or of the commencement
by any such Person of any Action (collectively, a “Third Party Claim”) with
respect to which an Indemnifying Party may be obligated to provide
indemnification to such Indemnified Party pursuant to Section 5.2 or Section 5.3
or any other section of this Agreement or any Ancillary Agreement, such
Indemnified Party shall give such Indemnifying Party written notice thereof
within twenty (20) days after becoming aware of such Third Party Claim. Any such
notice shall describe the Third Party Claim in reasonable detail. If any Person
shall receive notice or otherwise learn of the assertion of a Third Party Claim
which may reasonably be determined to be a Shared Contingent Liability, such
Person shall give the other party to this Agreement written notice thereof
within twenty (20) days after becoming aware of such Third Party Claim. Any such
notice shall describe the Third Party Claim in reasonable detail.
Notwithstanding the foregoing, the failure of any Indemnified Party or other
Person to give notice as provided in this Section 5.6(a) shall not relieve the
related Indemnifying Party of its obligations under this Article V, except to
the extent that such Indemnifying Party is actually prejudiced by such failure
to give notice.
 
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          (b) If the Indemnifying Party receiving any notice pursuant to Section
5.6(a) or the Indemnified Party believes that the Third Party Claim is or may be
a Shared Contingent Liability, such party may make a Determination Request with
respect thereto. Vishay shall be entitled (but not obligated) to assume the
defense of such Third Party Claim as if it were the Indemnifying Party hereunder
until a determination on whether such Third Party Claim is a Shared Contingent
Liability. In any such event, Vishay shall be entitled to reimbursement of all
the costs and expenses of such defense once a final determination or
acknowledgment is made as to the status of the Third Party Claim; provided,
that, if such Third Party Claim is determined to be a Shared Contingent
Liability, such costs and expenses shall be shared as provided in Section
5.6(c). If it is determined by the parties or the Contingent Claim Committee
that the Third Party Claim is a Shared Contingent Liability, the Indemnifying
Party determined to have a majority of the Shared Percentage of such Shared
Contingent Liability shall assume the defense of such Third Party Claim;
provided, that such Indemnifying Party is solvent. If the Indemnifying Party
with a majority of the Shared Contingent Liability is insolvent, the
Indemnifying Party with less than a majority of the Shared Contingent Liability
shall be entitled (but not obligated) to assume the defense of such Third Party
Claim.
 
          (c) The costs and expenses of assuming the defense of any Third Party
Claim that is a Shared Contingent Liability (subject to Section 5.6(b)), and/or
seeking to settle or compromise (subject to Section 5.6(g)) shall be included in
the calculation of the amount of the applicable Shared Contingent Liability in
determining the reimbursement obligations of the other parties with respect
thereto pursuant to Section 6.3. Any Indemnified Party in respect of a Shared
Contingent Liability shall have the right to employ separate counsel and to
participate in (but not control) the defense, compromise, or settlement thereof,
but all fees and expenses of such counsel shall be the expense of such
Indemnified Party.
 
          (d) Other than in the case of a Shared Contingent Liability, an
Indemnifying Party may elect to defend (and, unless the Indemnifying Party has
specified any reservations or exceptions, to seek to settle or compromise), at
such Indemnifying Party’s own expense and by such Indemnifying Party’s own
counsel, any Third Party Claim. Within thirty (30) days after the receipt of
notice from an Indemnified Party in accordance with Section 5.6(a) (or sooner,
if the nature of such Third Party Claim so requires), the Indemnifying Party
shall notify the Indemnified Party of its election whether the Indemnifying
Party will assume responsibility for defending such Third Party Claim, which
election shall specify any reservations or exceptions. After notice from an
Indemnifying Party to an Indemnified Party of its election to assume the defense
of a Third Party Claim, such Indemnified Party shall have the right to employ
separate counsel and to participate in (but not control) the defense,
compromise, or settlement thereof, but the fees and expenses of such counsel
shall be the expense of such Indemnified Party.
 
          (e) Other than in the case of a Shared Contingent Liability, if an
Indemnifying Party elects not to assume responsibility for defending a Third
Party Claim, or fails to notify an Indemnified Party of its election as provided
in Section 5.6(d), such Indemnified Party may defend such Third Party Claim at
the cost and expense of the Indemnifying Party.
 
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          (f) Unless the Indemnifying Party has failed to assume the defense of
the Third Party Claim in accordance with the terms of this Agreement, no
Indemnified Party may settle or compromise any Third Party Claim that is not a
Shared Contingent Liability without the consent of the Indemnifying Party. No
Indemnified Party may settle or compromise any Third Party Claim that is a
Shared Contingent Liability without the consent of the Indemnifying Party that
is entitled to or has assumed the defense of such Third Party Claim.
 
          (g) In the case of a Third Party Claim that is not a Shared Contingent
Liability, no Indemnifying Party shall consent to entry of any judgment or enter
into any settlement of the Third Party Claim without the consent of the
Indemnified Party if the effect thereof is to permit any injunction, declaratory
judgment, other order or other nonmonetary relief to be entered, directly or
indirectly against any Indemnified Party. In the case of a Third Party Claim
that is a Shared Contingent Liability, the Indemnifying Party that has assumed
the defense of such Third Party Claim shall not consent to entry of any judgment
or enter into any settlement of the Third Party Claim without the consent of the
Indemnified Party if the effect thereof is to permit any injunction, declaratory
judgment, other order or other nonmonetary relief to be entered, directly or
indirectly, against any Indemnified Party; provided, however, the Indemnifying
Party shall not need to obtain the consent of the Indemnified Party if the
Indemnified Party is insolvent.
 
     Section 5.7 Procedures for Indemnification of Direct Claims. Any claim for
indemnification made directly by the Indemnified Party against the Indemnifying
Party that does not result from a Third Party Claim shall be asserted by written
notice from the Indemnified Party to the Indemnifying Party specifically
claiming indemnification hereunder. Such Indemnifying Party shall have a period
of forty-five (45) days after the receipt of such notice within which to respond
thereto. If such Indemnifying Party does not respond within such forty-five (45)
day period, such Indemnifying Party shall be deemed to have accepted
responsibility to make payment and shall have no further right to contest the
validity of such claim. If such Indemnifying Party does respond within such
forty-five (45) day period and rejects such claim in whole or in part, such
Indemnified Party shall be free to pursue resolution as provided in Article
VIII.
 
     Section 5.8 Payments. The Indemnifying Party shall pay all amounts payable
pursuant to this Article V by wire transfer of immediately available funds,
promptly following receipt from an Indemnified Party of a statement therefor,
together with all accompanying reasonably detailed backup documentation, for a
Liability that is the subject of indemnification hereunder, unless the
Indemnifying Party in good faith disputes the Liability, in which event it shall
so notify the Indemnified Party. In any event, the Indemnifying Party shall pay
to the Indemnified Party, by wire transfer of immediately available funds, the
amount of any Liability for which it is liable hereunder no later than ten (10)
Business Days following any final determination of such Liability and the
Indemnifying Party’s liability therefor. A “final determination” shall exist
when (a) the parties to the dispute have reached an agreement in writing, (b) a
court of competent jurisdiction shall have entered a final and non-appealable
order
 
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or judgment or (c) an arbitration or like panel shall have rendered a final
non-appealable determination with respect to disputes the parties have agreed to
submit thereto.
 
     Section 5.9 Contribution. If the indemnification provided for in this
Article V shall, for any reason, be unavailable or insufficient to hold harmless
an Indemnified Party hereunder in respect of any Liability, then the
Indemnifying Party shall, in lieu of indemnifying such Indemnified Party,
contribute to the amount paid or payable by such Indemnified Party as a result
of such Liability, in such proportion as shall be sufficient to place the
Indemnified Party in the same position as if such Indemnified Party were
indemnified hereunder, the parties intending that their respective contributions
hereunder be as close as possible to the indemnification under Section 5.2 and
Section 5.3. If the contribution provided for in the previous sentence shall,
for any reason, be unavailable or insufficient to put the Indemnified Party in
the same position as if it were indemnified under Section 5.2 or Section 5.3, as
the case may be, then the Indemnifying Party shall contribute to the amount paid
or payable by such Indemnified Party as a result of such Liability, in such
proportion as shall be appropriate to reflect the relative benefits received by
and the relative fault of the Indemnifying Party on the one hand and the
Indemnified Party on the other hand with respect to the matter giving rise to
the Liability.
 
     Section 5.10 Remedies Cumulative. The rights and remedies provided in this
Article V shall be cumulative and, subject to the provisions of Article VIII,
shall not preclude assertion by any Indemnified Party of any other rights or the
seeking of any and all other remedies against any Indemnifying Party.
 
     Section 5.11 Survival of Indemnities. The rights and obligations of each of
Vishay and VPG and their respective Indemnified Parties under this Article V
shall survive the distribution, sale or other transfer by any party of any
Assets or the delegation or assignment by it of any Liabilities.
 
ARTICLE VI
 
CONTINGENT GAINS AND CONTINGENT LIABILITIES
 
     Section 6.1 Contingent Gains.
 
          (a) Each of Vishay and VPG shall have the sole and exclusive right to
any benefit received with respect to any Exclusive Vishay Contingent Gain and
any Exclusive VPG Contingent Gain, respectively. Each of Vishay and VPG shall
have the sole and exclusive authority to commence, prosecute, settle, manage,
control, conduct, waive, forego, release, discharge, forgive and otherwise
determine all matters whatsoever with respect to any such Exclusive Vishay
Contingent Gain or Exclusive VPG Contingent Gain, as the case may be.
 
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          (b) Any benefit that may be received from any Shared Contingent Gain
shall be shared between Vishay and VPG in proportion to the Shared Vishay
Percentage and the Shared VPG Percentage, respectively, and shall be paid in
accordance with Section 6.4. If it is determined by the parties or the
Contingent Claim Committee that a Contingent Gain is a Shared Contingent Gain,
the party determined to have a majority of the Shared Percentage of such Shared
Contingent Gain shall have the sole and exclusive authority to commence,
prosecute, settle, manage, control, conduct, waive, forgo, release, discharge,
forgive and otherwise determine all matters whatsoever with respect to such
Shared Contingent Gain. The party with a minority interest in such Shared
Contingent Gain shall not take, or permit any member of its Group to take, any
action (including commencing any Action) that would interfere with such rights
and powers of the other party. The party with a majority of the Shared
Percentage of such Shared Contingent Gain shall use its reasonable best efforts
to notify the other party in the event that it commences an Action with respect
to a Shared Contingent Gain; provided, that the failure to provide such notice
shall not give rise to any rights on the part of the other party against such
party or affect any other provision of this Section 6.1. The party with a
majority of the Shared Percentage of such Shared Contingent Gain may elect not
to pursue any Shared Contingent Gain for any reason whatsoever (including a
different assessment of the merits of any Action, claim or right than the other
party or any business reasons that are in the best interests of such party or a
member of such party’s Group, without regard to the best interests of any member
of the other Group) and no member of the Group with a majority interest in such
Shared Contingent Gain shall have any liability to any Person (including any
member of the other Group) as a result of any such determination.
 
          (c) In the event of any dispute as to whether any claim or right is a
Contingent Gain or whether any Contingent Gain is a Shared Contingent Gain, an
Exclusive Vishay Contingent Gain or an Exclusive VPG Contingent Gain, Vishay
may, but shall not be obligated to, commence prosecution or other assertion of
such claim or right pending resolution of such dispute. In the event that Vishay
commences any such prosecution or assertion and, upon resolution of the dispute,
it is determined hereunder that VPG has the exclusive right to such claim or
right, Vishay shall, promptly upon the request of VPG, discontinue the
prosecution or assertion of such right or claim and transfer the control thereof
to VPG. In such event, VPG will reimburse Vishay for all costs and expenses,
reasonably incurred prior to resolution of such dispute in the prosecution or
assertion of such claim or right.
 
     Section 6.2 Exclusive Contingent Liabilities. Each Exclusive Contingent
Liability shall constitute a Liability for which indemnification is provided by
Vishay or VPG, as the case may be, pursuant to Article V and shall be subject to
the procedures set forth in Article V with respect thereto.
 
     Section 6.3 Shared Contingent Liabilities.
 
          (a) As set forth in Section 5.6(c) and subject to Section 5.6(g), any
Third Party Claim that is a Shared Contingent Liability, and the costs and
expenses thereof, shall be included in the calculation of the amount of the
applicable Shared Contingent Liability in determining the reimbursement
obligations of the other parties with respect thereto pursuant to this Section
6.3.
 
          (b) Each of Vishay and VPG shall be responsible for its Shared
Percentage of any Shared Contingent Liability. It shall not be a defense to any
obligation by any party to pay any amount in respect of any Shared Contingent
Liability that such party was not consulted in the defense thereof, that such
party’s views or opinions as to the conduct of such defense were not accepted or
adopted, that such party does not approve of the quality or manner of the
defense thereof or that such Shared Contingent Liability was incurred by reason
of a settlement rather than by a judgment or other determination of liability
(even if, subject to Section 5.6(g), such settlement was effected without the
consent or over the objection of such party).
 
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     Section 6.4 Payments. Any amount owed in respect of (i) any Shared
Contingent Liabilities (including reimbursement for the cost or expense of
defense of any Third Party Claim that is a Shared Contingent Liability), or (ii)
any Shared Contingent Gains (including reimbursement for the costs or expenses
to commence, prosecute or settle matters with respect to a Shared Contingent
Gain), pursuant to this Article VI shall be remitted promptly after the party
entitled to such amount provides an invoice (including reasonable supporting
Information with respect thereto) to the party owing such amount.
 
     Section 6.5 Procedures to Determine Status of Contingent Liability or
Contingent Gain.
 
          (a) With respect to any other matters not set forth on Schedules to
this Agreement (regardless of whether such matters are currently pending but not
set forth on such Schedules or are asserted or filed hereafter), Vishay and VPG
will form the Contingent Claim Committee for (x) the purpose of resolving
whether:
 
     (i) any claim or right is a Contingent Gain; 
 
     (ii) any Contingent Gain is a Shared Contingent Gain, an Exclusive Vishay
Contingent Gain or an Exclusive VPG Contingent Gain;
 
     (iii) any Liability is a Contingent Liability; or 
 
     (iv) any Contingent Liability is a Shared Contingent Liability, an
Exclusive Vishay Contingent Liability or an Exclusive VPG Contingent Liability.
 
and (y) for the purpose of determining the Shared VPG Percentage and the Shared
Vishay Percentage in connection with Shared Contingent Gains and Shared
Contingent Liabilities.
 
          (b) (i) The parties shall refer any Shared Contingent Gain or Shared
Contingent Liability to the Contingent Claim Committee to determine the Shared
VPG Percentage and the Shared Vishay Percentage in connection with such Shared
Contingent Gain or Shared Contingent Liability and (ii) any of the parties may
refer any potential Contingent Gains or Contingent Liabilities to the Contingent
Claim Committee for resolution as described in Section 6.5(a) (any such request
described in clause (i) or clause (ii), a “Determination Request”). If the
Contingent Claim Committee reaches a determination (which shall be made within
thirty (30) days of such referral on a matter submitted to the Contingent Claim
Committee by any of the parties), then that determination shall be binding on
all of the parties and their respective successors and assigns. In the event
that the Contingent Claim Committee cannot reach a determination as to (i) the
appropriate allocation of Contingent Gains or Contingent Liabilities between the
parties in connection with Shared Contingent Gains or Shared Contingent
Liabilities, respectively, or (ii) as to the nature or status of any such
Contingent Liabilities or Contingent Gains, within thirty (30) days after such
referral, then the issue will be submitted to the respective Senior Party
Representative of Vishay and VPG for determination. If the Senior Party
Representatives cannot reach a determination, then the procedures set forth in
Article VIII of this Agreement shall govern.
 
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     Section 6.6 Certain Case Allocation Matters. The parties agree that if any
Action not set forth on Schedules to this Agreement involves separate and
distinct claims that, if not joined in a single Action, would constitute
separate Exclusive Contingent Liabilities of two or more parties, they will use
their reasonable best efforts to segregate such separate and distinct claims so
that the Liabilities associated with each such claim (including all costs and
expenses) shall be treated as Exclusive Contingent Liabilities of the
appropriate party and so that each party shall have the rights and obligations
with respect to each such claim (including pursuant to Article V) as would have
been applicable had such claims been commenced as separate Actions.
Notwithstanding the foregoing provisions, this Section 6.6 shall not apply to
any separate and distinct claim that is de minimis or frivolous in nature.
 
ARTICLE VII
 
INSURANCE
 
     Section 7.1 Insurance Matters Generally.
 
          (a) VPG does hereby, for itself and each other member of the VPG
Group, agree that no member of the Vishay Group or any Vishay Indemnified Party
shall have any liability whatsoever as a result of the insurance policies and
practices of Vishay and its Affiliates as in effect at any time prior to the
Effective Time, including as a result of the level or scope of any such
insurance, the creditworthiness of any insurance carrier, the terms and
conditions of any policy, the adequacy or timeliness of any notice to any
insurance carrier with respect to any claim or potential claim, the bankruptcy
or insolvency of any insurance carrier or otherwise.
 
          (b) The Separated Assets shall include any and all Insurance Policies
which are owned or maintained by or on behalf of VPG or any member of the VPG
Group or which are owned or maintained by or on behalf of Vishay or any member
of the Vishay Group and which relate exclusively to the MGF Business and which
are by their terms assignable to VPG or any member of the VPG Group. All other
Insurance Policies shall be subject to the provisions of Section 7.2.
 
     Section 7.2 Shared Insurance Policies.
 
          (a) Vishay agrees to use its reasonable best efforts to cause the
interest and rights of VPG and the other members of the VPG Group as of the
Effective Time as insureds, additional named insureds or beneficiaries or in any
other capacity under occurrence-based Insurance Policies of Vishay or any other
member of the Vishay Group in respect of periods prior to the Effective Time
(and under claims-made policies and programs to the extent a claim has been
submitted prior to the Effective Time) to survive the Effective Time for the
period for which such interests and rights would have survived without regard to
the transactions contemplated hereby to the extent permitted by such Insurance
Policies; provided however that Vishay shall be required to maintain tail or
extended coverage for the benefit of the VPG Group with respect to certain
Insurance Policies in effect prior to the Effective Time as described in
Schedule 1.4 and Schedule 2.5(b)(v). For the avoidance of doubt, except as
otherwise provided in Schedule 1.4 or Schedule 2.5(b)(v), Vishay shall not be
required to maintain any tail or extended coverage for the benefit of the VPG
Group with respect to Insurance Policies in effect prior to the Effective Time.
 
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          (b) Following the Effective Time, Vishay, at its sole option, cost and
expense, shall continue to administer the Insurance Policies, including on
behalf of VPG and the other members of the VPG Group. Vishay’s retention of the
administrative responsibilities for the Insurance Policies shall not relieve VPG
or any member of the VPG Group submitting any insurance claim of the
responsibility to report such claim accurately, completely and in a timely
manner or limit the authority of VPG or such other member of the VPG Group to
settle any such insurance claim within the limits of the relevant Insurance
Policy. Vishay may discharge its administrative responsibilities under this
Section 7.2(b) by contracting for the provision of services by one or more
independent parties.
 
          (c) If any insurer does not promptly acknowledge insurance coverage in
connection with any insured Assumed Liabilities, then, with respect to such
insured Assumed Liabilities, VPG, on an as-incurred basis (i) shall advance all
amounts expended by Vishay for or with respect to such insured Assumed
Liabilities, including all costs and expenses in connection with the defense and
settlement and in satisfaction of any judgment incurred, and amounts sufficient
to cover any Liabilities required to be paid by Vishay or any member of the
Vishay Group, and (ii) shall pay all costs incurred in connection with pursuing
and recovering Insurance Proceeds with respect to the insured Assumed
Liabilities, but, in the case of each of clauses (i) and (ii) above, only to the
extent Vishay is taking action in respect therewith at the request of VPG, which
shall be entitled to direct all such defense, settlement and recovery efforts,
subject, however to the provisions of Article V. Any Insurance Proceeds received
by Vishay or any other member of the Vishay Group after the Effective Time under
such policies and programs in respect of VPG and the other members of the VPG
Group shall be for the benefit of and shall promptly be paid over to VPG and the
other members of the VPG Group. Notwithstanding anything herein to the contrary,
neither Vishay nor any member of the Vishay Group shall be liable for the
satisfaction of any claim by VPG or any member of the VPG Group out of any
self-insurance program maintained by a member of the Vishay Group to the extent
relating to an Assumed Liability.
 
          (d) Except as otherwise provided in Schedule 1.4 or Schedule
2.5(b)(v), Vishay and VPG agree that the aggregate amount of any deductible paid
shall be borne by the parties in the same proportion as the Insurance Proceeds
received by each such party bears to the total Insurance Proceeds received under
the applicable Insurance Policy, and any party that has paid more than its
allocable share of the deductible shall be entitled to receive from the other
party an amount such that each party will only bear its allocable share.
 
          (e) This Agreement is not intended as an attempted assignment of any
policy of insurance or as a contract of insurance and shall not be construed to
waive any right or remedy of any member of the Vishay Group in respect of any
insurance policy or any other contract or policy of insurance.
 
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          (f) The parties agree to use their reasonable best efforts to
cooperate with respect to the insurance matters contemplated by this Agreement.
In the event that both parties have insurance claims relating to the same
occurrence, the parties shall jointly defend and waive any conflict necessary to
the conduct of a joint defense.
 
          (g) Nothing in this Agreement shall be deemed to restrict any member
of the VPG Group from acquiring at its own expense any other insurance policy in
respect of any Liabilities or covering any period.
 
     Section 7.3 Insurance for VPG Officers & Directors. Vishay shall use its
reasonable best efforts to provide insurance to those individuals who at and
immediately following the Effective Time are officers, directors, employees,
fiduciaries or agents of VPG and who immediately prior to the Effective Time
were insured persons under the current Vishay Directors & Officers Liability
Insurance Policy (such individuals, the “VPG Officers & Directors”) with
material terms and conditions no less favorable to the VPG Officers & Directors
than is available to the officers, directors, employees, fiduciaries or agents
of Vishay under the Vishay Directors & Officers Liability Insurance Policy in
effect at such time, except that such insurance shall exclude coverage for
wrongful acts, errors or omissions occurring after the Distribution Date.
 
     Section 7.4 Director and Officer Indemnification. For a period of six (6)
years from the Effective Time, the provisions of the Amended and Restated
Certificate of Incorporation and Amended and Restated By-laws of Vishay to the
extent providing for indemnification of persons who were officers, directors,
employees, fiduciaries or agents immediately prior to the Effective Time shall
not be amended in any manner that would adversely affect the rights of persons
who at the Effective Time were directors, officers, employees, fiduciaries or
agents of any member of the VPG Group, unless such modification shall be
required by, and then only to the minimum extent required by, Applicable Law.
 
     Section 7.5 VPG Insurance. Effective as of the Distribution Date, except as
expressly provided herein, Vishay shall not be obligated to maintain insurance
coverage with respect to the business, affairs, operations, assets or
liabilities of the VPG Group, and VPG shall indemnify and hold the Vishay Group
harmless from any Liabilities arising by reason of the failure of the VPG Group
to maintain such insurance.
 
ARTICLE VIII
 
DISPUTE RESOLUTION
 
     Section 8.1 Agreement to Resolve Disputes. Except as otherwise specifically
provided in any Ancillary Agreement, the procedures for discussion, negotiation
and dispute resolution set forth in this Article VIII 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 any Ancillary Agreement, or the transactions contemplated
hereby or thereby (including all actions taken in furtherance of the
transactions contemplated hereby or thereby on or prior to the date hereof), or
the commercial or economic relationship of the parties relating hereto or
thereto, between or among any member of the Vishay Group on the one hand and the
VPG Group on the other hand. Each party agrees on behalf of itself and each
member of its respective Group that the procedures set forth in this Article
VIII shall be the sole and exclusive remedy in connection with any dispute,
controversy or claim relating to any of the foregoing matters and irrevocably
waives any right to commence any Action in or before any Governmental Authority,
except as otherwise required by Applicable Law.
 
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     Section 8.2 Dispute Resolution; Mediation.
 
          (a) Either party may commence the dispute resolution process of this
Section 8.2 by giving the other party written notice (a “Dispute Notice”) of any
controversy, claim or dispute of whatever nature arising out of or relating to
or in connection with this Agreement, any Ancillary Agreement or the breach,
termination, enforceability or validity thereof (a “Dispute”) which has not been
resolved in the normal course of business or as provided in the relevant
Ancillary Agreement. The parties shall attempt in good faith to resolve any
Dispute by negotiation between executives of each party (“Senior Party
Representatives”) who have authority to settle the Dispute and, unless
discussions between the parties are already at a senior management level, who
are at a higher level of management than the Persons who have direct
responsibility for the administration of this Agreement or the relevant
Ancillary Agreement. Within fifteen (15) days after delivery of the Dispute
Notice, the receiving party shall submit to the other a written response (the
“Response”). The Dispute Notice and the Response shall include (i) a statement
setting forth the position of the party giving such notice and a summary of
arguments supporting such position and (ii) the name and title of such party’s
Senior Party Representative and any other Persons who will accompany the Senior
Party Representative at the meeting at which the parties will attempt to settle
the Dispute. Within thirty (30) days after the delivery of the Dispute Notice,
the Senior Party Representatives of both parties shall meet at a mutually
acceptable time and place, and thereafter as often as they reasonably deem
necessary, to attempt to resolve the Dispute. The parties shall cooperate in
good faith with respect to any reasonable requests for exchanges of Information
regarding the Dispute or a Response thereto.
 
          (b) If the Dispute has not been resolved within sixty (60) days after
delivery of the Dispute Notice, or if the parties fail to meet within thirty
(30) days after delivery of the Dispute Notice as hereinabove provided, the
parties shall make a good faith attempt to settle the Dispute by mediation
pursuant to the provisions of this Section 8.2 before resorting to arbitration
contemplated by Section 8.3 or any other dispute resolution procedure that may
be agreed by the parties.
 
          (c) All negotiations, conferences and discussions pursuant to this
Section 8.2 shall be confidential and shall be treated as compromise and
settlement negotiations. Nothing said or disclosed, nor any document produced,
in the course of such negotiations, conferences and discussions that is not
otherwise independently discoverable shall be offered or received as evidence or
used for impeachment or for any other purpose in any current or future
arbitration.
 
          (d) Unless the parties agree otherwise, the mediation shall be
conducted in accordance with the CPR Institute for Dispute Resolution Model
Procedure for Mediation of Business Disputes in effect on the date of this
Agreement by a mediator mutually selected by the parties.
 
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          (e) Within thirty (30) days after the mediator has been selected as
provided above, both parties and their respective attorneys shall meet with the
mediator for one (1) mediation session, it being agreed that each party
representative attending such mediation session shall be a Senior Party
Representative with authority to settle the Dispute. If the Dispute cannot be
settled at such mediation session or at any mutually agreed continuation
thereof, either party may give the other and the mediator a written notice
declaring the mediation process at an end.
 
          (f) Costs of the mediation shall be borne equally by the parties
involved in the matter, except that each party shall be responsible for its own
expenses.
 
          (g) Any Dispute regarding the following matters is not required to be
negotiated or mediated prior to seeking relief from an arbitrator or, if
applicable, from a court pursuant to Section 10.14: (i) breach of any obligation
of confidentiality or waiver of Privilege; and (ii) any other claim where
interim relief is sought to prevent serious and irreparable injury to one of the
parties. However, the parties to the Dispute shall make a good faith effort to
negotiate and mediate such Dispute, according to the above procedures, while
such arbitration is pending.
 
     Section 8.3 Arbitration.
 
          (a) Subject to Section 8.3(b), if for any reason a Dispute is not
resolved within one hundred eighty (180) days from delivery of the Dispute
Notice in accordance with the dispute resolution process described in Section
8.2, the parties agree that such Dispute shall be settled by binding arbitration
before a single arbitrator under the auspices of the American Arbitration
Association (“AAA”) in Philadelphia, Pennsylvania pursuant to the Commercial
Rules of the AAA. The arbitrator selected to resolve the Dispute shall be bound
exclusively by the laws of the State of New York without regard to its choice of
law rules. Any decisions of award of the arbitrator will be final and binding
upon the parties and may be entered as a judgment by the parties. Any rights to
appeal or review such award by any court or tribunal are hereby waived to the
extent permitted by Applicable Law.
 
          (b) Costs of the arbitration shall be borne equally by the parties
involved in the matter, except that each party shall be responsible for its own
expenses, except as otherwise determined by the arbitrator.
 
          (c) The parties agree to comply and cause the members of their
applicable Group to comply with any award made in any arbitration proceeding
pursuant to this Section 8.3, and agree to enforcement of or entry of judgment
upon such award in any court of competent jurisdiction, including any federal or
state court located in Philadelphia, Pennsylvania or the City of New York,
Borough of Manhattan. The arbitrator shall be entitled to award any remedy in
such proceedings, including monetary damages, specific performance and all other
forms of legal and equitable relief; provided, however, that the arbitrator
shall not be entitled to award punitive, exemplary, treble or any other form of
non-compensatory monetary damages unless in connection with indemnification for
a Third Party Claim, to the extent of such claim.
 
     Section 8.4 Continuity of Service and Performance. Unless otherwise agreed
in writing, the parties will continue to provide service and honor all other
commitments under this Agreement and each Ancillary Agreement during the course
of dispute resolution pursuant to the provisions of this Article VIII with
respect to all matters not subject to such Dispute.
 
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     Section 8.5 Limitation of Liability. In no event shall any member of the
Vishay Group or the VPG Group be liable to any member of the other Group 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 Agreement, whether or not
such Person 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 V. The provisions of Article V, Article VIII and Section
10.14 shall be the parties’ sole recourse for any breach hereof or any breach of
the Ancillary Agreements, except as may be explicitly provided in any Ancillary
Agreement.
 
ARTICLE IX
 
TERMINATION
 
     Without limiting the generality of Section 3.5(a), (i) this Agreement and
the Ancillary Agreements may be terminated, (ii) the Separation may be abandoned
and (iii) the Distribution may be abandoned, in each case at any time prior to
the Effective Time by and in the sole and absolute discretion of Vishay without
the approval of VPG. In the event of such termination, neither party shall have
any Liability of any kind to the other party.
 
ARTICLE X
 
MISCELLANEOUS
 
     Section 10.1 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 10.2 Entire Agreement. This Agreement, the Ancillary Agreements,
and any Annexes, Schedules and Exhibits hereto and thereto, as well as any other
agreements and documents referred to herein and therein, 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.
 
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     Section 10.3 Construction.
 
          (a) 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.
 
          (b) 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:
 
     (i) the singular number includes the plural number and vice versa; 
 
     (ii) 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;
 
     (iii) reference to any gender includes each other gender; 
 
     (iv) 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; 
 
     (v) 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; 
 
     (vi) “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 or thereof; 
 
     (vii) “including” (and with correlative meaning “include”) means including
without limiting the generality of any description preceding such term; 
 
     (viii) the Table of Contents and headings are for convenience of reference
only and shall not affect the construction or interpretation hereof or thereof; 
 
     (ix) with respect to the determination of any period of time, “from” means
“from and including” and “to” means “to but excluding;” and 
 
     (x) references to documents, instruments or agreements shall be deemed to
refer as well to all addenda, exhibits, schedules or amendments thereto.
 
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     Section 10.4 Assignability. This 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 Agreement without the express prior written
consent of the other party. Notwithstanding the foregoing, either party may
assign its rights and obligations under this 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 Agreement by any such
Wholly-owned Subsidiary. Any attempted assignment or delegation in violation of
this Section 10.4 shall be void.
 
     Section 10.5 Third Party Beneficiaries. Except for (x) the indemnification
rights under this Agreement of any Vishay Indemnified Party or any VPG
Indemnified Party in their respective capacities as such under Article V and for
the release under Section 5.1 of any Person provided therein and (y) the rights
to insurance of VPG Officers and Directors under Section 7.3: (i) the provisions
of this 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 Agreement; and (iii) this Agreement shall not provide any
third party with any remedy, claim, liability, reimbursement, claim of action or
other right in excess of those existing without reference to this Agreement.
 
     Section 10.6 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 10.7 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 Vishay, 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: Ernest S. Wechsler, Esq.
     Telephone: 212-715-9100
     Facsimile: 212-715-8000
 
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     If to VPG, 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: 484-321-5301
 
     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 (5th) 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.
 
     Section 10.8 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 10.9 Nonrecurring Costs and Expenses. Vishay shall pay for all
reasonable documented out-of-pocket fees, costs and expenses incurred by the VPG
Group prior to the Effective Time in connection with the Separation and the
Distribution.
 
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     Section 10.10 Press Releases; Public Announcements. Prior to the
Distribution Date, Vishay shall be responsible for issuing any press releases or
otherwise making public statements with respect to this Agreement, the Ancillary
Agreements, the Separation, the Distribution or any of the other transactions
contemplated hereby and thereby, and VPG shall not make such statements without
the prior written consent of Vishay. Prior to the Distribution Date, Vishay and
VPG shall each consult with the other prior to making any filings with any
Governmental Authority with respect to any of the foregoing, but no such filing
shall be made without the approval of Vishay, and Vishay shall be permitted to
make any filings as it deems necessary or appropriate. Following the Effective
Time, 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 10.11 Survival of Covenants. Except as expressly set forth in this
Agreement or any Ancillary Agreement, any covenants, representations or
warranties contained in this Agreement or any Ancillary Agreement shall survive
the Separation and Distribution and shall remain in full force and effect.
 
     Section 10.12 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 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 10.13 Amendments. This Agreement may be amended, supplemented,
modified or abandoned at any time prior to the Distribution Date by and in the
sole and absolute discretion of Vishay without the approval of VPG or of the
stockholders of Vishay. After the Effective Time, 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.
 
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     Section 10.14 Specific Performance. The parties agree that the remedy at
law for any breach of this Agreement or any Ancillary Agreement may be
inadequate, and that, as between Vishay and VPG, any party by whom this
Agreement or any Ancillary 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 or any
Ancillary 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 or any
Ancillary Agreement as between Vishay and VPG, or the members of their
respective Groups, or prevent any violation hereof, and, to the extent permitted
by Applicable Law, as between Vishay and VPG, each party waives any objection to
the imposition of such relief.
 
     Section 10.15 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 10.14. 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 10.7 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 10.15. 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 any Ancillary Agreement, or the transactions
contemplated hereby or thereby for which it has submitted to jurisdiction
pursuant to this Section 10.15, and waives any claim that any such Action, suit
or proceeding brought in any such court has been brought in an inconvenient
forum.
 
     Section 10.16 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 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 10.16.
 
[SIGNATURE PAGE FOLLOWS]
 
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     WHEREFORE, the parties have signed this Separation Agreement effective as
of the date first set forth above.
 

VISHAY INTERTECHNOLOGY, INC.   /s/ Lior E. Yahalomi Name: Dr. 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

--------------------------------------------------------------------------------

MASTER SEPARATION AND DISTRIBUTION AGREEMENT
 
between
 
VISHAY INTERTECHNOLOGY, INC.
 
and
 
VISHAY PRECISION GROUP, INC.
 
DATED JUNE 22, 2010
 
 
 
ANNEX A
 
 
 
 
 
- 2 -
 

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VISHAY PRECISION GROUP, INC.
 
Pro Forma Combined and Consolidated Balance Sheets
 
(In thousands)
 

April 3, 2010 (unaudited) Assets Current assets:        Cash and cash
equivalents $ 73,121          Accounts receivable, net 25,212        Net
inventories 45,010        Deferred income taxes 4,984        Prepaid expenses
and other current assets 5,333 Total current assets 153,660   Property and
equipment, net 44,236 Intangible assets, net 16,244 Other assets 8,440 Total
assets $ 222,580     Liabilities and equity Current liabilities:        Notes
payable to banks $ -        Trade accounts payable 6,942        Payroll and
related expenses 7,082        Other accrued expenses 6,119        Income taxes
1,286        Current portion of long-term debt 96 Total current liabilities
21,525   Long-term debt, less current portion 14,525 Deferred income taxes 5,985
Other liabilities 6,347 Accrued pension and other postretirement costs 10,442
Total liabilities 58,824   Equity: Common stock 1,230 Class B common stock 100
Paid in capital in excess of par 174,523 Accumulated other comprehensive income
(loss) (12,231 ) Total stockholders’ equity 163,622 Noncontrolling interests 134
Total equity 163,756 Total liabilities and equity $ 222,580  

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MASTER SEPARATION AND DISTRIBUTION AGREEMENT
 
between
 
VISHAY INTERTECHNOLOGY, INC.
 
and
 
VISHAY PRECISION GROUP, INC.
 
DATED JUNE 22, 2010
 
SCHEDULES
 
Terms used but not defined in these Schedules shall have the meanings assigned
to them in the Master Separation and Distribution Agreement (the “Master
Separation Agreement”).
 
1
 

--------------------------------------------------------------------------------

Schedule 1.1
Capital Allocation Transactions
 
Prior to the Separation, the parties will cause the following transactions to
occur:
 

      1.       All intercompany accounts for money borrowed and non-trade
invoicing between Vishay or any other member of the Vishay Group, on the one
hand, and VPG or any other member of the VPG Group, on the other, will be
settled and eliminated.   2. The extinguishment of notes payable obligations
running from members of the VPG Group to members of the Vishay Group will be
effected through distribution and contribution transactions of cash and the
notes.   3. Vishay will cause the VPG to have Actual VPG Net Cash as of the
Distribution Date equal between $58,500,000 and $71,500,000. To the extent
Actual VPG Net Cash is less than or exceeds these values, the parties will make
an adjustment in accordance with the terms of Section 2.17 of the Master
Separation Agreement.   4. VPG will enter into a credit facility.

 
The foregoing transaction list is qualified by reference to the description of
the separation transactions in the Private Letter Ruling Request, dated June 11,
2010, as amended from time to time prior to the Separation, submitted by Vishay
Intertechnology, Inc. to the Internal Revenue Service (the “Private Letter
Ruling Request”). In the case of any inconsistency between this Schedule and the
Private Letter Ruling Request, this Schedule shall be deemed amended to conform
to the description of the separation transactions as set forth in the Private
Letter Ruling Request.
 
2
 

--------------------------------------------------------------------------------

Schedule 1.2
Exclusive VPG Contingent Liabilities
 
For the avoidance of doubt, this schedule is not necessarily exhaustive of all
litigation relating to the MGF Business.
 
Lawsuits

Tawfik v. Vishay Intertechnology, Inc.

McMahon v. Vishay Intertechnology, Inc.
 
Environmental Matters
 
Wondra v. BLH Electronics
 
Tak and Binh Chan v. Vishay Measurements Group et al
 
Sutton Brook Site (Vishay BLH, MA)
 
Product Liability
 
Esteve SA (Rians, France)
 
Open VPG Claims
 

Date of Claim Name of Employee       Incident       Number       Status      
Entity 7.        [Employee name omitted] 28.11.2003 10604063401 open   Tedea
International Ltd 8.   [Employee name omitted] 09.01.2006 10607050390 open
V.I.E.C. Ltd. 9.   [Employee name omitted]   28.05.2007 10607031117 open
V.I.E.C. Ltd. 10.   [Employee name omitted] 13.06.2007 10607036036 open V.I.E.C.
Ltd. 11.   [Employee name omitted] 04.11.2007 10607065396 open Vishay Israel
Limited 12.   [Employee name omitted] 17.12.2002 10609050909 open Vishay Israel
Limited

3
 

--------------------------------------------------------------------------------

Schedule 1.3
Separation Transactions
 
The separation transactions shall be as specified in the Private Letter Ruling
Request. In the case of any inconsistency between this Schedule and the Private
Letter Ruling Request, this Schedule shall be deemed amended to conform to the
description of the separation transactions as set forth in the Private letter
Ruling Request.
 
The parties will cause the following miscellaneous asset transfers to occur:
 

      1.       Acquisition of intellectual property owned by Vishay S.A. and
necessary for manufacturing strain gage products to Vishay Measurements Group,
Inc.   2. Acquisition of intellectual property owned by Vishay S.A. and
necessary for manufacturing foil resistor chips for Vishay Precision Foil GmbH.
  3. Transfer of other intellectual property as set forth in the attachment
hereto.

 
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Attachment to Schedule 1.3 to Master Separation Agreement
Transferred Intellectual Property
 

COUNTRY OF PATENT # TITLE REGISTRATION VPG ASSIGNEE 7576622 (US4176445A) Metal
foil resistor United States Vishay Precision Group, Inc. 4,176,445 Metal foil
resistor United States Vishay Precision Group, Inc. 4,297,670 Metal foil
resistor United States Vishay Precision Group, Inc. 4,306,217 Flat electrical
components United States Vishay Precision Group, Inc. 2926516 German patent
Germany Vishay Precision Group, Inc. 1 143 810 Metal foil resistor Canada Vishay
Precision Group, Inc. Application Circuit compensation in strain gage 61/229,123
based transducers United States Vishay Precision Group, Inc. Foil strain gage
for automated handling US 7,150,199 B2 and packaging United States Vishay
Precision Group, Inc. Foil strain gage for automated handling WO 2006/041577 A1
and packaging PCT Worldwide Vishay Precision Group, Inc. Electrical resistors
and methods of 5,206,623 making same United States Vishay Precision Group, Inc.

CURRENT RENEWAL TRADEMARK TRADEMARK COUNTRY STATUS DATE OWNER VPG ASSIGNEE
Vishay BULK METAL EUROPEAN UNION REGISTERED 14-Feb-11 Intertechnology, Inc.
Vishay Precision Group, Inc. Vishay BULK METAL FRANCE REGISTERED 26-Jun-12
Intertechnology, Inc. Vishay Precision Group, Inc. Vishay BULK METAL UNITED
STATES REGISTERED 19-Dec-12 Intertechnology, Inc. Vishay Precision Group, Inc.
Vishay Techno MULTIDIAL UNITED STATES REGISTERED 23-May-11 Components LLC Vishay
Precision Group, Inc.

1
 

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Schedule 1.4
Shared Contingent Liabilities
 
Product Liability
 
Product liability refers to third party liability from bodily injury and/or
property damage caused by faulty products. With respect to products manufactured
in all jurisdictions other than the United States and sold prior to the
Separation, it also includes other third party financial loss and the cost of
dismantling and refitting any other products manufactured with the faulty
product, but does not include the cost of product recall. With respect to
products sold in the United States, it includes other third party financial loss
only to extent covered by the Errors and Omission (E&O) Insurance Policy of the
Vishay Group.
 
The Vishay Group will be responsible for product liability in respect of any
product manufactured by the VPG Group outside the United States and sold prior
to the Separation, whether a claim is made with respect thereto before or after
the Separation, to the extent of available insurance coverage of the Vishay
Group.
 
The Vishay Group will be responsible for product liability in respect of any
product sold by the VPG Group prior to the Separation inside the United States,
but only for which a claim has been made with respect thereto before the
Separation, to the extent of available insurance coverage of the Vishay Group;
provided that to the extent the liability is covered under the Errors & Omission
(E&O) Insurance Policy of the Vishay Group, Vishay will be responsible for the
liability whether a claim is made with respect thereto before or after the
Separation.
 
The following shall govern deductible amounts under any insurance policies of
the Vishay Group for which coverage is sought under the circumstances recited in
the two preceding paragraphs. Any deductible for which a liability has been
accrued on the books and records of the VPG Group prior to the Separation will
be the sole responsibility of the VPG Group. Any policy deductible for which a
liability has not been accrued on the books and records of the VPG Group prior
to the Separation will be shared equally by the Vishay Group and the VPG Group.
 
Vishay agrees to (i) obtain tail coverage for a period of five years under the
E&O Policy of Vishay (as in effect on the date the Agreement), to the extent it
affords coverage for third party loss on account of products manufactured and
sold by the VPG Group prior to the Separation; and (ii) purchase or self-insure
extended reporting coverage for a period of five years for product liability
relating to products of the VPG Group manufactured and sold prior to the
Separation, which coverage shall be substantially the same (including deductible
amounts and policy limits) as the coverage afforded under the existing policy of
Vishay with HDI-Gerling (as in effect on the date the Agreement), but only in
respect of products manufactured outside the United States.
 
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Product Recall Liability
 
Product Recall Liability refers to third party expenses arising in connection
with the recall of a faulty product to prevent bodily injury or property damage.
 
The Vishay Group will be responsible for product recall liability in respect of
any product manufactured by the VPG Group outside the United States and sold
prior to the Separation, whether a claim is made with respect thereto before or
after the Separation, to the extent of available insurance coverage of the
Vishay Group.
 
The following shall govern deductible amounts under any insurance policies of
the Vishay Group for which coverage is sought under the circumstances recited in
the preceding paragraph. Any deductible for which a liability has been accrued
on the books and records of the VPG Group prior to the Separation will be the
sole responsibility of the VPG Group. Any policy deductible for which a
liability has not been accrued on the books and records of the VPG Group prior
to the Separation will be shared equally by the Vishay Group and the VPG Group.
 
Vishay agrees to purchase or self-insure extended reporting coverage for a
period of five years for product recall liability relating to products of the
VPG Group manufactured and sold prior to the Separation, which coverage shall be
substantially the same (including deductible amounts and policy limits) as the
coverage afforded under the existing policy of Vishay with Gerling Insurance (as
in effect on the date the Agreement), but only in respect of products
manufactured outside the United States.
 
Liabilities Relating to the Separation
 
Liabilities relating to the Separation based upon a claim or other assertion
that the Separation violated the rights of any Person or constituted a breach of
a duty owed by any Person to the stockholders of Vishay or VPG shall be borne by
the Vishay Group and the VPG Group as follows:
 

      (i)       if covered by an insurance policy of the Vishay Group or an
insurance policy of the VPG Group, by the Vishay Group or the VPG Group, as the
case may be, but only to the extent of the insurance proceeds;   (ii) each party
shall be responsible for the policy deductible under its insurance policy
referred to in clause (i); and   (iii) otherwise in the proportion of the Vishay
Group 90% and the VPG Group 10%.

 
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Schedule 2.4(a)(iii)
Subsidiaries of VPG
 

Company Name Country Vishay - PM Belgium N.V. Belgium Vishay - Waste Collection
Systems Belgium N.V. Belgium High Goals Investments Limited British Virgin
Islands Vishay Tedea-Huntleigh (Beijing) Electronics Co., Ltd China Vishay
Precision Measurement Trading (Shanghai) Co., Ltd. China Vishay Celtron
Technologies (Tianjin) Co., Ltd China Pharos de Costa Rica, S.A. Costa Rica
Vishay PME France SARL France SCI Vijafranc France Vishay Measurements Group
France, S.A.S. France Vishay Precision Foil GmbH Germany Vishay Measurement
Group GmbH Germany Powertron GmbH Germany MDT Technik GmbH Germany Vishay
Transducers India Limited India Vishay Precision Transducers India Private
Limited India Vishay PM Onboard (Ireland) Limited Ireland Vishay Precision
Israel Ltd. Israel Vishay Advanced Technologies, Ltd. Israel Tedea-Huntleigh
International, Ltd. Israel T-H Industrial Properties, Ltd. Israel T-H
Technology, Ltd. Israel Alpha Electronics Corp. Japan Vishay Precision Foil K.K.
Japan Vishay Precision Holdings B.V. Netherlands Vishay - Waste Collection
Systems B.V. Netherlands Tedea Huntleigh B.V. Netherlands Vishay Revere
Transducers Europe B.V. Netherlands Vishay Nobel AS Norway Vishay Precision Asia
Investments Pte. Ltd. Singapore Vishay Precision España S.L. Spain Vishay Nobel
AB Sweden AB Givareteknik Sweden Vishay Celtron Technologies, Inc. Taiwan Vishay
Measurements Group UK Limited United Kingdom Vishay PM Group Limited United
Kingdom Vishay PM Onboard Limited United Kingdom Tedea-Huntleigh Europe Ltd.
United Kingdom Selectaid Limited United Kingdom Meadowgrip Limited United
Kingdom Fleet Weighing Limited United Kingdom PM Electronics Limited United
Kingdom Waste Collection Systems Limited United Kingdom Vishay Precision Group,
Inc. United States Vishay Measurements Group, Inc. United States Vishay
Transducers Ltd. United States Vishay Precision Foil, Inc. United States Vishay
BLH, Inc. United States Tedea-Huntleigh, Inc. United States

7
 

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Schedule 2.4(b)(i)
Excluded Assets
 

      1.       All assets used exclusively by Vishay S.A. in its strain gage
business other than intellectual property.   2. All assets used exclusively by
Vishay S.A. in finishing RCK foil resistor products, other than the intellectual
property and equipment transferred to Vishay Advanced Technologies Ltd. (see
Schedule 1.3).

 
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Schedule 2.5(b)(ii)
Excluded Assumed Liabilities
 
Excluded Assumed Liabilities other than Excluded Assumed Environmental
Liabilities set forth on Schedule 2.5(b)(v).
 

      1.       Any Liabilities arising from or related to Nippon Vishay, K.K. to
the extent arising from occurrences prior to the Distribution.

 
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Schedule 2.5(b)(v)
Excluded Assumed Environmental Liabilities
 
Other than the Environmental Liabilities set forth on Schedule 1.2 to be assumed
by VPG, the Vishay Group will be responsible for Environmental Liabilities in
respect of the manufacturing locations of the VPG Group in existence at or prior
to the Separation in the United States, Germany, India and Israel attributable
to, and to the extent of, conditions in existence at or prior to the Separation,
whether a claim is made with respect thereto before or after the Separation, to
the extent of available insurance coverage of the Vishay Group.
 
Other than the Environmental Liabilities set forth on Schedule 1.2 to be assumed
by VPG, the Vishay Group will be responsible for Environmental Liabilities in
respect of the manufacturing locations of the VPG Group in existence at or prior
to the Separation in all other jurisdictions attributable to, and to the extent
of, conditions in existence at or prior to the Separation, whether a claim is
made with respect thereto before or after the Separation, to the extent of
available insurance coverage of the Vishay Group, but only if the environmental
conditions giving rise to the Environmental Liabilities were openly manifest and
apparent prior to the Separation.
 
The following shall govern deductible amounts under any insurance policies of
the Vishay Group for which coverage is sought under the circumstances recited in
the two preceding paragraphs. Any deductible for which a liability has been
accrued on the books and records of the VPG Group prior to the Separation will
be the sole responsibility of the VPG Group. Any policy deductible for which a
liability has not been accrued on the books and records of the VPG Group prior
to the Separation will be shared equally by the Vishay Group and the VPG Group.
 
Vishay agrees to list as “discontinued locations” (i) for a period of five years
for VPG manufacturing locations in the United States, India and Israel in
existence at or prior to the Separation and (ii) for a period of three years for
VPG manufacturing locations located in Germany in existence at or prior to the
Separation, in the insurance policies of Vishay providing coverage for
Environmental Liabilities in those jurisdictions, but only in respect of
Liabilities attributable to, and to the extent of, environmental conditions in
existence at or prior to the Separation.
 
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Schedule 2.16
VPG Assets to be Transferred to Vishay
 

      1.       Research & development facility and warehouse historically owned
by Vishay Advanced Technologies, Ltd. (to be transferred to Vishay Israel
Limited).   2. The Dale Surface Mount Resistor “ASL” production line will be
sold from Alpha Electronics Corp. to Vishay Dale Electronics, Inc.

 
11
 

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Schedule 3.3(b)
Vishay Group Resignations
 
Effective as of the time of Separation, Mr. Ziv Shoshani will resign as an
executive officer of Vishay Intertechnology, Inc., but will remain a director on
Vishay Intertechnology Inc.’s board of directors.
 
12
 

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Schedule 3.4(b)
VPG Group Resignations
 
Effective as of the time of the Separation, Dr. Lior Yahalomi and Mr. William
Clancy will resign as directors of VPG.
 
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