Intercompany Loan Agreement

INTERCOMPANY LOAN AGREEMENT


Dated December 26, 2002


between


Vishay Intertechnology, Inc., a Delaware corporation ("Vishay"), as borrower, and Siliconix Incorporated, a Delaware corporation ("Siliconix"), as lender.


ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS


Section 1.01. Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings (such meaning to be equally applicable to both the singular and plural forms of the terms defined):


"Agreement" shall mean this Intercompany Loan Agreement, as modified, supplemented, amended, restated, extended, renewed or replaced from time to time.


"Business Day" means a day of the year on which banks in the New York City, Borough of Manhattan, are not required or authorized by law to close.


"Credit Facility" means the credit facility provided for under that certain Amended and Restated Long Term Revolving Credit Agreement, dated as of June 1, 1999, among Vishay, the Permitted Borrowers, Comerica Bank and the Lenders signatory thereto, and Comerica Bank as administrative agent for the Lenders, as the same has been or may be supplemented, amended or extended from time.


"Credit Facility Default" means a Default or Event of Default under the Credit Facility, as each such term is defined in the Credit Facility.


"Loan" has the meaning specified in Section 2.01.


"Loan Documents" means and includes this Agreement and any Note.


"Loan Request" has the meaning specified in Section 2.03.


"LYONs" means the Liquid Yield Option (TM) Notes due 2021 (Zero Coupon-Subordinated) of Vishay.


"Note" means a promissory note of Vishay payable to the order of Siliconix, in substantially the form of Exhibit A hereto, evidencing Loans.


"Permitted Borrower" means any of Vishay Europe GmbH, Vishay Electronic GmbH, Pamela Verwatlungesellschaft mbH, Siliconix and any other Subsidiary of Vishay that may from time to time become a permitted borrower under the Credit Facility.


"Person" means an individual, partnership, venture, unincorporated association, organization, syndicate, corporation, limited liability company or other entity, trust and trustee, executor, administrator or other legal or personal representative, or any government or any political subdivision or agency thereof.


"Subsidiary" mean any corporation, association, joint stock company, limited liability company, partnership or business trust of which more than fifty percent (50%) of the outstanding voting stock or other ownership interests is owned either directly or indirectly by Vishay or one or more of its Subsidiaries, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by Vishay and/or its Subsidiaries.


"Tax" means any tax, levy, duty, impost or withholding, together with interest (and any taxes payable upon the amounts paid or payable) thereon and fines and penalties with respect thereto which may be imposed by reason of any violation or default with respect to the law regarding such tax.


ARTICLE II.
AMOUNTS AND TERMS OF THE LOANS


Section 2.01. The Loan. Siliconix agrees, on the terms and conditions set forth in this Agreement and in its sole discretion, to make, from time to time, loans and advances (each a "Loan") to Vishay, on a revolving basis, as follows:


(a) Maximum Amount. The principal amount of any Loan shall not exceed
$100,000,000, and no more the one Loan shall be outstanding at any time.


(b) Term. A Loan may either be payable on demand or for a term of
days, but if for a term of days such term shall not exceed five (5)
business days from the date the Loan is made. Loans shall not be
outstanding for more than twenty (20) business days in the aggregate during
any fiscal year of Siliconix. Whenever any payment hereunder or under any
Note shall be stated to be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day, and such
extension of time shall in such case be included in the computation of
interest due upon payment.


(c) Interest Rate. Each Loan shall bear interest on the outstanding
principle amount thereof at a variable rate, which shall be the higher of
(i) two times the highest rate of interest being earned by Siliconix on its
short term money market investments anywhere in the world during the period
in which the Loan is outstanding, or (ii) the highest rate of interest
being paid by Vishay or any Permitted Borrower under the Credit Facility
during the period in which the Loan is outstanding. Interest shall be
payable as provided in Section 2.02 below.


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(d) Expiration Date. In no event shall any Loan under this Agreement
be outstanding after January 2, 2005.


Section 2.02. Interest.


(a) Ordinary Interest. Vishay shall pay interest on the unpaid principal amount of any Loan from the date of such Loan until such principal amount shall be paid in full at the rate of interest applicable to such Loan. Such interest shall be due and payable upon maturity of the Loan, or if the Loan is payable upon demand, at the time that demand for payment is made on the Loan. Interest shall be calculated on the basis of a year of 360 days. Siliconix shall timely furnish Vishay with such information as Vishay shall request in order to compute the interest that would be payable under clause (i) of Section 2.01(c). Vishay shall timely furnish Siliconix with such information as Siliconix shall request in order to compute the interest that would be payable under clause (ii) of Section 2.01(c). If and to the extent Vishay has not received the information from Siliconix necessary to determine the interest rate on any Loan by the date on which the Loan is required to be repaid, then Vishay may defer payment of the interest on (but not the principal of) the Loan until two (2) Business Days after the date on which Vishay receives from Siliconix the necessary information.


(b) Default Interest. Vishay shall pay interest on the unpaid principal amount of any Loan that is not paid when due, and on the unpaid amount of all accrued but unpaid interest, fees and other amounts payable under the Loan Documents that is not paid when due, at a rate per annum equal to an additional three percent (3%) on the outstanding principal amount of the Loan above and in addition to the interest rate otherwise payable on the Loan in accordance with Section 2.01(c).


Section 2.03. Borrowing Procedures. Vishay may request a Loan by delivery to Siliconix of a request (a "Loan Request") by an authorized officer of Vishay as follows:


(a) Each Loan Request shall set forth:


(i) the amount of the proposed Loan (not to exceed the
maximum amount provided in Section 2.01(a) above);


(ii) the proposed date of such Loan, which must be a Business
Day; and


(iii) whether the request is for a Loan payable on demand or a
Loan payable after a term of days and, if the latter,
the number of days of such term, not to exceed five
business days.


(b) Each such Loan Request shall be delivered to Siliconix by 2:00 p.m. (New York City time) at least two (2) Business Days prior to the proposed date of the Loan.


(c) Each Loan Request shall represent that as of the date thereof:


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(i) both before and after such Loan, the obligations of
Vishay set forth in the Loan Documents are valid,
binding and enforceable obligations Vishay;


(ii) there is no Credit Facility Default in existence, and
none will exist upon the making of such Loan (both
before and after giving effect to such Loan); and


(iii) the representations and warranties contained the Loan
Documents are true and correct in all material respects
and shall be true and correct in all material respects
as of the making of such Loan (both before and after
giving effect to such Loan).


Section 2.04. Reimbursement and Indemnity.


(a) In addition to interest and any other fees due hereunder or under the Note, Vishay shall reimburse Siliconix for the loss of interest income on cash of Siliconix or its Subsidiary required to fund any Loan, by reason of Siliconix's having to transfer such cash to a non-interest bearing or lower interest bearing account in order to facilitate the making of the Loan or to deposit any amount received on repayment of any Loan into such an account prior to transferring the repayment amount to the regular accounts of Siliconix or its Subsidiary. Silico ...