Document:

exhibit10-19.htm

    FORM OF INTELLECTUAL PROPERTY LICENSE
AGREEMENT 

     

         This Intellectual Property License Agreement (“Agreement”) is entered into as of _____________, 2010
(the “Effective Date”), by and between Vishay S.A., a [______]
(“Licensee”), and Vishay Precision Group, Inc. a
Delaware corporation ("Licensor").

     

    RECITALS:

     

         WHEREAS, Licensor is the owner of certain intellectual property formerly
owned by Licensee and used in the manufacture of strain gages (“Licensed IP”);
and 

     

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

     

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

     

    
      	A.	        	Definitions.
	 
	
            	
            	1. “Licensed IP” shall have the meaning set forth in
      the Recitals.
	 
	
            	
            	2. “Licensed Products” shall mean the strain gages specified
      in Schedule A, that were manufactured by Licensee prior to the
      Separation.
	 
	B.	
            	License Grant. Subject to the terms and conditions
      set forth in this Agreement, Licensor hereby grants to Licensee, a
      non-exclusive, irrevocable, worldwide right and license to the Licensed IP
      to make, have made, use, sell, offer for sale, export and import Licensed
      Products. Licensee may only sell and offer for sale Licensed Products to
      its customers existing as of the Effective Date.
	 
	C.	
            	Improvements. Licensee acknowledges and agrees that
      any modification, change, development, enhancement, derivative or
      improvement (collectively, “Improvements”) made by, or on behalf of, Licensee to
      the Licensed IP or Licensed Product, shall be owned exclusively by
      Licensor, and to the extent that Licensee retains any rights therein,
      Licensee irrevocably assigns all right, title and interest therein to
      Licensor. All Improvements shall be deemed Licensed IP or Licensed
      Products, as appropriate, and shall be subject to the terms of this
      Agreement.
	 
	D.	
            	Sublicensing. This Agreement may be assigned, and
      the license may be sublicensed, by Licensee solely to a direct or indirect
      wholly-owned subsidiary of Licensee that succeeds Licensee in the
      manufacture and sale of the Licensed Products; provided that Licensee
      shall be responsible for the compliance by a subsidiary granted a
      sublicense with the terms of this Agreement. Except as provided above, the
      license and this Agreement shall be non-assignable and non-sublicensable
      without the written consent of Licensor. Any purported license or
      assignment in violation of this Agreement shall be void.
  

    

    

    
    

    
      	E.	        	License Fees. For the license and rights granted
      herein, Licensee shall pay Licensor 5% of the gross amount received from
      the sale of Licensed Products, less the amount of any refunds, credits and
      allowances actually given by Licensee, and taxes and shipping cost amounts
      invoiced and paid by Licensee’s customers.
	 
	F.	 	Payment. Licensee shall pay the license fees on
      a quarterly basis, within 60 days of the end of each calendar quarter
      during the term of the Agreement, for Licensed Products sold during such
      quarter, subject to subsequent adjustment for returns and allowances, and
      provided that payment of license fees for the first and last calendar
      quarter of the term shall be paid on those sales occurring in such
      calendar quarters, on and following the Effective Date for the initial
      quarter, and on or before the termination date in the quarter in which the
      Agreement is terminated.
	 
	G.	
            	Reporting. During the term of the Agreement,
      Licensee will keep and maintain current and accurate records regarding
      sales of Licensed Products and the calculation of the amounts paid or
      payable by the Licensee to Licensor under this Agreement. Licensor will
      submit quarterly sales and revenue reports for the Licensed Product with
      each license fee payment, and such other reports as the parties may agree
      from time time. Among such other items as the parties may agree, the
      quarterly sales reports shall include sufficient detail regarding the sale
      of Licensed Products to establish the accuracy of the License Fee
      payments.
	 
	H.	
            	Records and Audit. Not more than once in any twelve (12)
      month period of the term of the Agreement, upon written request by
      Licensor, Licensee will provide the Licensor and its representative’s
      access to its books and records during Licensee’s normal business hours in
      order to verify the accuracy of the sales reports, and computations of
      amounts due and owing to the Licensor pursuant to this Agreement. In the
      event any such audit reveals that the Licensee has underpaid any amounts
      due to the Licensor pursuant to this Agreement, Licensee will promptly pay
      the deficiency.
	 
	I.	
            	Enforcement. Licensee shall cooperate fully and
      promptly with Licensor in the protection of Licensor’s rights in the
      Licensed IP, in such manner and to such extent as Licensor may reasonably
      request, and at Licensor’s expense.
	 
	
            	
            	1. Each party
      shall promptly notify the other party in writing of any actual or
      potential infringement, or any other unauthorized use of or violation of
      the Licensed IP of which it becomes aware (each an “Infringement”). Licensor may take such action as it,
      in its sole discretion, deems necessary or advisable to stop any
      Infringement. Licensee may request in writing that Licensor institute an
      action to stop an Infringement affecting the Licensed Products. If
      Licensor receives such a written request and does not institute such
      action within thirty (30) days, Licensee shall be entitled to institute
      such action as it deems necessary or advisable to stop such Infringement,
      in which Licensor shall be entitled to join; provided that Licensee shall not compromise or
      settle any claim or action regarding the Licensed IP in any manner that
      would affect the rights of Licensor without the written consent of
      Licensor, which consent shall not be unreasonably withheld or delayed. The
      party not taking the lead in any action shall cooperate fully with the
      other party at the other party’s reasonable request and expense, including
      Licensor joining a suit instituted by Licensee in accordance with this
      Section to the extent necessary for Licensee to have
  standing.

    

     

    - 2 -

     

    

    
    

    
      	
            	
            	2. Any monetary
      recovery or sums obtained in settlement of any action to stop an
      Infringement shall be allocated between Licensor and Licensee as shall be
      fair and equitable, taking into account their actual out-of-pocket costs
      and expenses, including reasonable attorneys’ fees, and the damages
      sustained by each of them. Any dispute with respect to the allocation of
      recoveries shall be resolved in accordance with the resolution procedures
      referred to in Section L.16.
	 
	J.	        	Warranties of the
      Parties. Licensor
      warrants that it has the right and power to enter into this Agreement, and
      that there are no outstanding assignments, grants, licenses, encumbrances,
      obligations or agreements, either written or oral or implied, that prevent
      it from doing so. Licensee warrants that it has the right and power to
      enter into this Agreement, and that there are no outstanding assignments,
      grants, licenses, encumbrances, obligations or agreements, either written
      or oral or implied, that prevent it from doing so.
	 
	K.	
            	WARRANTY DISCLAIMER. EXCEPT AS EXPRESSLY SET FORTH IN THIS
      AGREEMENT, NEITHER PARTY MAKES ANY OTHER REPRESENTATION, GUARANTEE OR
      WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR OTHERWISE, UNDER THIS AGREEMENT
      INCLUDING REPRESENTATIONS, GUARANTEES OR WARRANTIES AS TO THE RESULTS TO
      BE EXPECTED FROM USE OF ANY OF THE LICENSED IP, OR FROM MANUFACTURE OR
      SALE OF ANY LICENSED PRODUCT. EXCEPT AS EXPRESSLY SET FORTH IN THIS
      AGREEMENT, LICENSOR SHALL HAVE NO RESPONSIBILITY FOR THE ABILITY OR
      INABILITY OF LICENSEE TO USE THE LICENSED IP; FOR THE CLAIMS OF THIRD
      PARTIES RELATING TO ANY PRODUCTS MANUFACTURED OR SOLD BY LICENSEE; OR FOR
      ANY FAILURE IN PRODUCTION, DESIGN OR OPERATION OF ANY PRODUCT MANUFACTURED
      OR SOLD BY LICENSEE. THE LIMITATIONS OF LIABILITY CONTAINED IN THIS
      AGREEMENT ARE A FUNDAMENTAL PART OF THE BASIS OF EACH PARTY’S BARGAIN
      HEREUNDER, AND NEITHER PARTY WOULD ENTER INTO THIS AGREEMENT ABSENT SUCH
      LIMITATIONS.
	 
	L.	
            	Term / Termination.
	 
	
            	
            	1. Term.
	
            	
            	 
	
            	
            	
              (a) This Agreement
      shall commence on the Effective Date, and, so long as this Agreement has not been terminated by its
      terms, continue in full force and effect until the earlier
      of:

            
	
            	
            	 
	
            	
            	
              (i) subject to clause (b) of this
      Section K.1, the date the five (5) year period beginning on the Effective
      Date expires;

               

              (ii) the date the call option exercised
      by Licensor to acquire the strain gage business of Licensee is
      consummated; and

               

              (iii) the date Licensee discontinues the
      use of the Licensed IP.

            

    

     

    - 3 -

     

    

    
    

    
      	
            	
            	(b)
      Notwithstanding the foregoing, Licensee shall have the right to continue
      to dispose of its inventory of strain gage products existing as of any
      termination for a period of up to two (2) years from the date of
      termination of this Agreement.
	 
	
            	
            	2. Termination by
      Licensor. This
      Agreement may be terminated by Licensor by written notice of termination
      if:
	 
	
            	
            	(a) Licensee
      files a petition in bankruptcy; files a petition seeking any
      reorganization, arrangement, composition or similar relief under any law
      regarding insolvency or relief for debtors; or makes an assignment for the
      benefit of creditors; 
	 
	
            	
            	(b) a receiver,
      trustee or similar officer is appointed for the Licensee’s business or
      property;
	 
	
            	
            	(c) any
      involuntary petition or proceeding under bankruptcy or insolvency laws is
      instituted against Licensee and not stayed, enjoined, or discharged within
      sixty (60) days; or
	 
	
            	
            	(d) Licensee
      adopts a resolution for, or undertakes to effect, a discontinuance of its
      business or dissolution.
	 
	
            	
            	3. Upon the
      termination of this Agreement, all rights of Licensee granted hereunder
      shall terminate, and Licensee shall return or destroy (and certify such
      destruction in writing to Licensor if requested), at Licensor’s election,
      all embodiments of the Licensed IP. Notwithstanding the foregoing,
      Licensee shall have the right to continue to dispose of its inventory of
      Licensee Products existing as of any termination for a period of up to six
      (6) months from the date of termination of this Agreement.
	 
	
            	
            	4. All rights and
      remedies of the parties in respect of any breach of this Agreement
      occurring prior to the effective date of its termination shall survive the
      termination of this Agreement. In addition, the following provisions of
      this Agreement shall explicitly survive its termination: Section F (“Reporting”), Section J (“WARRANTY DISCLAIMER”); Section K.3; and Section L
    (“Miscellaneous”).
	 
	M.	        	Miscellaneous.
	 
	
            	
            	1. 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 and when personally
      delivered; one business day after being sent by a nationally recognized
      overnight courier; when transmitted by facsimile and actually received; or
      five (5) days after being 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):

    

     

    - 4 -

     

    

    
    

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

    

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

               

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

               

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

               

              5. Assignability. Subject to Section C, this Agreement shall be binding upon
      and inure to the benefit of the parties and their respective successors
      and permitted assigns.

               

              6. Press Releases; Public
      Announcements.
      Neither party shall issue any release or make any other public
      announcement concerning this Agreement or the transactions contemplated
      hereby without the prior written approval of the other party, which
      approval shall not be unreasonably withheld or delayed; 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.

            

    

     

    - 5 -

     

    

    
    

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

               

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

               

              9. Indemnification. Each of the parties shall indemnify,
      defend and hold harmless the other party, each of its respective current
      and former directors, officers and employees, and each of their respective
      heirs, executors, successors and assigns (“Indemnified Parties”), from and against any and all
      liabilities relating to a claim by a third party arising out of or
      resulting from any breach of, or failure to perform or comply with, any
      covenant, undertaking or obligation of, this Agreement by the indemnifying
      party. In addition, Licensee shall indemnify, defend and hold harmless
      Licensor and Licensor’s other Indemnified Parties from and against any and
      all liabilities relating to a claim by a third party arising out of or
      resulting from the manufacture, sale, or use of to the Licensed Products
      manufactured or sold by Licensee, but only to the extent caused by such
      Licensed Products, and not to the extent such liabilities arise out of or
      result from the Licensed IP, or the use thereof, in or in the manufacture
      of, the Licensed Products. All indemnification procedures and payments
      shall be governed by Sections 5.6, 5.7 and 5.8 of the Master Separation
      Agreement, as applicable. The foregoing indemnification obligations shall
      survive any termination or expiration of this Agreement. 

               

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

               

              11. Confidential
      Information.
      Licensor and Licensee 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 Purchase Agreement shall govern,
      mutatis mutandis, the confidentiality obligations of the
      parties under this Section.

            

    

     

    - 6 -

     

    

    
    

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

               

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

               

              14. Consent to
      Jurisdiction.
      Subject to the provisions referenced in Section L.16, each of the parties irrevocably
      submits to the jurisdiction of the federal and state courts located in
      Philadelphia, Pennsylvania for the purposes of any suit, action or other
      proceeding to compel arbitration, for the enforcement of any arbitration
      award or for specific performance or other equitable relief pursuant to
      Section L.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 L.1 shall be effective service of process
      for any action, suit or other proceeding with respect to any matters for
      which it has submitted to jurisdiction pursuant to this Section. Each of
      the parties irrevocably waives any objection to venue in the federal and
      state courts located in Philadelphia, Pennsylvania of any action, suit or
      proceeding arising out of this Agreement or the transactions contemplated
      hereby. 

               

              15. Specific Performance. The parties hereto agree that the
      remedy at law for any breach of this Agreement may be inadequate, and that
      any party hereto shall be entitled to specific performance in addition to
      any other appropriate relief or remedy. Such party may, in its sole
      discretion, apply to a court of competent jurisdiction for specific
      performance or injunctive or such other relief as such court may deem just
      and proper in order to enforce this Agreement. 

               

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

               

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

               

              18. Waiver of Jury Trial. SUBJECT TO SECTION L.16, EACH OF THE PARTIES HEREBY WAIVES TO
      THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY
      JURY WITH RESPECT TO ANY COURT PROCEEDING DIRECTLY OR INDIRECTLY ARISING
      OUT OF AND PERMITTED UNDER OR IN
      CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS
      AGREEMENT.

            

    

     

    - 7 -

     

    

    
    

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

               

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

            

    

     

     

    [SIGNATURE PAGES
FOLLOW]

     

     

    - 8 - 

     

    

    
    

         IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Agreement as of the Effective
Date.
 

     

    
      	
            	VISHAY S.A.
	 
	 
	 
	 
	By:       	 	 
	
            	Name:  	 	 
	
            	Title:	 	 
	 
	 
	 
	 
	
            	VISHAY PRECISION GROUP, INC.
	 
	 
	 
	 
	By:	 	 
	
            	Name:	 	 
	
            	Title:	 	 

    

     

    - 9 -

     

    

    
    

    SCHEDULE A
LICENSED PRODUCTS 

     

    
      	FAM DESIGNATION	PRODUCT
	JAUGES
      DE CONTRAINTE	JAUGE
      21L30 E V 1K N 13 G036
	JAUGES
      DE CONTRAINTE	JAUGE
      21L60 E P 1K R 24 G013
	JAUGES
      DE CONTRAINTE	JAUGE-G018
	JAUGES
      DE CONTRAINTE	JAUGE-G036
	JAUGES
      DE CONTRAINTE	JAUGE-G022
	JAUGES
      DE CONTRAINTE	JAUGE-G088
	JAUGES
      DE CONTRAINTE	JAUGE-G096
	JAUGES
      DE CONTRAINTE	JAUGE-G098
	JAUGES
      DE CONTRAINTE	JAUGE-G040
	JAUGES
      DE CONTRAINTE	JAUGE-G1020
	JAUGES
      DE CONTRAINTE	JAUGE-G1021
	JAUGES
      DE CONTRAINTE	JAUGE-G079
	JAUGES
      DE CONTRAINTE	JAUGE-G100
	JAUGES
      DE CONTRAINTE	JAUGE-G1004
	JAUGES
      DE CONTRAINTE	JAUGE-G1033
	JAUGES
      DE CONTRAINTE	JAUGE-G050exhibit10-20.htm

    FORM OF OPTION AGREEMENT 

     

    Vishay S.A., 
a
______________, 

     

    as Optionor

     

    and 

     

    Vishay Precision
Group, Inc.,
a Delaware corporation, 

     

    as Optionee

     

    Dated as of _______,
2010 

     

    

    
    

    OPTION AGREEMENT 

     

         This Option Agreement (this “Agreement”) is made and entered into effective as of
___________, 2010, by and between Vishay S.A., as optionor, having its principal
executive offices at ________________________(“Optionor) and Vishay Precision Group, Inc., a Delaware
corporation, having its principal executive offices at 3 Great Valley Parkway,
Malvern, PA 19355-1307 (“Optionee”). Optionor and Optionee each may be referred
to herein as a “Party” and collectively, as the “Parties”. 

     

         WHEREAS, the Board of Directors of Vishay Intertechnology, Inc., a
Delaware corporation and the parent of Optionor (“Vishay Intertechnology”), has determined that it is appropriate and
desirable to separate Optionee and Vishay Intertechnology into two
publicly-traded companies by separating Optionee from Vishay Intertechnology and
transferring to Optionee Vishay Intertechnology’s measurement group and foil
business (such separation, the “Separation”); 

     

         WHEREAS, in order to carry out, effect and consummate the Separation,
Optionee and Vishay Intertechnology have entered into that certain Master
Separation and Distribution Agreement, dated as of the date hereof (the
“Master Separation Agreement”); 

     

         WHEREAS, pursuant to the Master Separation Agreement, Vishay SA
transferred to Optionee all intellectual property (the “Intellectual Property”) necessary to operate the business of
manufacturing those strain gage products historically manufactured by Optionor
prior to the Separation (the “Business”);

     

         WHEREAS, the assets, other than the
Intellectual Property, necessary to operate the Business and set forth on
Exhibit A hereto constitute Excluded Assets (as such
term is defined in the Master Separation Agreement) under the Master Separation
Agreement; and

     

         WHEREAS, the business arrangements
among the parties include the grant, by Optionor to Optionee, of an option to
purchase all of Optionor’s right, title and interest in and to the Assets from
Optionor in accordance with the terms of 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: 

     

         1. Definitions. For purposes of this Agreement, the
following terms shall have the meanings specified in this Section 1:

     

              1.1 “Action” means any claim, demand, action, suit,
countersuit, 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. 

     

              1.2 “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.

     

    2 

     

    

    
    

              1.3 “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. 

     

              1.4 “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. 

     

              1.5 “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 Optionor
or members of its Group on the one hand, or Optionee 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.

     

              1.6 “Encumbrance” means, with respect to any asset, mortgages,
liens, hypothecations, pledges, charges, 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. 

     

              1.7 “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. 

     

              1.8 “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. 

     

              1.9 “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. 

     

    3 

     

    

    
    

              1.10 “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. 

     

              1.11 “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.

     

              1.12 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 “Sections” and “Exhibits” shall be deemed to mean Sections of and
Exhibits to this Agreement unless otherwise specified. 

     

         2. Option.

     

              2.1 Grant of Option. Upon the terms of this Agreement, Optionor
hereby grants to Optionee an irrevocable option (the “Option”) to purchase the Assets in accordance with
the terms of this Agreement at the purchase price (the “Purchase Price”) determined as provided for herein.

     

              2.2 Purchase Price.

     

                   2.2.1 In full and complete consideration and payment of the purchase and sale
of the Assets upon exercise of the Option as provided herein, Optionee shall pay
(or cause to be paid) to Optionor, and Optionor shall accept from Optionee, at
the Closing, the Purchase Price.

     

                   2.2.2 No later than fifteen (15) Business Days following Optionor’s receipt of an Option Notice (as
defined below) by Optionee, Optionor shall determine the Purchase Price in
accordance with the terms set forth on Exhibit B attached hereto. As soon as reasonably
practicable, but in no event later than three (3) Business Days after making
such determination, Optionor shall prepare and deliver to Optionee a calculation
of the Purchase Price, together with reasonably detailed supporting information
(the “Purchase Price Calculation”). 

     

    4 

     

    

    
    

                   2.2.3 Optionor will
provide Optionee and its accountants with access to the records and employees of
Optionor, to the extent reasonably related to the Purchase Price Calculation or
the resolution of any dispute with respect thereto. Within five (5) Business
Days after Optionee’s receipt of the Purchase Price Calculation, Optionee shall
notify Optionor in writing as to whether Optionee agrees or disagrees
with the Purchase Price Calculation, which notice, in the case of a
disagreement, shall set forth in reasonable detail the particulars of such
disagreement. In the event that Optionee does not provide a notice of
disagreement within such five 5 Business Day period, then Optionee shall be
deemed to have accepted the calculations and the amounts set forth in the
Purchase Price Calculation delivered by Optionor, which shall be final, binding
and conclusive for all purposes hereunder. If any notice of disagreement is
timely provided in accordance with this Section
2.2.3, Optionor and Optionee 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 Purchase
Price Calculation. If, at the end of such period, the Parties are unable to
resolve any disagreements as to items in the Purchase Price Calculation, 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 Purchase Price
Calculation was prepared in accordance with this Agreement and whether and to
what extent the calculation adjustment. The fees and expenses of the Auditor
shall be shared by Optionor and Optionee in inverse proportion to the relative
amounts of the disputed amounts determined in favor of Optionor and Optionee,
respectively. The determination of the Auditor shall be final, binding
and conclusive for all purposes hereunder. 

     

              2.3 Option Period. The Option shall be exercisable at
Optionee’s sole election during the period (subject to earlier termination, and
to extension, as provided herein, the “Option Period”) beginning on the date hereof and ending at
midnight, New York City time, on the five (5) year anniversary of the date
hereof; provided, however, that, in the event of the due
termination by Optionee of the License Agreement in accordance with Section
K.2(a) thereof upon the bankruptcy of Optionor (a “VPG License Termination”), the Option Period shall terminate on the
earlier of (i) the five (5) year anniversary of the date hereof and (ii) the
effective date of such VPG License Termination as set forth in the written
notice of termination given by Optionee under the License Agreement and after
expiration, without cure, of all applicable cure periods, or if such termination
is the subject of a dispute, the date of the final settlement or adjudication
confirming that Optionee’s termination was duly effected. If Optionee does not
exercise the Option in accordance with the terms and conditions of this
Agreement before the termination of the Option Period, the Option shall expire.

     

              2.4 Exercise of Option; Option
Notice. Optionee may
exercise the Option at any time by giving written notice to Optionor, together
with an executed counterpart signature page to the Purchase Agreement (defined
below), as provided herein (the “Option Notice”) during the Option Period. The date on which
Optionee shall have provided an Option Notice to Optionor is referred to herein
as the “Option Exercise Date.” The Option Notice shall specify a date for
the closing of the exercise of the Option (the “Closing”), which specified date shall be (i) in the
event Optionee intends in good faith to acquire the Assets as an operating
business and going concern, being operated substantially in the manner as the
Business has been historically operated by Optionor, no earlier than the date
that is one (1) year from the Option Exercise Date, or (ii) in the event
Optionee does not intend in good faith to acquire the Assets substantially as an
operating business and going concern, being operated substantially in the manner
as the Business has been historically operated by Optionor, no earlier than the
date that is 180 days from the Option Exercise Date. Notwithstanding the
foregoing, the parties may at any time
after the giving of an Option Notice, mutually agree to accelerate or delay the
date for the Closing of the exercise of the Option. The date on which the
Closing actually occurs is sometimes referred to herein as the “Closing Date.” 

     

    5 

     

    

    
    

              2.5 Purchase Agreement. Within thirty (30) days of the Option
Exercise Date, the Parties shall enter into an asset purchase agreement
substantially in the form attached hereto as Exhibit C, as may be modified to the extent necessary
in order to comply with Applicable Law (the “Purchase Agreement”).

     

         3. Closing. At the Closing, Optionor shall sell, assign,
transfer, convey and deliver to Optionee, and Optionee shall purchase and
receive from Optionor, all of Optionor’s right, title and interest in and to the
Assets in accordance with the terms of the Purchase Agreement. In full and
complete consideration of the purchase of the Assets, Optionee shall cause the
Purchase Price to be paid to Optionor. 

     

         4. Representations and
Warranties.

     

              4.1 Optionor hereby represents and warrants to Optionee as follows:

     

                   4.1.1 Organization. Optionor is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization and has all requisite power and authority to own, lease and operate
its properties and assets and to carry on the Business as it is now being
conducted.

     

                   4.1.2 Authorization; Binding
Agreement. Optionor has
the requisite power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by all necessary action on the part of Optionor, and no
consent, approval or (other than to execute and deliver the documents and
instruments contemplated by Section 3.2) other action on the part of Optionor is or
will be necessary to authorize the execution and delivery of this Agreement or
to consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by, and constitutes the legal, valid and
binding agreement of, Optionor, enforceable against it in accordance with its
terms.

     

                   4.1.3 No Conflict; No Consents. The execution, delivery and performance of
this Agreement, and the consummation of the transactions contemplated hereby and
thereby, do not and will not (a) violate any provisions of any of Optionor’s
organizational documents or (b) conflict with, result in a violation of,
constitute a default (with or without notice or lapse of time) under, or give
rise to a right of termination, amendment, cancellation or acceleration of any
obligation contained in, or the loss of any benefit under, any term, condition
or provision of any loan or credit agreement, note, bond, mortgage, indenture or
any other material agreement to which Optionor is a party or by which any
properties or assets of Optionor are bound, or result in the creation or
imposition of any Encumbrance, or (c) violate any Applicable Law. No consent of
any third party is or will be required for Optionor to sell and transfer the
Assets to Optionee at Closing as contemplated hereby.

     

              4.2 Optionee hereby represents and warrants to Optionor as follows:

     

    6 

     

    

    
    

                   4.2.1 Organization. Optionee is a limited liability company duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization and has all requisite power and authority to own,
lease and operate its properties and assets and to carry on its business as it
is now being conducted.

     

                   4.2.2 Authorization; Binding
Agreement. Optionee has
the requisite power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by all necessary action on the part of Optionee, and no
consent, approval or (other than to execute and deliver the documents and
instruments contemplated by Section 3.3) other action on the part of Optionee is or
will be necessary to authorize the execution and delivery of this Agreement or
to consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by, and constitutes the legal, valid and
binding agreement of, Optionee, enforceable against it in accordance with its
terms. 

     

                   4.2.3 No Conflict. The execution, delivery and performance of
this Agreement by Optionee, and the consummation of the transactions
contemplated hereby, do not and will not (a) violate any provisions of any of
Optionee’s organizational documents or (b) conflict with, result in a violation
of, constitute a default (with or without notice or lapse of time) under, or
give rise to a right of termination, amendment, cancellation or acceleration of
any obligation contained in, or the loss of any benefit under, any term,
condition or provision of any loan or credit agreement, note, bond, mortgage,
indenture or any other material agreement to which Optionee is a party or by
which any properties or assets of Optionee are bound, or result in the creation
or imposition of any Encumbrance, to the extent such would impair Optionee’s
ability to consummate the transactions contemplated by this Agreement, or (c)
violate any Applicable Law. 

     

         5. Covenants. 

     

              5.1 Conduct of the Business Before the Closing
Date. Optionor agrees
that, except as provided in this Agreement, or as consented to or approved in
writing by Optionee, during the period commencing on the date hereof and ending
on the Closing Date, if any: 

     

                   5.1.1 Optionor shall operate the Business only in the ordinary course of
business consistent with past practice or existing business plans disclosed in
writing to Optionee as of the date hereof. 

     

                   5.1.2 Optionor shall: 

     

                   (a) use commercially reasonable efforts to preserve intact its business
organization and the goodwill of the Business and maintain satisfactory
relationships with suppliers, customers and others having business relationships
with the Business; 

     

                   (b) maintain the Assets in good operating condition and repair in all
material respects (ordinary wear and tear excepted), and maintain casualty
insurance with respect to the Assets
reasonably comparable to that in effect on the date of this Agreement, with
Optionee as a named insured; 

     

    7 

     

    

    
    

                   (c) maintain its books, accounts and records in accordance with GAAP and as
are kept on the date of this Agreement; 

     

                   (d) comply in all material respects with all Applicable Laws and pay all
applicable taxes;

     

                   (e) promptly inform Optionee in writing (i) of any material deviation from
the representations and warranties set forth herein or any non-immaterial breach
of any covenant hereunder by Optionor; or (ii) if Optionor becomes aware of any
material developments with respect to the Business that could reasonably affect
the decision of Optionee to exercise the Option; and 

     

                   (f) solely for purposes reasonably related to the determination of Optionee
to exercise the Option, afford Optionee reasonable access during normal business
hours to its officers, properties, books and records relating to the Assets or
the Business. 

     

                   5.1.3 Optionor will not: 

     

                   (a) subject any Asset to an Encumbrance or dispose of, lease, license or
transfer any Asset, other than (i) sales of inventory in the ordinary course of
business or obsolete, (ii) worn out equipment sold or otherwise disposed of in a
manner consistent with past practice, and (iii) Encumbrances that will be
released as of right at Closing; 

     

                   (b) agree, whether in writing or otherwise, to do any of the foregoing.

     

         6. Force Majeure. The Parties shall not be liable for the
failure or delay in performing any obligation under this Agreement 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 of the Assets, except
to the extent due to Optionor’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. 

     

         7. Confidentiality.

     

              7.1 Confidentiality. Each Party acknowledges that Confidential
Information of the other Party and/or its Affiliates from time to time may be
furnished to the first Party and/or its Affiliates in connection with the
exercise by the Parties of their respective rights and the fulfillment of their
respective obligations under this Agreement. Each Party acknowledges that its access to the
Confidential Information of the other Party is being granted for the purpose of
exercising and protecting the first Party’s rights and interests under this
Agreement (the “Permitted Purposes”) and for no other purposes.

     

    8 

     

    

    
    

              7.2 Permitted Disclosure. Each Party agrees that its use of the
Confidential Information of the other Party will be solely for the Permitted
Purposes and that such information will be kept confidential and disclosed to no
other Person; 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 in furtherance of
effecting the Permitted Purposes, who have been informed of the confidential
nature of such information and who have been directed, and who shall have
agreed, to treat such information confidentially and to use such information
only for the Permitted Purposes and in respect of whose failure to comply with
such obligations, such Party 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 Party or any member of its
respective Group on a non-confidential basis and from a source (other than the
other Party 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, the first Party
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. 

     

              7.3 Standard of Care. Notwithstanding anything herein to the
contrary, each Party and the members of its respective Group, 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. 

     

              7.4 General. Each Party shall be entitled to obtain,
without posting any bond and without proof of actual damages, a restraining
order, injunction, specific performance or other form of equitable or
extraordinary relief for breach of the provisions of this Section 7 by the other Party, in addition to all other
remedies available at law or in equity. The Parties further agree that no
failure or delay by a Party in exercising any right, power or privilege under
this Section 7 will operate as a waiver thereof, nor will
any single or partial exercise preclude any other or further exercise of any
right, power or privilege. 

     

    9 

     

    

    
    

              7.5 Each Party shall be entitled, from time to time, to receive from the
other Party reasonable assurances and verification of compliance with the
provisions of this Section 7. 

     

              7.6 The provisions of this Section 7 shall survive any termination or expiration
of this Agreement, in whole or in part, or the expiration or termination of the
Option Period. 

     

         8. Dispute Resolution. 

     

              8.1 Agreement to Resolve
Disputes. The procedures
for discussion, negotiation and dispute resolution set forth in this
Section 8 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 (including all actions taken in furtherance of
the transactions contemplated hereby 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 one Party’s Group on the one hand and the other
Party’s 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 Sections 7.4, 8 and 9.13 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. 

     

              8.2 Dispute Resolution;
Mediation.

     

                   8.2.1 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 or the breach, termination, enforceability or validity thereof (a
“Dispute”) which has not been resolved in the normal
course of business. 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. 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. 

     

                   8.2.2 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.

     

    10 

     

    

    
    

                   8.2.3 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.  

     

                   8.2.4 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. 

     

                   8.2.5 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. 

     

                   8.2.6 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.

     

                   8.2.7 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 9.13: (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. 

     

              8.3 Arbitration.

     

                   8.3.1 Subject to Section 8.3.2, 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. 

     

    11 

     

    

    
    

                   8.3.2 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. 

     

                   8.3.3 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. 

     

                   8.3.4 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 during the course of dispute
resolution pursuant to the provisions of this Section 8.3 with respect to all matters not subject to
such Dispute. 

     

              8.4 Limitation of Liability. The provisions of this Section 8 and Section 9.13 shall be the Parties’ sole recourse for any
breach hereof. 

     

         9. Miscellaneous. 

     

              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 Optionor without the consent of Optionee, to a Wholly-Owned
Subsidiary of Optionor that succeeds to the conduct of the Business; (ii) by
Optionee without the consent of Optionor, to a Wholly-Owned Subsidiary of
Optionee; 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.

     

    12 

     

    

    
    

              9.2
Waiver of jury
trial. 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
9.2.

     

              9.3
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.

     

              9.4
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.

     

              9.5 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 Sections
9.13 and 7.4. 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
9.7 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
9.5. 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
9.5, and waives any claim that any such action, suit or proceeding brought
in any such court has been brought in an inconvenient forum.

     

              9.6 Third Party Beneficiaries. Except as expressly provided herein, this
Agreement is not intended to, and does not, provide or create any rights or
benefits of any Person other than the parties hereto.

     

              9.7 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):

     

    13

     

    

    
    

    
      	          
	If to Optionor, to:
	
            	  
	
            	Vishay S.A.
	
            	c/o 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
	
            	  
	
            	If to Optionee, to:
	
            	  
	
            	Vishay Precision Group, Inc.
	
            	3 Great Valley Parkway
	
            	Malvern, PA 19355-1307
	
            	Attention: William M. Clancy, Chief Financial Officer
	
            	Telephone: (484)-321-5300
	
            	Facsimile: (484)-321-5300
	
            	  
	
            	with a copy to:
	
            	  
	
            	Pepper Hamilton LLP
	
            	3000 Two Logan Square
	
            	Eighteenth and Arch Streets
	
            	Philadelphia, Pennsylvania 19103-2799
	
            	Attention: Barry Abelson, Esq.
	
            	Telephone: 215-981-4000
	
            	Facsimile: 215-981-4750

    

    Any notice, demand or
other communication hereunder shall be deemed given upon the first to occur of:
(i) the fifth (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. 

     

    14 

     

    

    
    

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

     

              9.9 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. 

     

              9.10 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. 

     

              9.11 Waiver of Default.

     

                   9.11.1 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. 

     

                   9.11.2 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. 

     

              9.12 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. 

     

    15 

     

    

    
    

              9.13 Specific Performance. The Parties agree that the remedy at law for
any breach of this Agreement may be inadequate, and that, as between Optionor
and Optionee, any Party by whom this Agreement is enforceable shall be entitled
to, without posting any bond and without proof of actual damages, 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 Optionor and Optionee, or the members
of their respective Groups, or prevent any violation hereof, and, to the extent
permitted by Applicable Law, as between Optionor and Optionee, each Party waives
any objection to the imposition of such relief.

     

    [SIGNATURE PAGE FOLLOWS] 

     

    16 

     

    

    
    

         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. 

     

    
      	
            	VISHAY S.A.
	
            	  
	
            	  
	
            	By:	 	 
	
            	 	Name:
	
            	 	Title:
	
            	  
	
            	  
	
            	VISHAY PRECISION GROUP,
INC.
	
            	  
	
            	  
	
            	By:	 	 
	
            	 	Name:
	
            	 	Title:

    

    

    
    

    Exhibit A 

     

    Assets 

     

    
      	PONT COMPARAISON ESI 263
	MULTIMETRE HP3456A + RACK
	PONT DE MESURE ESI 263
	ETUVE LAB 80
	ENS.NETTOYAGE ULTRASONS SFM 19
	ETUVE LAB 80 MAXI 200[
	MULTIMETRE PROGRAM.5003
	CONDITIONNEMENT JAUGES
	CONTROLE JAUGES TEFAL
	AJUSTAGE AUTO JAUGES
	MULTIMETRE PROGRAM.5007 N[560537
	ESSAIS FLUAGE ETU RANSCO
	COUPE JAUGE OUTIL FILET
	PONT D'EXTENSOMETRIE P3500
	PONT D'EXTENSOMETRIE P3500
	PONT D'EXTENSOMETRIE P3500
	8 ACCESS./MACH.DEC.BIZERBA N[885ZD29A
	COFFRET MONO VOIE 2270F
	MACHINE AJUSTAGE US
	RATELIERS ET CHARIOTS MANUT.CABLES IBM
	MODIF.MACH.AJUSTAGE ELECTROLYTIQUE
	OUTIL./JAUGES G080 BIZERBA
	AJUSTAGE ELECTROLYTIQUE
	MESURE DE FLUAGE
	MULTIMETRE 6 1/2 N°US36030069
	DISPOSITIF DE FILTRATION
	AGITATEUR IKA RE 162
	MULT.HP3456A N[7-N[2512A18426 EX76005
	MACH.NETTOYAGE PAR ULTRASONS
	GRAVURE IONIQUE EN CERCLE
	CT QUALIFICAT.FEUILLES
	PRESSE PRECOLLAGE POUR JAUGES
	MACHINE A INSOLER TYPE BM 820 DF
	MULTIMETRE 34401A N°US360115

    

    

    
    

    Exhibit B 

     

    Purchase Price Calculation 

     

    The Purchase Price will
be calculated as follows: 

     

    
      	           	P = 1.7 x R	  
	
            	
            	 
	
            	Where –	  
	 	 	 	  
	
            	     
             	P          	is the Purchase Price
	
            	
            	
            	 
	
            	 	R	is the net revenues of the Business for the
      trailing twelve month period ending on the last day of the calendar month
      preceding the Option Exercise
Date.

    

    

    
    

    Exhibit C 

     

    Purchase Agreement 

     

    See attached.

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