Revolving Intercompany Promissory Note

REVOLVING INTERCOMPANY PROMISSORY NOTE


US $35,000,000.00 May 26, 1998
New York, New York


FOR VALUE RECEIVED, SILICONIX, INC. ("Siliconix") a Delaware corporation, by this promissory note unconditionally promises to pay to the order of VISHAY INTERTECHNOLOGY, INC. ("Vishay") a Delaware corporation or its registered assigns the principal amount of THIRTY FIVE MILLION DOLLARS ($35,000,000.00, the "Revolving Commitment") or such lesser amount as may then constitute the unpaid aggregate principal amount of the Revolving Loans (as hereinafter defined) made by Vishay to Siliconix pursuant to the terms hereof and to pay interest on the unpaid balance hereof at Vishay's Borrowing Rate (as defined below) on the 1st day of each of January, April, July and October of each year commencing July 1, 1998 and on the Maturity Date (each such date being an Interest Payment Date) all as hereafter further provided.


1. Making of Loans


(a) Subject to the terms hereof and at any time from the date hereof to the Maturity Date, Vishay agrees at any time and from time to time, to make one or more revolving loans (the "Revolving Loans") to Siliconix in an aggregate principal amount not to exceed the Revolving Commitment, during such period Siliconix may borrow, prepay and reborrow Revolving Loans.


(b) Siliconix shall give Vishay one business day's notice to its Director, Corporate Treasury of its intention to borrow a Revolving Loan, stating the amount of such borrowing and the date on which such borrowing is required. Vishay shall make such Revolving Loan available to Siliconix at the account and on the date specified by Siliconix.


(c) The Revolving Commitment shall be deemed to include the $10,000,000 previously loaned to Siliconix by Vishay pursuant to two prior loans of $5,000,000 each and upon execution and delivery of this Note the promissory notes dated 13th day of April, 1998 and the loan made to Siliconix on May 26, 1998 shall each be deemed paid in full and such promissory note and any similar paper reflecting such loans shall have no further force or effect.


2. Payments.


(a) Principal of, and any accrued and unpaid interest on, this Note shall be due and payable in full on the date to occur of May 31, 2000 or such later date as may be agreed in writing by the parties hereto (the "Maturity Date") and notified to the Agent (as hereinafter defined);


(b) interest on this Note shall accrue from the date hereof, to, but excluding, the next Interest Payment Date, and shall be payable in arrears on each Interest Payment Date. Interest not paid when due shall accrue and be added to principal on each subsequent interest payment date.


(c) if any Interest Payment Date or the Maturity Date would fall on a day that is not a Business Day (as defined below), the payment due on such Interest Payment Date or Maturity Date will be made on the next succeeding Business Day with the same force and effect as if made on the Interest Payment Date or the Maturity Date, as the case may be. "Business Day" means any day which is not a Saturday or Sunday and is not a day on which banking institutions are generally authorized or obligated to close in the City of New York;


(d) the Borrower may prepay all or any portion of this Note. All payments on this Note shall be applied first to accrued interest on this Note and then to the balance of principal on this Note;


(e) payments of principal and interest on this Note shall be made in U.S. dollars by electronic Funds transfer to Vishay's bank account #1076-000-734 at Comerica Bank, Detroit, Michigan or such other account as Vishay may designate.


(f) the obligations to make the payments provided for in this Note are absolute and unconditional and not subject to any defense, set-off, counterclaim, rescission, recoupment or adjustment whatsoever. Siliconix hereby expressly waives demand and presentment for payment, notice of non-payment, notice of dishonor, protest, notice of protest and diligence in taking any action to collect any amount called for hereunder, and shall be directly and primarily liable for the payment of all sums owing and to be owing hereon, regardless of and without any notice, diligence, act or omission with respect to the collection of any amount called for hereunder; and


(g) for the purposes of this Note, Vishay's Borrowing Rate shall mean the interest rate payable by Vishay to the Lenders (as hereinafter defined) on its borrowings, as such rate may vary from time to time.


3. Ranking of Note. Subject to Section 8 herein Siliconix, for itself, its successors and assigns, covenants and agrees that the payment of the principal of and interest on this Note is pari passu with the payment of all existing and future debt of Siliconix.


4. Covenants. Siliconix covenants and agrees with Vishay that, so long as any amount remains unpaid on this Note, unless the consent of Vishay is obtained, Siliconix shall not create, incur, or suffer to exist any other debt except in cases (i) where the holders of such other debt have duly executed any and all subordination agreements or intercreditor


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agreements reasonably acceptable to Vishay, and (ii) trade debt incurred in the ordinary course of business.


5. Events of Default.


The occurrence of any of the following events shall constitute a default (a "Default"):


(a) a default in the payment of the principal on this Note, when and as the same shall become due and payable;


(b) a default in the payment of any interest on this Note, when and as the same shall become due and payable, which default shall continue for two (2) business days after the date fixed for the making of such interest payment;


(c) a material default in the performance, or a material breach, of any of the covenants of Siliconix contained in this Note;


(d) a material default in the performance, or a material breach, of any financial coven ...