exv10w35



 



Exhibit 10.35


FSI/METRON DISTRIBUTION AGREEMENT



TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	 	 	PAGE
	Article 1:	 	
General Conditions
	 	 	
Section 1.1
	 	Appointments and Acceptance
	 	4
	 	 	
Section 1.2
	 	Distributor Not Agent
	 	4
	 	 	
Section 1.3
	 	Product Registration
	 	4
	 	 	
Section 1.4
	 	Term
	 	5
	 	 	
Section 1.5
	 	Customer Sales
	 	5
	 	 	
Section 1.6
	 	Company Discounts
	 	5
	Article 2:	 	Responsibilities and Obligations of Distributor
	 	 	
Section 2.1
	 	Commercially Reasonable Efforts
	 	5
	 	 	
Section 2.2
	 	Terms of Sale
	 	5
	 	 	
Section 2.3
	 	Spare Parts Inventory
	 	5
	 	 	
Section 2.4
	 	No Sub-Distribution
	 	6
	 	 	
Section 2.5
	 	Distribution Functions
	 	6
	 	 	
Section 2.6
	 	Globalization
	 	7
	 	 	
Section 2.7
	 	Applications/Process Support
	 	7
	 	 	
Section 2.8
	 	Sales and Marketing Personnel
	 	7
	 	 	
Section 2.9
	 	Service Personnel
	 	8
	 	 	
Section 2.10
	 	Consideration
	 	8
	 	 	
Section 2.11
	 	Business Plan
	 	8
	 	 	
Section 2.12
	 	Periodic Performance Reviews
	 	9
	 	 	
Section 2.13
	 	Financial Data
	 	9
	 	 	
Section 2.14
	 	Books and Records
	 	9
	 	 	
Section 2.15
	 	Export Sales
	 	9
	 	 	
Section 2.16
	 	Competition
	 	9
	 	 	
Section 2.17
	 	Indemnification
	 	10
	 	 	
Section 2.18
	 	Limitation of Product Warranty: Warranty
	 	10
	 	 	
Section 2.19
	 	Insurance
	 	10
	 	 	
Section 2.20
	 	Installation Obligations
	 	10
	 	 	
Section 2.21
	 	New Product Introduction Installation Obligations
	 	11
	 	 	
Section 2.22
	 	Metrics
	 	11
	Article 3:	 	Obligation to Maintain Integrity of Company
Trademarks, Service Marks and
Brand Names
	 	 	
Section 3.1
	 	Ownership of Trademarks, Patents, and Copyrights
	 	11
	 	 	
Section 3.2
	 	Prominence of Trademarks
	 	11
	 	 	
Section 3.3
	 	Compliance with Laws
	 	12
	 	 	
Section 3.4
	 	Notification of Violations
	 	12
	 	 	
Section 3.5
	 	Assistance in the Protection of the Trademarks,
Patents, and Copyrights
	 	12
	 	 	
Section 3.6
	 	Limitation on Distributor Rights
	 	12
	 	 	
Section 3.7
	 	License Agreements
	 	12



 






 




	 	 	 	 	 	 	 
	 	 	 	 	 	PAGE
	Article 4:	 	Responsibilities and Obligations of Company
	 	 	
Section 4.1
	 	Consideration of Orders
	 	12
	 	 	
Section 4.2
	 	Sale by Company
	 	13
	 	 	
Section 4.3
	 	Shipment of Products and Returned Materials
	 	13
	 	 	
Section 4.4
	 	Technical and Sales Assistance
	 	13
	 	 	
Section 4.5
	 	Stock Obsolescence
	 	14
	 	 	
Section 4.6
	 	New Product Introduction
	 	14
	 	 	
Section 4.7
	 	Newly Acquired Products
	 	15
	 	 	
Section 4.8
	 	New Product Installation
	 	15
	 	 	
Section 4.9
	 	Product Performance
	 	15
	Article 5:	 	
Terms and Termination	 	 
	 	 	
Section 5.1
	 	Termination: Renewal
	 	15
	 	 	
Section 5.2
	 	Orders
	 	15
	 	 	
Section 5.3
	 	Default: Failure to Cure
	 	15
	 	 	
Section 5.4
	 	Default: Insolvency
	 	16
	 	 	
Section 5.5
	 	Waiver: Repurchase of Inventory
	 	16
	 	 	
Section 5.6
	 	Terms Applying after Termination
	 	16
	Article 6:	 	
Miscellaneous	 	 	 	 
	 	 	
Section 6.1
	 	Confidential Data and Information
	 	16
	 	 	
Section 6.2
	 	Financial Condition
	 	17
	 	 	
Section 6.3
	 	Affiliates of Company
	 	17
	 	 	
Section 6.4
	 	Maintenance of Records
	 	17
	 	 	
Section 6.5
	 	Irreparable Harm
	 	17
	 	 	
Section 6.6
	 	Compliance with Governmental Regulations
	 	17
	 	 	
Section 6.7
	 	Force Majeure
	 	18
	 	 	
Section 6.8
	 	Non-Assignability by Distributor
	 	18
	 	 	
Section 6.9
	 	Notice
	 	18
	 	 	
Section 6.10
	 	Construction of
Agreement
	 	18
	 	 	
Section 6.11
	 	Compliance with Laws and Regulations
	 	19
	 	 	
Section 6.12
	 	Execution
	 	19
	 	 	
Section 6.13
	 	Alternative Dispute Resolution
	 	19
	 	 	
Section 6.14
	 	Governing Law
	 	20
	 	 	
Section 6.15
	 	Waiver of Breach
	 	20
	 	 	
Section 6.16
	 	Benefit
	 	20
	 	 	
Section 6.17
	 	No Other Agreements
	 	20
	 	 	
Section 6.18
	 	Amendments
	 	20
	 	 	
Section 6.19
	 	Severability
	 	20
	 	 	
Section 6.20
	 	Solicitation of Employees
	 	20
	 	 	
Section 6.21
	 	Competing Principal
	 	20
	 	 	
Section 6.22
	 	Conflicting Provisions
	 	20
	 	 	
Section 6.23
	 	Signatures
	 	20



 






 




	 	 	 	 	 	 	 
	 	 	 	 	 	PAGE
	Exhibits:	 	 	 	 	 	 
	Exhibit A	 	Products, Pricing, Discounts and Commission
	 	 	
Part I
	 	Products and Discounts
	 	22
	 	 	
Part II
	 	Terms of Sale
	 	28
	Exhibit B	 	Distributor and Company Responsibilities
	 	 	
Part I
	 	Distributor’s Responsibilities
	 	38
	 	 	
Part II
	 	Company’s Responsibilities
	 	39
	Exhibit C	 	Spare Parts Policy
	40
	Exhibit D	 	Form of Confidentiality Agreement
	42
	Exhibit E	 	Detailed List of Inventory as of August 31, 2002	 	 



 






 



FSI / METRON DISTRIBUTION AGREEMENT



     THIS AGREEMENT is entered into on
February 28, 2003, by and between FSI
INTERNATIONAL, INC. (“Company” or “FSI”) organized and existing under the laws
of the State of Minnesota, United States of America, and METRON TECHNOLOGY
N.V., organized and existing under the laws of The Netherlands (“Distributor”).


     WHEREAS, Company designs, manufactures and sells
products for use in the
microelectronics industry;


     WHEREAS, Distributor distributes and sells products
in the
microelectronics industry and desires to serve as Company’s distributor of the
Products in Israel upon the terms and conditions set forth herein; and


     WHEREAS, Distributor and FSI entered into a
Distribution Agreement
effective as of March 31, 1998, which Distribution Agreement was amended and
restated by a Distribution Agreement dated July 10, 2000;


     WHEREAS, Company and Distributor entered into a
Transition Agreement,
which, among other things, provides for the termination of the March 31, 1998
Distribution Agreement, as amended and restated; and


     WHEREAS, FSI and Distributor wish to enter into a
separate distribution
agreement with respect to the distribution of FSI’s products in Israel.


     NOW, THEREFORE, FSI and Distributor hereby agree
as follows:


1.      GENERAL CONDITIONS



     1.1     Appointment and Acceptance.
Subject to terms and conditions contained
in this Agreement, Company hereby hires and appoints, and Distributor hereby
undertakes and accepts, an appointment as the Distributor of those FSI products
described in Exhibit A (“Products”) and spare parts related thereto (described
below) (“Spare Parts”) (collectively “Equipment”) for Israel (the “Territory”)
for the period commencing on March 1, 2003 (the “Effective Date”) for the term
set forth in Section 1.4 hereof. Distributor agrees to sell Equipment to all
customers within the Territory (“Customers”).


     1.2     Distributor Is Not the
Company’s Agent. Distributor is not an agent,
servant, employee, co-partner, or joint venture of or for the Company for any
purpose whatsoever. Distributor shall not have any right or authority to
assume or create any obligation or responsibility, expressed or implied, on
behalf of or in the name of the Company, or to bind the Company in any manner
or way whatsoever. Distributor shall perform its duties and obligations under
this Agreement as an independent contractor.


     1.3     Product
Registration. If required by local law, registration of
Products shall be in the name of the Company whenever possible. A copy of
registration documents are to be provided to the Company within ten (10) days
of receiving registration by Distributor if the registration is granted after
the effective date of this Agreement. If this Agreement is terminated, then
said registrations shall belong solely to the Company, and Distributor shall
execute any assignments, modifications or changes necessary to immediately
transfer such registration(s) to the Company.


     1.4     Term and
Scope. This Agreement shall take effect as of the Effective
Date and shall continue until the second anniversary of the Effective Date (the
“Initial Term”), unless sooner terminated as provided in Article 5. This
Agreement shall as of the Effective Date replace the terms of the Distribution
Agreement of March 31, 1998, as amended and restated as of July 10, 2000.


     1.5      Customer
Sales. Attached as Part II of Exhibit A is the Company’s
standard form of terms and conditions for direct sales by the Company to its
customers. For new sales of Products to be made within the Territory, to the
extent applicable, Distributor will use commercially reasonable efforts to
substantially conform in all material respects its terms and conditions of
sales of Products to be made by Distributor within the Territory to its
customers to those standard terms set forth in Part II of Exhibit A. Within
thirty (30) days after the date of execution of this Agreement, Company and
Distributor will agree upon the specific pass-through terms for which Metron
will be required to use reasonable efforts to conform its terms and conditions
for new sales relationships for Products within the Territory to.


 






 


     1.6     Discounts
on Spares. Except as otherwise agreed to in writing by an
authorized representative of the Company, discounts on Equipment shall be as
set forth in Exhibit A and discounts on Spare Parts shall be as set forth in
Exhibit C.


2.      RESPONSIBILITIES AND OBLIGATIONS OF
DISTRIBUTOR



     2.1     Reasonable Efforts.
Distributor shall exercise its commercially
reasonable efforts to sell Equipment in the Territory to the reasonable
satisfaction of the Company, and in connection therewith, Distributor shall
carry out all of its responsibilities and obligations set forth in this Article
2.


     2.2     Terms of
Sale. Distributor shall purchase Products and Spare Parts in
accordance with this Agreement. The purchase price to be paid by Distributor
for Equipment is the Company’s list price less the discount set forth in Part I
of Exhibit A. All prices are exclusive of all federal, state, municipal, or
other government excise, sales, use, occupational, or like taxes or duties,
tariffs, fees, or charges (“Tax(es)”) now in force or enacted in the future.
All Taxes shall be payable by Distributor. In the event FSI is required to pay
any such Tax at the time of sale or thereafter, Distributor shall promptly
reimburse FSI. Ninety percent (90%) of the purchase price is due and payable
forty-five (45) days after shipment of Equipment, and the remaining ten percent
(10%) is due and payable within five (5) days after receipt by Distributor of
amounts from its customer; provided, however, if the payment terms between
Distributor and any customer are for a longer period than such forty-five
(45)-day period, then the payment terms between Distributor and Company shall
be adjusted to such longer period for those Products delivered to such
customer. The Company may, in its absolute discretion, change the list price
for Products (provided that such change in list price is also made for the same
Products supplied to other countries outside of the Territory) upon sixty (60)
days prior written notice to Distributor; provided, however, that the Company
will hold list prices firm on quotes for Products issued in writing by
Distributor to a Customer prior to the notice of the list price increase where
the delivery date is within one hundred-eighty (180) days of the effective date
of such list price increase and so long as said Customer accepts that delivery
date and issues an order consistent with the Company’s Product lead times.
Notwithstanding anything else contained in this Section, prices charged and
discounts allowed to Distributor for Products or Spare Parts are subject to
change upon the mutual agreement of Company and Distributor. In the event of a
cancellation of an order initiated by a customer of Distributor, the Company
shall permit Distributor to cancel the purchase order for such Equipment and,
if applicable, accept the return of such Equipment freight and duty collect,
and Distributor shall remit to the Company any amounts its collects from its
customer for such cancellation.


     2.3      Spare
Parts Inventory. Distributor shall maintain a level of Spare
Parts inventory as necessary to enable Distributor to carry out its
distribution responsibilities and obligations within the Territory under this
Agreement. Distributor is expected to manage inventory on a replenishment
basis for use within the Territory based upon the installed base of Products
within the Territory. Within forty-five (45) days of signing this Agreement,
Distributor shall provide the Company with a list (transmitted electronically
via e-mail) of its inventory of Spare Parts for the Company’s current product
offerings within the Territory. Within forty-five (45) days of receiving the
report, the Company shall provide Distributor, to the extent necessary, with
the Spare Parts which in each Party’s reasonable determination are necessary to
maintain a replenishment level of Spare Parts inventory for use within the
Territory. This procedure shall not alter the method by which obsoleted parts
are to be handled pursuant to the Company’s Spare Parts policy. Thereafter,
within five (5) business days after the end of each month, Distributor shall
provide the Company with a list (transmitted electronically via e-mail) of its
inventory usage for the prior month and its inventory levels as of the end of
the month. The Company shall promptly provide those Spare Parts necessary to
replenish Distributor’s inventory intended for use within the Territory.
Following the end of each fiscal quarter commencing with the quarter ended
February 28, 2003, Distributor agrees to adjust its inventory level per the
reasonable recommendations of the Company. Upon reasonable advance notice,
Distributor shall permit the Company’s representatives to enter its premises
during normal business hours and at regular intervals to verify the inventory
level of Products and to examine parts from which a credit or warranty claim is
or had been made. The Company’s Spare Parts Policy is attached as Exhibit C.


     2.4     No
Sub-Distribution. Distributor shall not appoint sub-distributors
in the Territory or use third parties to carry out any of its responsibilities
or obligations under this Agreement without Company’s prior written consent.


     2.5     Distribution Functions.
Subject to Company’s obligations under this
Agreement, Distributor shall perform directly all ordering, handling, stocking,
selling, shipping, installation, and all warranty, application and engineering
support necessary to distribute Products effectively throughout the Territory,
shall adequately maintain agreed upon levels of Spare Parts inventory in good
and marketable condition and promptly provide replacement parts to customers.
Unless otherwise agreed in writing by the Company, Distributor will not manufacture or
distribute directly or indirectly in the Territory any equipment, products,
control systems or systems that are substantially similar to or competitive
with the Products or their applications; provided, however, that Distributor
may, with the written permission of the Company, manufacture items integral


 






 


to the Company’s equipment, products, control systems,
or systems. In addition to
those enumerated in this Agreement, Exhibit B, Part I sets forth Distributor’s
general responsibilities with respect to Product sales and service hereunder,
which responsibilities may be revised in writing by the Company from time to
time to include new products.


     2.6
     Globalization. Although Distributor’s sales responsibility is limited
to the Territory, Distributor and the Company recognize that customers within
the Territory may have facilities or business relationships outside the
Territory. Distributor agrees to actively support the Company’s global sales
and marketing efforts including sales to Distributor’s customers outside of the
Territory. Distributor acknowledges that support of this globalization effort
is part of its obligations under this Agreement.


     2.7
     Applications/Process Support. In addition to its responsibilities
above, Distributor shall provide support in the Territory by:



		
	 	     Providing fully qualified and technically trained field applications
personnel to troubleshoot and define customer processes and supply reports
and data to the Company with respect to such endeavors;
	 
	 	     Providing ongoing support directly or in cooperation with the Company
to Customers in the areas of applications development, system acceptance
and qualification, troubleshooting, data collection and process
refinement.



               To promote
more effective communications, a more efficient sales process,
and interaction between the Company and Distributor, certain personnel within
Distributor’s organizational structure may have reporting responsibilities to
an individual or position designated by the Company. It is anticipated that
the designated individual at the Company will have quarterly performance review
meetings with such Distributor personnel to discuss (i) Equipment performance
data; (ii) personnel training and certification; (iii) customer concerns or
issues; and (iv) service improvement initiatives, and Distributor shall assist
such designated individual in scheduling and conducting such meetings. The
designated individual at the Company will also be provided the opportunity to
review, comment and edit any performance reviews and incentive programs of such
individuals at Distributor.



     2.8      Sales and
Marketing Personnel. Distributor shall engage and maintain,
at its sole expense, fully qualified and technically knowledgeable sales and
marketing personnel to promote the sale and service of Equipment in the
Territory as set forth in Distributor’s Key Account Plan. Distributor’s sales
and marketing personnel shall participate with the Company in developing
product and marketing plans, in user groups and in the Company programs
relating to the marketing, sale and promotion of the Products within the
Territory. Distributor shall also participate in trade shows and exhibitions
within the Territory to promote the sale of Equipment in the Territory, in some
cases as part of the Company’s tradeshow booth. Distributor shall organize, at
its expense, Product training seminars as may be reasonably necessary to
promote effectively the sale of Products in the Territory. Distributor’s use
of non-qualified personnel to sell, market, or represent the Company in any way
is prohibited.


     2.9      Service
Personnel. Distributor’s Service Personnel must have relevant
technical background or experience. They must also meet any minimum standards
set by the Company for certification on Company’s Products to be marketed in
the Territory. The Distributor also will train its Service Personnel with
respect to Company’s Products and supply them with the proper tools, and
Distributor shall only permit level 3 certified service personnel to service
and maintain Products. Distributor also agrees to maintain adequate service
levels and to provide retraining and recertification of its personnel, and the
Company will provide assistance in establishing such levels. The Company will
from time to time provide Distributor with guidelines as to the qualifications,
certifications and abilities of Distributor’s service personnel and Distributor
is expected to follow such guidelines. In the event that the Company is
required to provide installation support to Distributor due to the
non-certification of Distributor’s personnel, Distributor shall reimburse the
Company at the Company’s then current hourly labor rate for each hour of
service (plus travel expenses) for such services.


     Distributor’s field service directors responsible for
Products in the
Territory (the “Service Directors”), in addition to the reporting relationship
within Distributor’s organization for human resources and logistics purposes
among others, shall report to the Company’s Global Service Manager or such
other individual designated by the Company (“Service Manager”). As such, the Service Manager shall have input into the
review
and evaluation of the performance of the Service Directors. In addition, the
Service Directors shall participate in no less than quarterly performance
review meetings with the Company’s Service Manager to discuss the following:
(i) Equipment performance data; (ii) personnel training and certification;


 






 


(iii)  customer concerns or issues; and (iv) service
improvement initiatives.
In addition, the Company’s Service Manager shall cooperate with Distributor’s
senior management to do joint assessments of each of the Service Directors and
discuss and agree upon such individuals strategic and tactical objectives and
incentive programs. In addition, the Company’s Service Manager shall have the
opportunity to provide input to and participate in performance reviews of all
of Distributor’s service personnel for the Products.


     2.10
     Consideration. The grant of distribution rights is the sole
consideration provided by the Company to Distributor for activities undertaken
by Distributor within the Territory pursuant to this Agreement. Distributor is
not entitled to any compensation from the Company for such activities, unless
the Company so agrees in writing. All travel and selling expenses associated
with the sale and service of Products within the Territory shall be the sole
responsibility of Distributor.


     2.11     Business
Plan. On an annual basis commencing on or about May 31,
2003, Distributor shall submit to the Company a list of its Key Accounts for
the Products and the Tactical Plans associated with those Key Accounts within
the Territory for the Company’s review and comment. Distributor and the
Company shall review and mutually agree to such Tactical Plan and list of Key
Accounts. In addition, they shall, upon the written request of the Company,
meet on no less than a semi-annual basis to review and discuss the status of
the Tactical Plans and any appropriate changes to be made to them.



		
	 	     In addition, if requested to do so by the Company, Distributor shall
provide or cause to be provided:




	 	•	 	Distributor’s current list price for the sale of
Products to its customers in the Territory.
	 
	 	•	 	Distributor’s merchandising plans and programs
developed and utilized with copies of any promotional written
materials that contain the Company name or logo.
	 
	 	•	 	Distributor’s actual and planned sales volumes, itemized by Product and
customer.
	 
	 	•	 	Any other information reasonably related to the selling and marketing of Products in the
Territory.



     2.12     Periodic
Performance Reviews. During the term of this Agreement,
Distributor shall provide the Company with a self-assessment of Distributor’s
performance at a mutually agreed upon frequency (e.g., quarterly or four (4)
month intervals) but no less than every six (6) months. Such written
performance reviews shall include, but not be limited to, the identification of
Products sold by the quantities and the selling prices or costs thereof within
the Territory, the names and locations of customers to whom such Products were
sold in the Territory, the current and near term goals of Distributor,
quarterly metric reports including inventory metrics, warranty claims, pricing
leads, customer surveys, Product performance, cycle-time/problem resolution,
installations, post-installation status reports, and any other information that
the Company may from time to time reasonably deem appropriate. If Distributor
is not meeting its performance objectives, the Company and Distributor will
mutually develop and document a performance improvement plan.


     2.13     Books
and Records. Distributor shall keep accurate records and
accounts of all transactions covered by this Agreement, such as sales by
account, purchase orders, correspondence, and Product sales, and shall permit
examination by the Company or its representatives, at any time during normal
business hours, of such accounts and transactions with customers. The
Company’s right to examine such accounts and transactions shall cease one (1)
year after the termination of this Agreement. Any requests for review made
after termination will be limited to a specific issue which the Company is
investigating. Distributor shall keep, by Product and customer location,
records of all systems installed including records relating to meantime between
failure, service records, revision levels installed, maintenance records, spare
parts records, warranty service, installation drawings, hookups, and acceptance
criteria and shall provide copies of same to the Company upon its request. In
addition, Distributor shall keep records regarding the training and
qualification of its Service Personnel.


     2.14     Export
Sales. Without the Company’s prior written consent,
Distributor shall not sell Products to customers within the Territory if
Distributor knows or reasonably could determine that such Products are intended
for sale or use outside the Territory. If Distributor acquires knowledge of
the opportunity for such a sale, Distributor shall inform the Company of such opportunity, including the identity of the prospective
customer, and provide support consistent with the Company’s globalization
strategy.


     2.15
     Competition. Distributor shall promptly report unfair competitive
acts by others and shall take such steps as are reasonably necessary to protect
the Company’s goodwill and reputation throughout the Territory; provided,
however, that


 






 


Distributor shall not have any authority to bring or defend any
legal action in the name of the Company or its affiliates without the Company’s
prior written consent. In addition, if a Product covered by this Agreement
includes OEM modules Distributor shall not purchase such modules other than
from the Company without the Company’s express written consent.


     2.16
     Indemnification. Distributor shall indemnify, defend, and hold
harmless the Company and its officers, directors, agents, employees,
shareholders, legal representatives, successors and assigns, and each of them,
from loss, liability, costs, damages, or expenses from any and all claims,
actions and suits, whether groundless or otherwise, and from and against any
and all liabilities, judgments, losses, damages, costs, charges, attorney’s
fees, and other expenses of every nature and character by reason of
Distributor’s negligent, malicious or reckless actions, inactions, or
performance hereunder or of its agents, employees, subcontractors or others
acting on its behalf. Distributor further agrees that the provisions contained
in this Section shall survive the termination or expiration of this Agreement
for a period of two (2) years.


     2.17
     Limitation of Product Warranty: Warranty. THE COMPANY MAKES NO
REPRESENTATIONS OR WARRANTIES, EXPRESSED OR IMPLIED (INCLUDING THE IMPLIED
WARRANTIES OF NONINFRINGEMENT, MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE) EXCEPT THOSE SET FORTH IN COMPANY’S THEN CURRENT PUBLISHED WARRANTY
POLICIES AND PROCEDURES APPLICABLE TO A PARTICULAR PRODUCT OR SPARE PART.
Distributor hereby accepts the Company’s then current published warranty with
respect to Equipment and with respect to applications of a Product, and agrees
that such warranty shall be extended and supported by the Distributor to
Customers in the Territory. Distributor is responsible for any modifications
to the Company’s standard warranty which are agreed to by Distributor with a
customer and shall also provide written notice of any such modifications to the
Company. Distributor also agrees to provide support for and to promptly
implement all of the Company’s upgrade and corrective actions programs. The
Company reserves the right to change the terms and conditions of the referenced
warranty at its sole option upon thirty (30) days written notice to Distributor
and any and all such changes in and to the referenced warranty shall become
effective upon expiration of the notice period. The parties hereto acknowledge
and agree that Company’s liability with respect to Equipment shall be limited
to the Company’s referenced warranty, as may be changed or modified from time
to time by the Company, in its sole discretion.


     2.18     Insurance. During the term
of this Agreement and for a period of two
(2) years thereafter, Distributor agrees to maintain policies of insurance of
the nature and amounts specified below and to provide evidence of the same upon
the Company’s request:



	 	•	 	General commercial liability insurance of at least $2.0 Million.
	 
	 	•	 	Property damage insurance of at least $2.0 Million.
	 
	 	•	 	Excess or umbrella liability insurance of at least $3.0 Million
	 
	 	•	 	Other statutory insurance provisions required by the applicable laws of the
Territory.



     2.19
     Installation Obligations. Distributor is primarily responsible for
installation, commissioning, start up and acceptance. Generally, Distributor’s
installation/service personnel are expected to be certified as to a Product.
If certified personnel are not available, the Company and Distributor agree
that at the time of the acceptance of such order a determination will be made
whether the Company will perform the installation and reduce the discount to
Distributor or if the Company will bill Distributor on an hourly basis for
support and service provided by the Company. Distributor may use
subcontractors to assist on an installation so long as they are insured, bonded
and certified to service that Company Product. Distributor accepts full
responsibility and liability for such subcontractors’ work.


     2.20      New
Product Introduction Installation Obligations. With respect to a
new product to which this Agreement applies now or in the future, Distributor
will:



	 	•	 	develop an internal plan to ensure it can support
the product;
	 
	 	•	 	commit sales personnel to participate in product
introduction programs and develop strategic and tactical sales
and market plans;
	 
	 	•	 	provide qualified sales, application, and service
personnel to be trained and/or certified with respect to the
Product; and




 










 





	 	 	 	 •       assist in the development and installation of
Company’s marketing and strategic plans.



     2.21     Metrics. Distributor and the Company shall agree upon Distributor’s
performance metrics during the term of this Agreement which are to be reflected
in the performance reviews per Section 2.12, which metrics will include not
only the Key Account and Tactical Plans referred to above, but also (i) price
attainment and lead attainment goals and incentives; (ii) customer satisfaction
surveys (similar to the Company’s own survey); (iii) inventory, service, and
installation metrics in a form acceptable to the Company; (iv) tool
performance; and (v) cycle time problem resolution.


                3.     OBLIGATION TO MAINTAIN INTEGRITY OF COMPANY TRADEMARKS,
SERVICE MARKS AND BRAND NAMES



     3.1      Ownership of Trademarks, Patents, and Copyrights. Distributor
acknowledges Company’s exclusive right, title, and interest in and to any and
all trademarks and trade names, whether or not registered, (hereinafter, such
trademarks and trade names shall be collectively referred to as “Trademarks”),
patents and patent applications (“Patents”), copyrights (“Copyrights”) and
trade secrets and know-how (“Know-How”) which Company may have at any time
created, adopted, used, registered, or been issued in the United States of
America or in any other location, and Distributor agrees that it shall not do,
or cause to be done, any acts or things contesting or in any way impairing or
tending to impair any portion of Company’s right, title, and interest in and to
the Trademarks, Patents, Copyrights, trade secrets and Know-How.


     3.2     Prominence of Trademarks. In advertising, promotions or in any other
manner so as to identify Products, Distributor shall clearly indicate Company’s
ownership of the Trademarks, Patents, and Copyrights. Distributor further
agrees that before distributing or publishing any sales literature, promotional
or descriptive materials, Company shall have the right, upon request, to
inspect, edit and approve such materials which describe or discuss Company’s
products. Distributor agrees to comply with any trademark usage guidelines
that Company provides to it in writing.


     3.3     Compliance with Laws. When referring to or using the Trademarks,
Patents, and Copyrights, Distributor shall comply with any and all applicable
laws and regulations within the Territory or the United States.


     3.4     Notification of Violations. Distributor shall promptly notify
Company, in writing, of any and all infringements, imitations, illegal use or
misuse of the Trademarks, Patents, Copyrights, and/or Know-How of which the
Distributor is aware. Distributor further agrees that it shall take action in
connection with infringement of the Trademarks, Patents, Copyrights, and/or
Know-How and otherwise attempt to prevent the infringement, imitation, illegal
use or misuse of the Trademarks, Patents, Copyrights and/or Know-How only with
Company’s prior written consent.


     3.5     Assistance in the Protection of the Trademarks, Patents, and
Copyrights. Distributor agrees, except to the extent prohibited by
applicable law, to render to Company any and all assistance reasonably
requested of it by Company in connection with the protection and/or
registration of Trademarks, Patents, and/or Copyrights, and to make promptly
available to Company Distributor’s personnel files and any other files or
records, or any other information it possesses, or to which it has access,
which may be of use to Company in connection with this Article 3.


     3.6     Limitation on Distributor Rights. Distributor agrees that at no time
during the term of this Agreement, nor at any time after this Agreement’s
expiration or termination, shall Distributor adopt, register, or use in any
manner whatsoever or permit the adoption, registration, or use without
Company’s prior written consent, any word, symbol, or combination thereof,
which in any way imitates, resembles, or is similar to any Trademarks of
Company, nor shall Distributor in any manner whatsoever infringe the rights of
Company in any Patent or Copyright.


     3.7     License Agreement. By executing this Agreement, Distributor hereby
agrees to grant and does grant to Company an exclusive, worldwide, royalty-free
license to make, have made, offer for sale, use, sell, import, duplicate,
create derivative works, distribute, perform and to display all improvements,
modifications or inventions (whether patentable or not) that Distributor has
made in the past or makes to any Product or any process implemented or capable
of being implemented on a Company Product during the period of this Agreement
and for two (2) years thereafter. During the term of this Agreement, the
Company agrees to prosecute and be responsible for the costs associated with
prosecuting any such inventions that are used by the Company.


 






 


4.      RESPONSIBILITIES AND OBLIGATIONS OF COMPANY



     4.1          Consideration of Orders. The Company shall give reasonable
consideration to Distributor’s orders for Products and shall make shipments of
accepted orders promptly in accordance with Company’s production schedule and
subject to Product manufacturing lead times. If not rejected within seven (7)
business days, all orders for Products shall be considered accepted. After
acceptance, order cancellations by Distributor are subject to Company’s
cancellation policy; provided, however, the parties recognize that there are
circumstances where it would be inequitable to impose such charges.


     4.2           Sale by the Company. The Company shall, subject to commercial
availability, offer for sale to Distributor those Products listed on Exhibit A
for resale to Customers within the Territory; provided, however, the Company
reserves the right to make (and this Agreement does not apply to) sales by the
Company of items or Equipment to a third party where the third party intends to
integrate the Company’s item, Products or Equipment into such third party’s
product and sell such integrated product in the Territory or elsewhere. The
Company will not knowingly sell Products to customers within the Territory.
Notwithstanding the preceding sentence, if the Company reasonably determines
that additional sales are desirable for the full development of the Products in
the Territory, and Distributor has demonstrated that it is unable to develop
fully the market for Products to Customers in the Territory, then the Company
may, without notice and without Distributor’s consent, sell Product in the
Territory so long as the Company does not change the compensation structure of
Distributor. The Company further reserves the right, on a Product by Product
basis, to sell or, in the Company’s sole discretion, to establish a local
presence through a joint venture, strategic alliance in specific countries or
otherwise for any one or more of Company’s Products and the Company may
unilaterally change, in a reasonable manner, the compensation structure to be
commensurate with the change in each party’s respective responsibilities in
such area or for such Product upon twelve (12) months prior notice. The
Company must obtain the consent of Distributor if it proposes a change in
Distributor’s compensation structure which is to be effective in less than
twelve (12) months. The prices and terms fixed by Company for sales to
Distributor hereunder are special prices and terms applicable only to the
Company Products intended for ultimate resale in the Territory for which
Distributor is responsible and in which Distributor is to employ all its
marketing efforts.


     4.3          Shipment of Products and Returned Materials. Unless otherwise
determined by Company, Products shall be sold ExWorks Company’s
warehouse/distribution center and title and risk of loss shall pass to
Distributor at the ExWorks point. Spare Parts or other materials will be
returned to Company pursuant to the Surface Conditioning Division’s RMA policy
at Company’s warehouse distribution center.


     4.4          Technical and Sales Assistance. The Company will assist Distributor
in promoting sales of Products within the Territory by:


          4.4.1     Providing periodic technical and sales seminars and programs
relating to the sales and service of Products, in the United States for the
training and certification of Distributor’s personnel, and the relevant
certification criteria for such personnel;



          4.4.2     Providing technical service and support, including the establishment
of procedures for the installation, design and certified training process and
the tools required for installation of Products;



          4.4.3     Providing technical service and promotional literature including any
documentation and drawings of maintenance procedures and tool configurations;



          4.4.4     Making joint sales calls and conducting Product seminars in support
of Distributor’s sales efforts in the Territory;



          4.4.5     Providing the necessary personnel, guidance and support for the
initial installation of a new Product in the Territory;



          4.4.6     Providing new Product introduction service obligations;



          4.4.7     Providing telephone support during normal business hours;



          4.4.8     Making Company service and applications personnel available for
assistance at its then prevailing hourly rates, plus travel expenses;



 






 





          4.4.9     Providing Distributor with guidelines for staffing levels and the
job descriptions and qualifications of such individuals;



          4.4.10     Providing copies to Distributor of process, technical, service and
safety bulletins;



          4.4.11     Assisting Distributor in developing its Key Account and Tactical
Plans; and



          4.4.12     Providing any other assistance that Company may deem appropriate to
promote Product sales in the Territory.



          Each party shall be responsible for the expenses (including the cost of
transportation, meals and lodging) incurred by its own employees with respect
to subparagraphs 4.4.1, 4.4.2, 4.4.4, and 4.4.5 above. In addition to this
Section 4.4, Exhibit B, Part II also describes in general the Company’s overall
responsibilities with respect to Equipment sales and service hereunder.



     4.5      Stock Obsolescence. Consistent with the intent of Section 2.3, the
Company shall issue a Quarterly Obsolescence Report which shall list by part
number the obsolescence status/category and estimate the effective date for the
Spare Parts status change. Categories of obsolescence are as follows:


          “Obsolete” means the part is obsoleted and may be returned for a credit
within the time period specified in the Obsolescence Report; or



          “Use to Deplete” means the part is to be used until there is no more stock
left.



          Company’s order administration will provide instructions for return of the
obsolete parts. Distributor will have sixty (60) days to remove obsolete items
from its inventory and to return them to the Company freight and duty collect;
provided, however, if Distributor requires such inventory to fulfill service
requirements with its customers in the Territory such sixty (60) day period
will be extended to the date on which such service requirements no longer
exist. The Company will issue, at Company’s option, a credit or refund to
Distributor for such returned inventory at one hundred percent (100%) of
Distributor’s original purchase price (excluding freight and duty paid by
Distributor when such inventory was originally purchased by Distributor).



     4.6      New Product Introduction. Company, in consultation with Distributor,
will develop comprehensive product introduction programs addressing the issues
of: (i) documentation of procedures, processes, marketing and product
specifications; (ii) installation, support and criteria; (iii) training,
certification and transition responsibility; (iv) strategic location of
demonstration units and trade show demonstrations; (v) process and process
support requirements of Distributor; (vi) identification of strategic accounts;
(vii) beta site support criteria; (viii) Spare Parts issues; and (ix)
recommended Spare Parts.


     4.7     Newly Acquired Products. If Company acquires or otherwise merges with
an existing company with a direct sales presence in Distributor’s territory,
the Company retains the right to operate those sales and services offices and
to use them to support the acquired company’s products in those areas without
compensation to Distributor notwithstanding any other provision of this
Agreement.


     4.8     New Product Installation. For the first two installations of a new
Product in the Territory, the Company will provide service and applications
personnel to assist and support Distributor, generally until Product
acceptance.


     4.9     Product Performance. Company is responsible for designing and
delivering Products capable of achieving published specifications. Company and
Distributor will follow an escalation policy (currently ISO Doc. No. SCD-1905)
to address any performance issues relating to the Product’s specifications. If
the escalation policy fails to resolve the issue, upon mutual agreement, such
failure may result in additional charges to Company.


5.0      TERMS AND TERMINATION



     5.1     Termination: Renewal. This Agreement shall take effect as of the
Effective Date and continue until terminated. The Company or Distributor may
terminate this Agreement on or after the second anniversary of the Effective
Date by giving twelve (12) months prior written notice. Neither party shall be
entitled to any compensation, indemnity, damages, or


 






 


other payment in the event of termination in accordance herewith. Each
party hereby waives the application of any law providing for such payment or
restricting termination as provided herein.


               Notwithstanding anything contained above in this Section 5.1, this
Agreement may be terminated at any time by either party with twelve (12) months
notice to the other party upon the happening of any of the following events:
(i) sale of all or substantially all of the Company, or of the Division of
Company that is supplying Products to Distributor, (ii) an acquisition
involving more than fifty percent (50%) of the assets of the Company or
Distributor; (iii) a merger or consolidation involving Distributor or the
Company in which forty percent (40%) or more of the new entity is owned by
persons other than the respective shareholders of the Company or Distributor
(as the case may be) immediately preceding the effective date of the merger; or
(iv) the sale of the Division of the Company that is supplying Products to
Distributor.



     5.2      Orders. Orders for Products accepted by Company as of the date of
termination of this Agreement which have not been delivered as of such date
shall be processed under the terms of this Agreement, subject to Distributor’s
ability to provide adequate assurance of payment to Company for such Products.
Upon termination, if requested by Company, Distributor shall assemble and
deliver to Company all records pertaining to past, current, and pending orders
for Products. Termination of this Agreement shall not affect accrued rights of
Company which by their nature are intended to survive termination. In all
events, such terminated Distributor shall work towards a transition plan to
address customer support, warranty, and spare parts.


     5.3     Default: Failure to Cure. This Agreement also may be terminated by
Company with one hundred-eighty (180) days written notice if Distributor
defaults in performance of any of its obligations under Article I, Sections 1.1
or 1.2, Articles 2, 3 or Article 6, Sections 6.1, 6.2, 6.4, 6.6 or 6.8 of this
Agreement if Distributor was first given prior written notice of the default,
an opportunity to cure such default and informed at the time of the notice of
default that failure to cure could result in termination.


     5.4     Default: Insolvency. Notwithstanding any other provision of this
Agreement, if Distributor is the subject of any judicial or non-judicial
bankruptcy or insolvency proceeding, or becomes insolvent, or if a receiver,
liquidator or administrator of the Distributor’s property or any part thereof
is appointed by a court of competent authority, or if Distributor shall make an
assignment for the benefit of creditors, Company may terminate this Agreement
by giving written notice to the Distributor, its legal representative or
assigns, as the case may be. Any termination, whether for default or
otherwise, shall not relieve Distributor from liability for amounts owed to
Company.


     5.5     Waiver: Repurchase of Inventory. Distributor hereby waives any right
or claim to damages or compensation resulting from Company’s decision not to
extend this Agreement. If this Agreement is terminated or expires, then
notwithstanding the provisions of the Company’s then-current Spare Parts Policy
or anything to the contrary in this Agreement, upon Distributor’s request,
Company shall repurchase, at Distributor’s original purchase price (excluding
freight and duty paid by Distributor when such Products and Spare Parts were
originally purchased by Distributor), those Products and Spare Parts in
Distributor’s inventory at the date of termination that are listed on Detailed
List of Inventory as of August 31, 2002 attached as Exhibit E or that had been
purchased from the Company by Distributor subsequent to August 31, 2002. Upon
Distributor’s request, Company shall also purchase from Distributor any
demonstration equipment or Products in Distributor’s possession that exists as
of the effective date of expiration or termination at their then-current
depreciated value. Any Products and Spare Parts repurchased pursuant to this
Section 5.5 shall be returned by Distributor to the Company freight and duty
collect. In addition, Company shall become responsible for all service,
warranty and other obligations of Distributor with respect to Company’s
Products following the effective date of the termination and Distributor agrees
to assign its obligations to Company thereunder subject to mutual agreement by
the parties as to an appropriate amount of compensation to be paid to Company
to assume Distributor’s obligations with its customers for Company Products.
Company reserves the right to reasonably reject any Spare Part that is not in
good working order or does not meet the original specification for the
Products, unless such failure is caused by or results from the acts or
omissions of Company which in such case Company shall not be entitled to reject
any such Spare Part. Notwithstanding anything to the contrary, Distributor
reserves the right to sell, within or outside of the Territory, any Products or
Spare Parts that are not repurchased by Company hereunder. Within fifteen (15)
days after the date of this Agreement, Distributor shall deliver to the Company
a detailed list of inventory held by Distributor as of August 31, 2002.
Distributor shall provide an updated detailed list of inventory as of February
28, 2003 promptly after such date.


     5.6      Terms Applying after Termination. If this Agreement is terminated or
expires, the terms of this Agreement shall continue to apply to the Products
then owned, possessed or controlled by Distributor. Termination of this
Agreement will not release either party from any obligation accrued prior to
the effective date of termination.


 






 


6.0      MISCELLANEOUS



          6.1           Confidential Data and Information. Distributor acknowledges that it
is to receive confidential information as defined below pursuant to Distributor
relationship with Company. Distributor shall limit its disclosure to only
those of its employees having a need to know such information and shall protect
all disclosed Confidential Information by using at least the same degree of
care that it uses to protect its own confidential information of a like nature
but in no event less than a reasonable degree of care, to prevent:




	 	•	 	the unauthorized use or dissemination to any
employee or independent contractor of Distributor without a
need to know;
	 
	 	•	 	communication with any other third party; or
	 
	 	•	 	copying or publication of the Company Confidential Information.



                         In addition, Distributor shall neither use nor disclose to any third
parties any confidential information concerning the business, affairs, or
Products of Company which Distributor may acquire during the course of its
activities under this Agreement (or any prior agreements between Company and
Distributor). If Distributor wishes to make such disclosures to prospective or
actual customers, it must first obtain Company’s written consent and all such
disclosures must be subject to a confidentiality agreement in a form acceptable
to Company. As used herein confidential information of Company shall include,
but not be limited to, any confidential or proprietary information or
compilation of information acquired by or disclosed to Distributor which
relates to the business, products, markets or research or planning activities
of Company, which is disclosed in writing and designated by Company as
“Confidential” or “Proprietary” or disclosed orally and identified as
confidential or proprietary at the time of disclosure or within twenty (20)
days thereafter. Company Confidential Information also includes inventions
made, strategies, forecasts, research and development plans of Company, Company
customer lists, supplier lists, and information about Company’s computer
systems and networks. Distributor shall take any and all necessary precautions
to prevent unauthorized disclosures by its employees including, but not limited
to, agreements with items employees and others working on its behalf that
require such individuals to keep all Company Confidential Information
confidential and assigning to Distributor all inventions conceived or reduced
to practice in performing services on behalf of Distributor. Employees of
Distributor exposed to Company Confidential Information on a regular basis or
of a highly sensitive nature will, at Company’s request, be expected to sign
the form of Agreement attached as Exhibit E and Distributor shall assist
Company in obtaining such agreements, subject to any limitations imposed by law
in the applicable country. Distributor and Company agree to protect the
confidential information of third parties that is exchanged between them in
writing, using reasonable care, but in no event less than the same degree of
care it uses to protect its own confidential information.



     6.2     Financial Condition. If Distributor defaults in any financial
obligation hereunder, or if its financial condition is inadequate in Company’s
opinion to justify extension of credit or further shipments of Products, then
Company may cancel any outstanding order for Products or delay any shipment of
Products to Distributor, unless adequate assurance of payment is provided.
Company may require execution of a security agreement or an irrevocable letter
of credit by Distributor at any time as a condition of sale of Products to
Distributor hereunder.


     6.3     Affiliates of Company. Company reserves the right, upon written
notice to Distributor to assign to any company affiliated with Company (herein
called “Company Affiliate”) responsibility for filling orders for Company
Products or Spare Parts from Distributor. Distributor agrees to place orders
with such Company Affiliate, and make payment as above in accordance with such
notice. Sales made by such Company Affiliate pursuant to this Section shall be
deemed to be sales of Company Products or Spare Parts made to Distributor
hereunder.


     6.4     Maintenance of Records. Distributor shall keep accurate accounts and
records of all transactions covered by this Agreement, and shall permit Company
or its agents at any time during normal business hours to examine such accounts
and records. Company’s right to examine such accounts and records shall cease
one (1) year after the termination of this Agreement.


     6.5     Irreparable Harm. Any breach by Distributor under Sections 2.5 or
2.16, Article 3 or Sections 6.1, 6.21 or 6.22 hereof shall be deemed to have
caused irreparable injury to Company which is not compensable by an adequate
remedy at law. In such event, Company shall be entitled, in addition to any
other remedy permitted by law, to injunctive relief in respect to such breach,
plus an award of all costs and actual attorney’s fees, incurred in enforcing
the same.


 






 


     6.6     Compliance with Government Regulations. In the event any law or
regulation is enacted in the Territory, which law or regulation commercially
frustrates Company’s purpose in entering into this Agreement or its ability to
perform hereunder, Company shall have the right, in its sole discretion, upon
sixty (60) days notice, notwithstanding any other provisions of this Agreement,
to immediately terminate this Agreement or to modify unilaterally that portion
of the Agreement which has been so affected.


     6.7     Force Majeure. Each party shall be excused from its obligation to
order or deliver Products under this Agreement in the event of national
emergency, war, acts of God, prohibitive government regulations or other causes
beyond the reasonable control of such party if such event renders performance
of this Agreement impossible. If the event renders performance impossible for
a period exceeding sixty (60) days, either party may terminate this Agreement
immediately by giving the other party written notice of its intention to do so
and Distributor shall immediately pay all sums owed to Company.


     6.8     Non-Assignability by Distributor. This Agreement may not be assigned
by Distributor, nor may any duty of obligation hereunder be delegated to any
party without the prior written consent of Company. Any permitted assignee
shall enter into a new distributorship agreement with Company upon request.


     6.9     Notice. All notices required to be given hereunder shall be deemed to
have been effectively given only when delivered personally to an officer of the
applicable party, or when first sent by facsimile transmission and confirmed by
registered mail, addressed to the applicable party at its address set forth
below, or at such other address as such party may hereafter designate as the
appropriate address for the receipt of such notice:



	 	 	 	 	 
	To the Company at:	 	
FSI International, Inc.
	 	With a copy to:
	 	 	
Attention: Dean Duffy
	 	Benno Sand
	 	 	
3455 Lyman Blvd.
	 	3455 Lyman Blvd.
	 	 	
Chaska, MN 55318
	 	Chaska, MN 55318
	 	 	
U.S.A.
	 	U.S.A.
	 	 	 	 	 
	To the Distributor at:	 	
Metron Technology N.V.
	 	With a copy to: Metron Technology Ltd.
	 	 	
Attention: Ed Segal
	 	Attention: Peter V. Leigh
	 	 	
1350 Old Bayshore Highway
	 	1350 Old Bayshore Highway
	 	 	
Suite 360
	 	Suite 360
	 	 	
Burlingame, CA 94010
	 	Burlingame, CA 94010
	 	 	
U.S.A.
	 	U.S.A.



     6.10     Construction of Agreement. This instrument and the attached Exhibits
constitutes the entire Agreement of the parties with respect to the subject
matter thereof and shall be construed in accordance with the laws of the State
of Minnesota without regard to choice of law doctrines or conflict of law
principles. The United Nations Convention on Contracts for the International
Sale of Goods will not be applicable to this Agreement or the transactions
contemplated hereunder. For purposes of resolving any issue pertaining to
conflict of laws, this Agreement shall be deemed to be fully and solely
executed, performed, and observed in the State of Minnesota. The parties
consent to personal jurisdiction in the State of Minnesota and to accept
service of process with respect to any action or proceeding brought in any
court as provided in the following sentence. Distributor and Company agree
that any action brought by either party shall be filed only in the United
States District Court for the District of Minnesota.


     6.11     Compliance with Laws and Regulations. Distributor shall comply with
all applicable laws and regulations during the course of performance of this
Agreement and in related activities. Should registration of this Agreement
with governmental authorities be required under the local laws of the
Territory, Distributor shall comply with such registration requirements and
provide proof of such compliance with Company. Distributor shall not, directly
or indirectly, engage in any acts which would constitute a violation of United
States laws and regulations, including but not limited to laws and regulations
governing exports of products or technology, the Foreign Corrupt Practices Act
and the Anti-Boycott Act.


     6.12     Execution. This Agreement shall be executed in duplicate but shall
not be binding upon Company until a copy, signed by the Distributor, is
executed by Company.


     6.13      Alternative Dispute Resolution. The parties shall first resolve any
dispute arising out of or relating to this Agreement in accordance with the
procedures specified below.


 






 


          6.13.1     The parties shall attempt in good faith to resolve any dispute
arising out of or relating to this Agreement promptly by negotiation between
executives who have authority to settle the controversy and who are at a higher
level of management than persons with direct responsibilities for
administration of this contract. Any party may give the other party written
notice of any dispute not resolved in the normal course of business. Within
fifteen (15) days after delivery of the notice, the receiving party shall
submit to the other a written response. The notice and the response shall
include (i) a statement of such party’s position and a summary of arguments
supporting the position, and (ii) the name and title of the executive who will
represent the party and any other person who will accompany the executive.
Within thirty (30) days after delivery of the disputing party’s notice, the
executives 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. All reasonable requests for information made by one party
to the other will be honored.



          6.13.2     If the matter has not been resolved within sixty (60) days of the
disputing party’s notice, or if the parties fail to meet within thirty (30)
days of such notice, either party may initiate mediation of the controversy or
claims as provided below in Section 6.13.3.



          6.13.3     If the dispute has not been resolved by negotiation as provided
above, the parties shall endeavor to settle the dispute by mediation through
JAMS/Endispute under its then current Rules at either Chaska, Minnesota or the
San Francisco, California Bay Area. The neutral third party mediator will be
selected from the JAMS/Endispute Panels of Neutrals, with the assistance of
JAMS/Endispute, unless the parties agree otherwise.



          6.13.4     All negotiations pursuant to this clause are confidential and shall
be treated as compromise and settlement negotiations for purposes of the
Federal Rules of Evidence and state rules of evidence.



          6.13.5     If the parties fail to resolve the dispute through mediation within
forty-five (45) days of the request for mediation, then either party may pursue
its remedies in Federal District Court of Minnesota.



          6.13.6     Notwithstanding the above provisions of this Section 6.13, the
parties shall not be required to attempt to negotiate or mediate the dispute if
it relates to a breach of the provisions of Sections 2.5, 2.16, 2.17, 2.18,
5.1, 5.3, 6.1, 6.21, 6.22 or Article 3 or to Distributor’s financial
obligations.



     6.14     Governing Language. The governing language of this Agreement shall
be English.


     6.15     Waiver of Breach. The failure of either party to require the
performance of any term of this Agreement or the waiver by either party of the
breach of any term of this Agreement shall not prevent a subsequent enforcement
of such term, nor be deemed a waiver of any subsequent breach.


     6.16     Benefit. This Agreement shall be binding upon the legal
representatives, successors, and assigns of Company and Distributor.


     6.17     No Other Agreements. Except as expressly contemplated in this
Agreement, there are no other agreements, oral or written, between the parties
effecting this Agreement or relating in any way to the selling or servicing of
Products. This Agreement supersedes all previous negotiations and agreements
between the parties.


     6.18     Amendments. No change or addition to any portion of this Agreement
shall be valid or binding upon either party unless mutually agreed to in
writing.


     6.19     Severability. If any provision of this Agreement is determined to be
invalid or unenforceable, the provision shall be deemed to be severable from
the remainder of this Agreement and shall not cause the invalidity of the
remainder of this Agreement.


     6.20     Solicitation of Employees. Company and Distributor agree that during
the term of the Agreement and for a period of six (6) months thereafter it, nor
its successor company, will not directly or indirectly solicit the other
party’s employees or alternatively will agree upon an appropriate amount of
compensation for each individual solicited and hired by it.


     6.21     Competing Principal. If an existing principal of Distributor becomes
a competitor of the Company within the Territory, Distributor must choose
within sixty (60) days thereafter which principal’s competing product it
intends to present and shall terminate its representation of the other
principal for product in the geographic area where it has been or is authorized
to represent both products as soon as possible but no later than six (6)
months from the date of its election. In the

 






 




event Distributor elects to continue representing a principal whose product or products competes with a
Company Product then, notwithstanding anything herein to the contrary, Company
may terminate this Agreement upon ninety (90) days written notice. Further, to
reduce the likelihood of such conflicts, Distributor will provide a quarterly
report to Company of principals of whom it is negotiating and the Company must
indicate whether or not it objects to proposed principal and, if so, the basis
for its objection shall be provided to Distributor.


     6.22     Conflicting Provisions. As between Distributor and the Company, to
the extent any inconsistency or conflict exists between the terms and
conditions of this Agreement and the terms of any exhibit attached hereto, the
terms and conditions of this Agreement shall govern.


     6.23     Signatures. This Agreement may be executed in counterparts and
facsimile signatures are considered originals.


     IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.



	 	 	 	 
	Metron Technology B.V.	
FSI International, Inc.
	 	 	 	 
	By:	/s/ Peter V. Leigh


Peter V. Leigh	
By: 	
 /s/ Benno Sand



Benno Sand
	 	 	 	 
	Its: 	 Chief Financial Officer	
Its: 	
 Executive Vice President, Business

 Development and Investor Services