exhibit10-16.htm


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

     

    Exhibit 10.16

     

     

     

    MANUFACTURING
AGREEMENT
 

     

    by and
between
 

     

    Vishay
S.A.,

     

    a
______________,

     

    as
Manufacturer
 

     

    and

     

    Vishay Precision Foil
GmbH,

     

    a
_____________________,
 

     

    as Buyer

     

     

     

    Dated as of _________,
2010

     

    

    
    



         This MANUFACTURING AGREEMENT (this “Agreement”) is made as of _____________, 2010 by and between Vishay S.A., a
_____________ (“Manufacturer”), and Vishay Precision Foil GmbH, a
_____________ (“Buyer”). Manufacturer and Buyer each may be
referred to herein as a “Party” and collectively, as the “Parties”. 

     

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


     

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

     

    ARTICLE
I
DEFINITIONS

     

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

     

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


     

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

     

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

     

         “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; (q) the terms of this Agreement; and (r)
all similar and related information in whatever form; in each case, of one party
which has been disclosed by Manufacturer or members of its Group on the one
hand, or Buyer 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. 

     

    

    
    



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


     

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


     

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

     

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

     

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

     

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

     

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


     

         “Last-Time Buy Order” has the meaning set forth in Section 4.6.

     

    

    
    



         “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. 

     

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

     

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

     

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

     

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

     

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

     

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

     

          “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.

     

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


     

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

     

    

    
    



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

     

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


     

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

     

    ARTICLE
II
PURCHASE AND SALE OF
PRODUCTS

     

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

     

         (b) All Products to be sold to Buyer pursuant to
this Agreement shall be manufactured by Manufacturer or an Affiliate of
Manufacturer. 

     

         SECTION 2.2 Raw Materials. Manufacturer shall be responsible for the
procurement of raw materials and container and packaging materials, in each case
consistent with the Manufacturer’s customary practices and necessary to
manufacture and package the Products, except that Buyer acknowledges that Vishay
Advanced Technologies, Ltd. (“VAT”), or an Affiliate of Buyer, shall supply
foil resistor chips on the terms described in the Supply Agreement between the
Manufacturer, as buyer, and VAT, as supplier, as may be amended or supplemented
from time to time (the “Supply Agreement”).

     

         SECTION 2.3 Product Specifications. (a) Manufacturer shall manufacture all
Products according to the Specifications in effect as of the date of this
Agreement, with such changes or additions to the Specifications of the Products
related thereto as shall be requested by Buyer in accordance with this Section
or as otherwise agreed in writing by the Parties, so long as and only to the
extent that if such requested change or addition requires a change or addition
in the Specifications applicable to the foil resistor chips to be supplied by
VAT under the Supply Agreement, VAT can supply the foil resistor chips with such
change or addition or Buyer is able to identify an appropriate alternative
source of foil resistor chips in the event that VAT is unable to provide such
chips. All other Products shall be manufactured with such Specifications as the
Parties shall agree in writing. 

     

    

    
    



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

     

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

     

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

     

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


     

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


     

    

    
    



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

     

         SECTION 2.6 Product Discontinuation.

     

         (a) Discontinuation of Products. At any time, Manufacturer may notify Buyer
that Manufacturer is discontinuing the manufacture and sale of a Product. Such
discontinuation shall take effect on a date specified by Manufacturer in a
notice of discontinuation, which date shall not be earlier than one (1) year
from the date of the notice of discontinuation; subject to the right of the
Buyer to submit a Last-Time Buy Order in accordance with Section 4.5.

     

         (b) Discontinuation of Foil Chips Under Supply
Agreement. To the extent
that a discontinuation by VAT under Section 2.5 of the Supply Agreement causes
Manufacturer to be unable to satisfy its obligations under this Agreement,
Manufacturer shall be released from any claims of breach of this Agreement or
the Supply Agreement; provided, that Manufacturer will give Buyer a
reasonable opportunity to find alternative sources of foil resistor chips.


     

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

     

    ARTICLE
III
FORECASTS

     

         SECTION 3.1 Forecasts. As and where warranted, Buyer shall provide
to Manufacturer a Forecast of the Firm Orders Buyer expects in good faith to
deliver to Manufacturer for such period of time specified in such Forecast.
Manufacturer shall use such Forecasts for capacity and raw material planning
purposes only and such Forecasts shall not constitute a commitment of any type
by Buyer to purchase the Products.

     

    

    
    



    ARTICLE
IV
ORDERS AND PAYMENT

     

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

     

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

     

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

     

         SECTION 4.2 Shipment.

     

         (a) Products intended for customers within Europe
will be shipped DDU destination Manufacturer’s customers. Products intended for
customers outside of Europe will be shipped Ex Works Manufacturer’s
factory.

     

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

     

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

     

         SECTION 4.3 Prices. Pricing for the Products shall be as set
forth on Exhibit A, as such Exhibit may be modified from time to
time by agreement of the Parties, which shall at all times equal the prices
charged by Buyer to its customers for its Products, less a 5% discount. If Buyer
proposes to change the prices for Products charged to its customers for any
calendar year, the parties will discuss the consequences of such change for the
pricing of the Products under this Agreement, including the annual adjustment,
and shall agree in good faith to make such change as shall preserve the intended
economic benefits of this Agreement to each of the Parties. 

     

         SECTION 4.4 Payment Terms.

     

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

     

    

    
    



         (b) The Parties hereby agree that Manufacturer
shall be entitled to realize a Gross Profit (as defined below) with respect to
the Products invoiced during each calendar year equal to 25% of the aggregate
Operational Cost of such Products during such calendar year (the “25% Markup”). If the actual aggregate Gross Profit for
the Products invoiced during any calendar year is less than 25% of the aggregate
Operational Cost for such Products, Buyer will pay to Manufacturer an amount
equal to the difference between (x) the aggregate Operational Cost for such
Products multiplied by 25% and (y) the actual aggregate Gross Profit realized on
such Products. If the actual aggregate Gross Profit for the Products invoiced
during each calendar year is greater than 25% of the aggregate Operational Cost
for such Products, Manufacturer will pay to Buyer an amount equal to the
difference between (x) the actual aggregate Gross Profit realized on such
Products and (y) the aggregate Operational Cost for such Products multiplied by
25%.

     

         (c) Within thirty (30) calendar days of the end of
each calendar year, Manufacturer shall furnish Buyer with a calculation, on an
aggregate basis, of the Gross Profit and Operating Cost for the Products
invoiced during such calendar year, together with back-up for such calculation
in reasonable detail, and a statement of the amount due to, or payable by,
Manufacturer in accordance with the provisions of subsection (a) above (the
“Gross Profit Statement”). Thereafter, Manufacturer will provide
Buyer and its accountants with access to the records and employees of Buyer, to
the extent reasonably related to Buyer’s evaluation of the Gross Profit
Statement, the calculation of the Gross Profit or the resolution of any dispute
with respect thereto. Within fifteen (15) calendar days after Buyer’s receipt of
the Gross Profit Statement, Buyer shall notify Manufacturer in writing as to
whether Buyer agrees or disagrees with the Gross Profit Statement, which notice,
in the case of a disagreement, shall set forth in reasonable detail the
particulars of such disagreement. In the event that Buyer does not provide a
notice of disagreement within such fifteen (15) calendar day period, then Buyer
shall be deemed to have accepted the calculations and the amounts set forth in
the Gross Profit Statement delivered by Manufacturer, which shall be final,
binding and conclusive for all purposes hereunder. If any notice of disagreement
is timely provided in accordance with this Section 4.4(c), Buyer and Manufacturer shall each use
commercially reasonable efforts for a period of fifteen (15) calendar days
thereafter (or such longer period as they may mutually agree) to resolve any
disagreements with respect to the calculations in the Gross Profit Statement.
If, at the end of such period, Buyer and Manufacturer are unable to resolve any
disagreements as to items in the Gross Profit 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) calendar days after the date on which such dispute is
referred to the Auditor, whether the actual Gross Profit as set forth in the
Gross Profit Statement was prepared in accordance with this Agreement whether
and to what extent the actual Gross Profit requires adjustment. The fees and
expenses of the Auditor shall be shared by Buyer and Manufacturer in inverse
proportion to the relative amounts of the disputed amounts determined in favor
Buyer and Manufacturer, respectively. The determination of the Auditor shall be
final, binding and conclusive for all purposes hereunder. The date on which the
actual Gross Profit is finally determined in accordance with this Section 4.4(c) is referred to as the “Determination Date.” 

     

         (d) Non-recurring Costs shall be charged by
Manufacturer to Buyer as incurred, and shall be paid by Buyer to Manufacturer
within sixty (60) days of receipt of the invoice therefore. Manufacturer shall provide such back-up and
detail with respect to any invoice for Non-recurring Costs as Manufacturer
reasonably requests.

     

    

    
    



         (e) As used in this section— 

     

    
      	                  
         	i.	        	“Gross Profit”
      means net sales minus Operational Costs.
	
            	 
	
            	ii.	
            	“Operational
      Costs” means the sum of direct labor costs, raw material costs and other
      variable costs, indirect expenses (including without limitation indirect
      supervisory costs and allocated use of utilities, space and similar
      items), and fixed costs (including without limitation costs of periodic
      requalification with the European Space Agency or any other Governmental
      Authority and depreciation costs of new tools and equipment), but
      excluding Non-recurring Costs. For the avoidance of doubt, costs and
      expenses of shipping, insurance and other costs and expenses incurred in
      connection with the shipment of the Products, shall constitute Operational
      Costs (as defined below) subject to the 25% Markup.
	
            	 
	
            	iii.	
            	“Non-recurring
      Costs” means costs incurred in connection with the manufacture of Products
      on a one-time or one-off basis and shall include, without limitation,
      costs of Product requalification with the European Space Agency (other
      than periodic requalification costs as set forth in Section 4.5), costs of
      complying with any change in specifications by the European Space Agency,
      and costs of non-routine equipment maintenance (for example, other than
      routine maintenance, including preventative maintenance, and
      calibration). 


    

     

         SECTION 4.5 Last-Time Buy Order.

     

         (a) Buyer shall have a right to place a written
last-time Firm Order for a Product (a “Last-Time Buy Order”) if Manufacturer delivers to Buyer notice of
its intention to terminate this Agreement pursuant to Section 7.2. The right of the Buyer to submit a Last-Time
Buy Order shall entitle Buyer to purchase the Products at the price in effect
for the products as of the time of Buyer’s exercise of such right.

     

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

     

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

     

    

    
    



    ARTICLE
V
CONFIDENTIALITY

     

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

     

    ARTICLE
VI
QUALITY CONTROL; PRODUCT WARRANTY; LIMITATION
OF LIABILITY

     

         SECTION 6.1 Quality Control. Manufacturer shall establish and maintain
such quality control and testing systems for the manufacture of Products for
sale by Buyer to the European Space Agency (“ESA”) as shall be required by that customer,
consistent with past practice. Manufacturer shall also designate a technically
competent employee who shall be responsible for the Manufacturer’s quality
control and testing systems and who shall be available to ESA and the other
customers of Buyer for Products to respond to technical inquiries concerning the
Products, inquiries and claims concerning the compliance or non-compliance of
Products with specifications and customer standards and inquiries and claims
concerning quality control and testing issues, including product failure, with
respect to the Products. Manufacturer shall notify Buyer as promptly as
practicable, to the extent reasonable in the circumstances, of inquiries and
claims received from customers of the Buyer as aforesaid. 

     

         SECTION 6.2 Product Warranty; Merchantability
Warranty. (a) Manufacturer
warrants to Buyer that the Products shall, at the time of delivery to Buyer in
accordance with Section 4.2: (i) conform to the Specifications therefor,
as provided in Section 2.2; (ii) be free from material defects; and
(iii) be manufactured in accordance with good manufacturing practice and
Applicable Law (such warranty being referred to as the “Product Warranty”), in each case, except to the extent any
such material defect or failure arises from an act or omission of VAT in
manufacturing for, or supplying foil resistor chips to, Buyer. 

     

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

     

         SECTION 6.3 Defective or Non-Conforming Products;
Recalls. 

     

    

    
    



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

     

         (b) Any notifications to either Party pursuant to
Section 6.3(a) shall be subject to the confidentiality
provisions of Article V above. 

     

         (c) In the event of a recall of a Product
resulting from a breach of this Agreement by Manufacturer of this Agreement or
the gross negligence of Manufacturer, Manufacturer shall be responsible for all
costs associated with such recall. Except as otherwise provided in the
immediately preceding sentence, Buyer shall be responsible for all costs
associated with the recall of a Product. 

     

         SECTION 6.4 Indemnification. (a) Subject to Section 6.5, Manufacturer shall indemnify and hold Buyer
harmless from and against any Liability, including reasonable attorney’s fees
and disbursements, arising out of any third party claim for death, injury or
damage to property resulting from (i) Manufacturer’s breach of this Agreement;
or (ii) any claim that a Product purchased from Manufacturer infringes any
intellectual property right of a third party, except to the extent such claim
relates to intellectual property transferred to Vishay Precision Group, Inc. or
any of its subsidiaries prior to the Distribution Date (as such term is defined
in the Master Separation Agreement).

     

         (b) Buyer shall indemnify and hold harmless
Manufacturer from and against any Liability, including reasonable attorneys’
fees and disbursements, arising out of any third party claim for death, injury
or damage to property resulting from use of any of the Products based upon
Buyer’s breach of this Agreement. 

     

         (c) Any Party seeking indemnification pursuant to
this Section 6.4 shall promptly notify the other Party of the
claim as to which indemnification is sought, shall afford the other Party, at
the other Party’s sole expense, the opportunity to defend or settle the claim
(in which case the indemnifying Party shall not be responsible for the
attorneys’ fees of the indemnified Party with respect such claim) and shall
cooperate to the extent reasonably requested by the other Party in the
investigation and defense of such claim; provided, however, that any settlement of any such claim that
would adversely affect the rights of the indemnified Party shall require the
written approval of such indemnified Party; and provided further that an indemnified Party shall not settle
any such claim without the written approval of the indemnifying Party.


     

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

     

    

    
    



         SECTION 6.5 Limitation of Liability. In no event shall any Party be liable for
any special, consequential, indirect, collateral, incidental or punitive damages
or lost profits or failure to realize expected savings or other commercial or
economic loss of any kind, arising out of any breach of this Agreement, including breach of
the Product Warranty, or any other obligations of any Party hereunder, or any
use of the Products, and each Party hereby knowingly and expressly waives any
claims or rights with respect thereto; provided, however, that in the event a Party is required to pay
to a third-party claimant any special, consequential, indirect, collateral,
incidental or punitive damages or lost profits or failure to realize expected
savings or other commercial or economic loss on any claim with respect to which
such Party is indemnified by the other Party pursuant to this Agreement, such
Party shall be entitled to indemnification from the other Party with respect to
such third-party special, consequential, indirect, collateral, incidental or
punitive damages or lost profits or failure to realize expected savings or other
commercial or economic loss to the extent resulting from the indemnifiable acts
or omissions of the other Party. 

     

         SECTION 6.6 Insurance. Each of the Parties shall maintain general
liability insurance covering their activities under this Agreement in accordance
with prudent and customary commercial practices, in such amounts as shall be
agreed upon from time to time by the Parties. 

     

    ARTICLE
VII
TERM OF AGREEMENT; RENEWAL TERM;
TERMINATION

     

         SECTION 7.1 Term of Agreement. Unless earlier terminated pursuant to
Section 7.2, the term of this Agreement shall be
perpetual. 

     

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

     

         SECTION 7.3 Rights Upon Termination. Following a termination of this Agreement,
(a) all further rights and obligations of the Parties under this Agreement shall
terminate, and (b) Buyer shall pay Manufacturer an amount equal to the remaining
book value (determined in accordance with accounting principles generally
accepted in the United States) of any equipment and tools purchased by
Manufacturer after the Distribution Date for the purpose of complying with this
Agreement. Notwithstanding the foregoing, the termination of this Agreement
shall not affect the rights and obligations of the Parties arising prior to such
expiration or termination; and provided further that the Parties shall not be relieved of (i)
their respective obligations to pay monies due or which become due as of or
subsequent to the date of expiration or termination, and (ii) any other
respective obligations under this Agreement which specifically survive or are to
be performed after the date of such expiration or termination, including the
provisions of Article V and Section 6.3. Any Firm Order, including a Last-Time Buy
Order, submitted prior to the expiration or termination of this Agreement shall
be filled by Manufacturer pursuant to the terms hereof even if the delivery date
is after expiration or termination.

     

    ARTICLE
VIII
DISPUTE RESOLUTION

     

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

     

    

    
    



    ARTICLE
IX
MISCELLANEOUS

     

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

     

         SECTION 9.2 Force Majeure. The Parties shall not be liable for the
failure or delay in performing any obligation under this Agreement (except
pursuant to Section 6.4) if and to the extent such failure or delay
is due to (i) acts of God; (ii) weather, fire or explosion; (iii) war, invasion,
riot or other civil unrest; (iv) governmental laws, orders, restrictions,
actions, embargoes or blockages; (v) action by any regulatory authority which
prohibits the manufacture, sale or distribution of the Products, except to the
extent due to Manufacturer’s breach of its obligations hereunder; (vi) regional,
national or foreign emergency; (vii) injunction, strikes, lockouts, labor
trouble or other industrial disturbances; (viii) shortage of adequate fuel,
power, materials, or transportation facilities; or (ix) any other event which is
beyond the reasonable control of the affected Party; provided, however, that the Party affected shall promptly
notify the other Party of the force majeure condition and shall exert its
reasonable commercial efforts to eliminate, cure or overcome any such causes and
to resume performance of its obligations as soon as possible. 

     

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

     

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

     

    

    
    



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

     

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

     

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

     

         SECTION 9.8 Set-Off. The obligation of Buyer to pay the purchase
price for Products shall be unconditional, except as provided in this Agreement,
and shall not be subject to any defense, setoff, counterclaim or similar right
against Manufacturer or any of its Affiliates that could be asserted by Buyer or
any of its Affiliates under any other contract, agreement, arrangement or
understanding or otherwise under Applicable Law. 

     

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

     

    

    
    



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

     

         If to Manufacturer, to:


     

         Vishay S.A.
     c/o Vishay Intertechnology,
Inc.
     63 Lancaster
Avenue
     Malvern, PA
19355-2120
     Attention: Dr.
Lior E. Yahalomi
     Telephone:
610-644-1300
     Facsimile:
610-889-2161 

     

         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 

     

         If to Buyer, to: 

     

         Vishay Precision Foil GmbH
     c/o Vishay Precision Group,
Inc.
     3 Great Valley
Parkway
     Malvern, PA
19355-1307
     Attention:
William M. Clancy
     Telephone: (484)-321-5300
     Facsimile:
(484)-321-5301

     

         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; (iii)
actual delivery to or receipt by the party to whom notice is being given or an
employee or agent thereof; or (iv) one (1) day after delivery to an overnight
carrier. 

     

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

     

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

     

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

     

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


     

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

     

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

     

    

    
    



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

     

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

     

     

     

    [SIGNATURE PAGE FOLLOWS]

     

    

    
    



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

     

    
      	MANUFACTURER:
	VISHAY S.A.
	 
	 
	By: 	 
	
            	Name:  
	
            	Title:  
	 
	 
	 
	BUYER:
	VISHAY PRECISION FOIL GMBH
	 
	 
	By: 	 
	
            	Name:  
	
            	Title:  


    


    

    
    



    EXHIBIT A
[***]

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

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