Exhibit 10.1


 


SUBSCRIPTION AGREEMENT


 


This
Subscription Agreement (this “Agreement”) is dated as of May 26, 2004,
among Metron Technology N.V., a corporation organized under the laws of The
Netherlands (the “Company”), and the purchasers identified on the signature
pages hereto (each, including its successors and assigns, a “Purchaser”
and collectively the “Purchasers”).


 


WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to
Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”)
and Rule 506 promulgated thereunder, the Company desires to issue and sell to
each Purchaser, and each Purchaser, severally and not jointly, desires to
purchase from the Company, securities of the Company as more fully described in
this Agreement.


 


WHEREAS, (a)
the Debentures and the Warrants are offered solely to the Purchasers, and they
are not, and have not been, offered to persons or entities who or which are
established, domiciled or have their usual residence in The Netherlands, (b)
the offering of the Debentures and the Warrants, this Agreement and any
documents announcing the offering comply with the laws and regulations of the
country and/or state where the Purchasers are established, domiciled or have
their usual residence, and (c) the Company has submitted a statement that the
laws and regulations referred to under (b) are complied with, to the Authority
for the Financial Markets (the “Autoriteit Financiële Markten”) prior to
entering into this Agreement.


 


NOW, THEREFORE,
IN CONSIDERATION of the mutual covenants contained in this Agreement, and for
other good and valuable consideration the receipt and adequacy of which are
hereby acknowledged, the Company and each Purchaser agrees as follows:


 


ARTICLE I


DEFINITIONS


 


1.1           Definitions.  In addition to the terms defined elsewhere
in this Agreement: (a) capitalized terms that are not otherwise defined herein
have the meanings given to such terms in the Debentures (as defined herein),
and (b) the following terms have the meanings indicated in this Section 1.1:


 


“Actual Minimum” means, as of any date, the maximum aggregate
number of shares of Common Stock then issued or potentially issuable in the
future pursuant to the Transaction Documents, including any Underlying Shares
issuable upon exercise or conversion in full of all Warrants and Debentures,
ignoring any conversion or exercise limits set forth therein, and assuming all
interest thereon is paid in shares of Common Stock and any previously
unconverted Debentures are held until the 48th month anniversary of
the date of issuance of the Debentures.


 


“Affiliate” means any Person that, directly or indirectly,
through one or more intermediaries, controls or is controlled by or is under
common control with a Person, as such terms are used in and construed under
Rule 144 under the Securities Act.


 


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“Capital
Shares” means the Common Stock and any shares of any other class of common
stock whether now or hereafter authorized, having the right to participate in
the distribution of earnings and assets of the Company.


 


“Capital
Shares Equivalents” means any securities, rights or obligations that are
convertible into or exchangeable for or give any right to subscribe for or
purchase, directly or indirectly, any Capital Shares of the Company or any
warrants, options or other rights to subscribe for or purchase, directly or
indirectly, Capital Shares or any such convertible or exchangeable securities.


 


“Closing” means the closing of the issuance of the Securities
pursuant to Section 2.1.


 


“Closing Date” means the Trading Day when all of the Transaction
Documents have been executed and delivered by the applicable parties thereto,
and all conditions precedent to the Purchasers’ obligations to pay the
Subscription Amount have been satisfied or waived.


 


“Closing Price”
shall mean $3.1360, subject to adjustment for reverse and forward stock
splits, stock dividends, stock combinations and other similar transactions of
the Common Stock that occur after the date of this Agreement and prior to the
Closing Date.


 


“Commission” means the Securities and Exchange Commission.


 


“Common Stock” means the common shares of the Company under the
laws of The Netherlands, par value (based on application of Section 2:67c of
the Netherlands Civil Code) EUR 0.44 per share, and any
securities into which such common shares shall hereinafter have been
reclassified.


 


“Company Counsel” means Cooley Godward LLP.


 


“Debentures” means the 6.5% Convertible Debentures due 48 months
from their date of issuance, unless otherwise set forth therein, issued by the
Company to the Purchasers hereunder, in the form of Exhibit A.


 


“Disclosure Schedules” shall have the meaning ascribed to such
term in Section 3.1 hereof.


 


“Effective Date” means the date the initial Registration
Statement filed by the Company pursuant to the Registration Rights Agreement is
first declared effective by the Commission.


 


“Exchange Act” means the Securities Exchange Act of 1934, as
amended.


 


“Exempt Transaction” shall have the meaning ascribed to such
term in Section 4.7 hereof.


 


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“FW” means Feldman Weinstein LLP with offices at 420 Lexington
Avenue, Suite 2620, New York, New York 10170-0002.


 


“GAAP” shall have the meaning ascribed to such term in Section
3.1(h) hereof.


 


“Liens” shall have the meaning ascribed to such term in Section
3.1(a) hereof.


 


“Losses” means any and all losses, claims, damages, liabilities,
settlement costs and expenses, including without limitation costs of
preparation and reasonable attorneys’ fees.


 


“Material Adverse Effect” shall have the meaning assigned to
such term in Section 3.1(b) hereof.


 


“Netherlands Counsel” means NautaDutilh.


 


“Person” means an individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof)
or other entity of any kind.


 


“Principal Market” means the NASDAQ National Market, American Stock
Exchange, the New York Stock Exchange, or the NASDAQ Small-Cap Market,
whichever is at the time the principal trading exchange or market for the
Common Stock, based upon share volume.


 


“Proxy” means the Company’s definitive proxy statement on
Schedule 14A (as filed with the Commission) for the Company’s 2004 annual
meeting of shareholders, scheduled to be held not later than December 31, 2004.


 


“Proceeding” means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened.


 


“Registration Rights Agreement” means the Registration Rights
Agreement, dated the date hereof, among the Company and the Purchasers, in the
form of Exhibit B.


 


“Required Approvals” shall have the meaning ascribed to such
term in Section 3.1(e) hereof.


 


“Required Minimum” means, as of any date, the maximum aggregate
number of shares of Common Stock then issued or potentially issuable in the
future pursuant to the Transaction Documents, including any Underlying Shares
issuable upon exercise or conversion in full of all Warrants and Debentures,
ignoring any conversion or exercise limits set forth therein, and assuming that
all interest is paid in shares of Common Stock and any previously unconverted
Debentures are held until the 48 month anniversary of its date of issuance or,
if earlier, until maturity, and the VWAP at all times on and after the date of
determination equals 90% of the actual VWAP on the Trading Day immediately
prior to the date of determination.


 


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“Rule 144” means Rule 144 promulgated by the Commission pursuant
to the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.


 


“SEC Reports” shall have the meaning ascribed to such term in
Section 3.1(h) hereof.


 


“Securities” means the Debentures, the Warrants and the
Underlying Shares.


 


“Securities Act” means the Securities Act of 1933, as amended.


 


“Shareholder Approval” means such approval as may be required by
the applicable rules and regulations of the Principal Market (or any successor
entity) from the shareholders of the Company with respect to the transactions
contemplated by the Transaction Documents, including (i) the issuance of all of
the Underlying Shares and shares of Common Stock issuable upon exercise of the
Warrants and any additional shares of Common Stock that become issuable upon
the conversion or exercise of outstanding warrants or debentures of the Company
as a result of the issuance of the Warrants and the Debentures in excess of
19.999% of the Company’s issued and outstanding Common Stock on the Closing
Date and (ii) the issuance to any single Purchaser of Debentures or Warrants
that results in a “change of control” of the Company for purposes of Rule
4350(i)(l)(B) of the Nasdaq Listing Standards.


 


“Subscription Amount” means, as to each Purchaser, the amount
set forth below such Purchaser’s signature block on the signature pages hereto
and next to the heading “Subscription Amount” in United States dollars and in
immediately available funds.


 


“Subsidiary” means any operating subsidiary of the Company.


 


“Trading Day” means any day during which the Principal Market
shall be open for business.


 


“Transaction Documents” means this Agreement, the Debentures,
the Warrants, the Registration Rights Agreement and any other documents or
agreements executed in connection with the transactions contemplated hereunder.


 


“Underlying Shares” means the shares of Common Stock issuable
upon conversion of the Debentures and upon exercise of the Warrants and issued
and issuable in lieu of the cash payment of interest on the Debentures.


 


“Underlying Shares Registration Statement” or “Registration
Statement” means a registration statement meeting the requirements set
forth in the Registration Rights Agreement and covering the resale of the
Underlying Shares by each Purchaser as provided for in the Registration Rights
Agreement.


 


“VWAP” means, for any date, the price determined by the first of
the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Principal


 


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Market, the daily volume weighted average
price of the Common Stock for such date (or the nearest preceding date) on the
Principal Market on which the Common Stock is then listed or quoted as reported
by Bloomberg Financial L.P. (based on a Trading Day from 9:30 a.m. Eastern Time
to 4:02 p.m. Eastern Time); (b) if the Common Stock is not then listed or
quoted on a Principal Market and if prices for the Common Stock are then quoted
on the OTC Bulletin Board, the volume weighted average price of the Common Stock
for such date (or the nearest preceding date) on the OTC Bulletin Board;
(c)  if the Common Stock is not then listed or quoted on the OTC Bulletin
Board and if prices for the Common Stock are then reported in the “Pink Sheets”
published by the National Quotation Bureau Incorporated (or a similar
organization or agency succeeding to its functions of reporting prices), the
most recent bid price per share of the Common Stock so reported; or (d) in
all other cases, the fair market value of a share of Common Stock as determined
by an independent appraiser selected in good faith by the holders of a majority
of the principal amount of Debentures then outstanding and reasonably
acceptable to the Company.


 


“Warrants” means collectively the Common Share Warrants, in the
form of Exhibit C delivered to the Purchasers at the Closing in
accordance with Section 2.2 hereof, with a term of exercise of 5 years.


 


“Warrant Shares” means the shares of Common Stock issuable upon
exercise of the Warrants.


 


ARTICLE II


PURCHASE AND SALE


 


2.1           
Closing.  On the Closing Date,
upon the terms and subject to the conditions set forth herein, the Company
agrees to issue, and the Purchasers agree to subscribe for in the aggregate,
severally and not jointly,  up
to $6,000,000 of the Debentures, together with the Warrants.  Each Purchaser shall deliver to, or as
directed by, the Company via wire transfer or a certified check immediately
available funds equal to their Subscription Amount and the Company shall
deliver to such Purchaser a Debenture  
evidencing a principal amount equal to such Purchaser’s Subscription
Amount indicated below such Purchaser’s name on the signature page of this
Agreement and the other items set forth in Section 2.2 issuable at the
Closing.  Upon satisfaction of the conditions
set forth in Section 2.2, the Closing shall occur at the offices of FW, or such
other location as the parties shall mutually agree.


 


2.2           Closing Conditions.  Upon satisfaction or waiver by the party
sought to be benefited thereby of the conditions set forth in this Section 2.2,
the Closing shall occur.


 


(a) At or prior to the Closing, the Company shall deliver or cause to
be delivered to each Purchaser the following:


 


(i)            a
Debenture evidencing a principal amount equal to the Subscription Amount indicated
below such Purchaser’s name on the signature page of this Agreement, registered
in the name of such Purchaser;


 


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(ii)           (A) a Warrant
registered in the name of such Purchaser to purchase up to a number of shares
of Common Stock equal to 20% of such Purchaser’s Subscription Amount divided by
the Closing Price and an exercise price per Warrant Share equal to the greater
of (x) 115% of Closing Price and (y) $3.79, both subject to adjustment therein,
and (B) a Warrant to purchase up to a number of shares of Common Stock equal to
20% of such Purchaser’s Subscription Amount divided by the Closing Price and an
exercise price per Warrant Share equal to the greater of (x) 125% of the
Closing Price and (y) $3.79, both subject to adjustment therein;


 


(iii)          a
legal opinion of Company Counsel, in the form of Exhibit D attached
hereto, addressed to the Purchasers;


 


(iv)          a
legal opinion of Netherlands Counsel, in the form of Exhibit E attached
hereto, addressed to the Purchasers;


 


(v)           the
Registration Rights Agreement duly executed by the Company;


 


(vi)          this
Agreement duly executed by the Company; and


 


(vii)         the
written voting agreements of Entegris, Inc., FSI International, Inc., Edward D.
Segal, Broadview Associates and Royce Associates to vote all Common Stock owned
by each of them as of the record date for the annual meeting of shareholders of
the Company in favor of the proposal described in the Proxy with respect to the
Shareholder Approval.


 


(b)           At
or prior to the Closing, each Purchaser shall deliver or cause to be delivered
to the Company the following:


 


(i)            this
Agreement duly executed by such Purchaser;


 


(ii)           such
Purchaser’s Subscription Amount; and


 


(iii)          the
Registration Rights Agreement duly executed by such Purchaser.


 


(c)           All
representations and warranties of the other party contained herein shall remain
true and correct as of the Closing Date and all covenants of the other party
shall have been performed;


 


(d)           There
shall have been no Material Adverse Effect (as defined in Section 3.1(b)
hereof) with respect to the Company since the date hereof;


 


(e)           From
the date hereof to the Closing Date, trading in the Common Stock shall not have
been suspended by the Commission (except for any suspension of trading of
limited duration agreed to by the Company, which suspension shall be terminated
prior to the Closing), and, at any time prior to the Closing Date, trading in
securities generally as reported by Bloomberg Financial Markets shall not have
been suspended or limited, or


 


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minimum prices
shall not have been established on securities whose trades are reported by such
service, or on the Principal Market, nor shall a banking moratorium have been
declared either by the United States or New York State authorities, nor shall
there have occurred any material outbreak or escalation of hostilities or other
national or international calamity of such magnitude in its effect on, or any
material adverse change in, any financial market which, in each case, in the
reasonable judgment of the Purchasers, makes it impracticable or inadvisable to
subscribe for the Debentures at the Closing.


 


(f)            The
Company shall have obtained unconditional approval of the transactions
contemplated by the Transaction Documents from the Principal Market or
Shareholder Approval.


 


ARTICLE III


REPRESENTATIONS AND WARRANTIES


 


3.1           Representations and
Warranties of the Company.  Except:
as set forth under the corresponding section of the disclosure schedules
delivered to the Purchasers concurrently herewith (the “Disclosure Schedules”)
which Disclosure Schedules shall be deemed a part hereof, the Company hereby
makes the representations and warranties set forth below to each Purchaser.


 


(a)           Subsidiaries.  Except as set forth in the SEC Reports, the
Company has no direct or indirect Subsidiaries.  Except for employee/director stock options, the Company owns,
directly or indirectly, all of the capital stock or other equity interests of
each Subsidiary free and clear of any lien, charge, security interest,
encumbrance, right of first refusal or other restriction (collectively, “Liens”),
and all the issued and outstanding shares of capital stock of each Subsidiary
are validly issued and are fully paid, non-assessable and free of preemptive
and similar rights.


 


(b)           Organization
and Qualification.  Each of the
Company and the Subsidiaries is an entity duly incorporated or otherwise
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization (as applicable), with the
requisite power and authority to own and use its properties and assets and to
carry on its business as currently conducted. 
Neither the Company nor any Subsidiary is in violation of any of the provisions
of its respective certificate or articles of incorporation or association,
bylaws or other organizational or charter documents.  Each of the Company and the Subsidiaries is duly qualified to do
business and is in good standing as a foreign corporation or other entity in
each jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary, except where the failure to be
so qualified or in good standing, as the case may be, would not, individually
or in the aggregate: (i) materially adversely affect the legality, validity or
enforceability of any Transaction Document, (ii) have or result in or be
reasonably likely to have or result in a material adverse effect on the results
of operations, assets, prospects, business or condition (financial or
otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii)
materially adversely impair the Company’s ability


 


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to perform fully on a timely basis its obligations under any of the
Transaction Documents (any of (i), (ii) or (iii), a “Material Adverse Effect”).


 


(c)           Authorization;
Enforcement.  The Company has the
requisite corporate power and authority to enter into and to consummate the
transactions contemplated by each of the Transaction Documents and otherwise to
carry out its obligations hereunder or thereunder.  The execution and delivery of each of the Transaction Documents
by the Company and the consummation by it of the transactions contemplated
hereby or thereby have been duly authorized by all necessary action on the part
of the Company and no further consent or action is required by the Company
other than Required Approvals.  Each of
the Transaction Documents has been (or upon delivery will be) duly executed by
the Company and, when delivered in accordance with the terms hereof, will
constitute the valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws affecting
creditors’ rights and remedies generally and general principles of equity.  Neither the Company nor any Subsidiary is in
violation of any of the provisions of its respective certificate or articles of
incorporation, by-laws or other organizational or charter documents.


 


(d)           No
Conflicts.  The execution, delivery
and performance of the Transaction Documents by the Company and the
consummation by the Company of the transactions contemplated thereby do not and
will not: (i) conflict with or violate any provision of the Company’s or any
Subsidiary’s certificate or articles of incorporation or association, bylaws or
other organizational or charter documents, or (ii) subject to obtaining the
Required Approvals, conflict with, or constitute a default (or an event that
with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation (with
or without notice, lapse of time or both) of, any agreement, credit facility,
debt or other instrument (evidencing a Company or Subsidiary debt or otherwise)
to which the Company or any Subsidiary is a party or by which any property or
asset of the Company or any Subsidiary is bound or affected, or (iii) result,
in a violation of any law, rule, regulation, order, judgment, injunction,
decree or other restriction of any court or governmental authority to which the
Company or a Subsidiary is subject (including Dutch, U.S. federal and state
securities laws and regulations and any other Dutch laws and regulations), or
by which any property or asset of the Company or a Subsidiary is bound or
affected; except in the case of each of clauses (ii) and (iii), such as would
not, individually or in the aggregate, reasonably be expected to have or result
in a Material Adverse Effect.


 


(e)           Filings,
Consents and Approvals.  Neither the
Company nor any Subsidiary is required to obtain any consent, waiver,
authorization or order of, give any notice to, or make any filing or
registration with, any court or other Dutch, U.S. federal, state, local or
other governmental authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction Documents, other
than (i) the filings required under Section 4.8, (ii) the filing with
the Commission of the Underlying Shares Registration Statement, (iii) the
notice and/or application(s) to each applicable Principal Market for the
issuance and sale of the Debentures and Warrants and the listing of the
Underlying Shares for trading thereon in the time and


 


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manner
required thereby, (iv) the filing of Form D with the Commission and applicable
Blue Sky filings, (v) notice filings with the Dutch Authority for the Financial
Markets (“Authoriteit
Financiële Markten”) pursuant to Section 46b of the Act on the
Supervision of the Securities Trade 1995 (“Wet toezicht effectenverkeer 1995”)
(collectively, the “Required Approvals”), (vi) the depositing of the
resolution of the Supervisory Board in connection with, amongst others, the
issuance of the Debentures and the Warrants with the Commercial Registry of the
competent Chamber of Commerce and Industries within 8 days after the date of
such resolution, (vii) the updating of the amount of the issued capital (“geplaatst
kapitaal”) and of the paid-up capital (“gestort kapitaal”) of the
Company with the Commercial Registry of the competent Chamber of Commerce and
Industries upon the issuance of any Underlying Shares, and (viii) the consent
of shareholders as discussed in the Proxy and as set forth in Section 4.5
hereof.


 


(f)            Issuance
of the Securities.  The Securities
are duly authorized and, when issued and paid for in accordance with the
applicable Transaction Documents, will be duly and validly issued, fully paid
and non-assessable, free and clear of all Liens (other than any Liens imposed
by action of the Purchasers).  The Company
has reserved from its authorized share capital (“maatschappelijk kapitaal”) a
number of shares of Common Stock for issuance of the Underlying Shares at least
equal to the Required Minimum on the date hereof.  The Company has not, and to the knowledge of the Company, no
Affiliate of the Company has sold, offered for sale or solicited offers to buy
or otherwise negotiated in respect of any security (as defined in Section 2 of
the Securities Act) that would be integrated with the offer or sale of the
Securities in a manner that would require the registration under the Securities
Act of the sale of the Securities to the Purchasers, or that would be
integrated with the offer or sale of the Securities for purposes of the rules
and regulations of any Principal Market.


 


(g)           Capitalization.  The number of shares and type of all
authorized, issued and outstanding capital stock of the Company is set forth in
the Disclosure Schedules attached hereto. 
Except for rights that have been waived, no securities of the Company
are entitled to preemptive or similar rights, and no Person has any right of
first refusal, preemptive right, right of participation, or any similar right
to participate in the transactions contemplated by the Transaction
Documents.  Except as a result of the
purchase and sale of the Securities and except securities issued or issuable
pursuant to any stock option plan, share purchase plan, or other similar equity
incentive plan duly adopted by a majority of the non-employee members of the
Supervisory Board of the Company or a majority of the members of a committee of
non-employee directors established for such purpose, there are no outstanding
options, warrants, script rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities, rights or obligations convertible
into or exchangeable for, or giving any Person any right to subscribe for or
acquire, any shares of Common Stock, or contracts, commitments, understandings
or arrangements by which the Company or any Subsidiary is or may become bound
to issue additional shares of Common Stock, or securities or rights convertible
or exchangeable into shares of Common Stock. 
The issuance and sale of the Securities will not obligate the Company to
issue shares of Common Stock or other securities to any Person (other than the
Purchasers) and will not result in a right of any holder of Company securities
to adjust the exercise, conversion, exchange or reset price


 


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under such securities. All of the outstanding shares of capital stock
of the Company are validly issued, fully paid and nonassessable, have been
issued in compliance with all federal and state securities laws, and none of
such outstanding shares was issued in violation of any preemptive rights or
similar rights to subscribe for or purchase securities.  No further approval or authorization of the
Board of Directors of the Company is required for the issuance and sale of the
Securities.  Except as disclosed in the
SEC Reports, there are no stockholders agreements, voting agreements or other
similar agreements with respect to the Company’s capital stock to which the
Company is a party or, to the knowledge of the Company, between or among any of
the Company’s stockholders.


 


(h)           SEC
Reports; Financial Statements.  The
Company has filed all reports required to be filed by it under the Exchange
Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years
preceding the date hereof (or such shorter period as the Company was required
by law to file such material) (the foregoing reports since May 31, 2002 are
collectively referred to herein as the “SEC Reports” and, together with
the Schedules to this Agreement, the “Disclosure Materials”) on a timely
basis or has received a valid extension of such time of filing and has filed
any such SEC Reports prior to the expiration of any such extension.  The Company has identified and made
available to the Purchasers a copy of all SEC Reports filed within the 10 days
preceding the date hereof.  As of their
respective dates, the SEC Reports complied in all material respects with the
requirements of the Securities Act and the Exchange Act and the rules and
regulations of the Commission promulgated thereunder, and none of the SEC
Reports, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.  The
financial statements of the Company included in the SEC Reports comply in all
material respects with applicable accounting requirements and the rules and
regulations of the Commission with respect thereto as in effect at the time of
filing.  Such financial statements have
been prepared in accordance with generally accepted accounting principles (“GAAP”)
applied on a consistent basis during the periods involved, except as may be
otherwise specified in such financial statements or the notes thereto, and
fairly present in all material respects the financial position of the Company
and its consolidated subsidiaries as of and for the dates thereof and the
results of operations and cash flows for the periods then ended, subject, in
the case of unaudited statements, to normal, immaterial, year-end audit
adjustments.


 


(i)            Material
Changes.  Since the date of the
latest audited financial statements included within the SEC Reports, except as
specifically disclosed in the SEC Reports: (i) there has been no event,
occurrence or development that has had or that would reasonably be expected to
result in a Material Adverse Effect, (ii) the Company has not incurred any
liabilities (contingent or otherwise) other than (A) trade payables and accrued
expenses incurred in the ordinary course of business consistent with past
practice and (B) liabilities not required to be reflected in the Company’s
financial statements pursuant to GAAP or required to be disclosed in filings
made with the Commission, (iii) the Company has not altered its method of
accounting or the identity of its auditors, (iv) the Company has not declared
or made any dividend or distribution of cash or other property to its
shareholders


 


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or purchased, redeemed or made any agreements to purchase or redeem any
shares of its capital stock, and (v) the Company has not issued any equity
securities to any officer, managing director, supervisory director or
Affiliate, except pursuant to existing Company stock option or similar plans.


 


(j)            Litigation.  There is no action, suit, inquiry, notice of
violation, proceeding or investigation pending or, to the knowledge of the
Company, threatened against or affecting the Company, any Subsidiary or any of
their respective properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (Dutch, U.S. federal, state,
county, local or other foreign) (collectively, an “Action”) which: (i)
adversely affects or challenges the legality, validity or enforceability of any
of the Transaction Documents or the Securities or (ii) would, if there were an
unfavorable decision, individually or in the aggregate, have or reasonably be
expected to result in a Material Adverse Effect. Neither the Company nor any
Subsidiary, nor any supervisory director, managing director or officer thereof,
is or has been the subject of any Action involving a claim of violation of or
liability under Dutch, U.S. federal or state securities laws. The  Company does not have pending before the
Commission any request for confidential treatment of information.  There has not been, and to the knowledge of
the Company, there is not pending or contemplated, any investigation by the
Commission involving the Company or any current or former supervisory director,
managing director or officer of the Company. 
The Commission has not issued any stop order or other order suspending
the effectiveness of any registration statement filed by the Company or any
Subsidiary under the Exchange Act or the Securities Act.


 


(k)           Compliance.  Except as set forth in the SEC Reports,
neither the Company nor any Subsidiary: (i) is in default under or in violation
of (and no event has occurred that has not been waived that, with notice or
lapse of time or both, would result in a default by the Company or any
Subsidiary under), nor has the Company or any Subsidiary received notice of a
claim that it is in default under or that it is in violation of, any indenture,
loan or credit agreement or any other agreement or instrument to which it is a party
or by which it or any of its properties is bound (whether or not such default
or violation has been waived), (ii) is in violation of any order of any court,
arbitrator or governmental body, or (iii) is or has been in violation of any
statute, rule or regulation of any governmental authority, except in each case
as would not, individually or in the aggregate, reasonably be expected to have
or result in a Material Adverse Effect.


 


(l)            Labor
Relations.  No material labor
dispute exists or, to the knowledge of the Company, is imminent with respect to
any of the employees of the Company.


 


(m)          Regulatory
Permits.  The Company and the
Subsidiaries possess all certificates, authorizations and permits issued by the
appropriate Dutch, U.S. federal, state, local or other foreign regulatory
authorities necessary to conduct their respective businesses as described in
the SEC Reports, except where the failure to possess such permits would not,
individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect (“Material Permits”), and neither the Company
nor any Subsidiary has received any notice of proceedings relating to the
revocation or modification of any Material Permit.


 


11

















 


(n)           Title
to Assets.  The Company and the
Subsidiaries have good and marketable title in fee simple to all real property
owned by them that is material to the business of the Company and the
Subsidiaries and good and marketable title in all personal property owned by
them that is material to the business of the Company and the Subsidiaries, in
each case free and clear of all Liens, except for Liens pursuant to the credit
facilities disclosed in the SEC Reports and other Liens as do not materially
affect the value of such property and do not materially interfere with the use
made and proposed to be made of such property by the Company and the
Subsidiaries.  Any real property and
facilities held under lease by the Company and the Subsidiaries are held under
valid, subsisting and enforceable leases of which the Company and the
Subsidiaries are in compliance.


 


(o)           Patents
and Trademarks.  To the knowledge of
the Company, the Company and the Subsidiaries have, or have rights to use, all
patents, patent applications, trademarks, trademark applications, service
marks, trade names, copyrights, licenses and other similar rights necessary or
material for use in connection with their respective businesses as described in
the SEC Reports and which the failure to so have would reasonably be expected
to have a Material Adverse Effect (collectively, the “Intellectual Property
Rights”).  To the knowledge of the
Company, all such Intellectual Property Rights are enforceable and there is no
existing infringement by another Person of any of the Intellectual Property
Rights.


 


(p)           Insurance.  The Company and the Subsidiaries are insured
by insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the businesses in which
the Company and the Subsidiaries are engaged. 
Neither the Company nor any Subsidiary has any reason to believe it will
not be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary
to continue its business without a significant increase in cost.


 


(q)           Transactions
With Affiliates and Employees. 
Except as disclosed in the SEC Reports or as is so minor as to not
require disclosure under the Exchange Act and applicable regulations, none of
the managing directors, supervisory directors or officers of the Company and,
to the knowledge of the Company, none of the employees of the Company is
presently a party to any transaction with the Company or any Subsidiary (other
than for services as employees, officers, managing directors or supervisory
directors), including any contract, agreement or other arrangement providing
for the furnishing of services to or by, providing for rental of real or
personal property to or from, or otherwise requiring payments to or from any
officer, director or such employee or, to the knowledge of the Company, any
entity in which any officer, managing director, supervisory director, or any
such employee has a substantial interest or is an officer, managing director,
supervisory director, trustee or partner.


 


(r)            Internal
Accounting Controls.  The Company
and the Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed
in accordance with management’s general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of


 


12

















 


financial statements in conformity with GAAP and to maintain asset
accountability, (iii) access to assets is permitted only in accordance with
management’s general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. The
Company has established disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the Company and designed such
disclosures controls and procedures to ensure that material information
relating to the Company, including its subsidiaries, is made known to the
certifying officers by others within those entities, particularly during the
period in which the Company’s Form 10-K or 10-Q, as the case may be, is being
prepared.  The Company’s certifying
officers have evaluated the effectiveness of the Company’s disclosure controls
and procedures as of a date within 90 days prior to the filing date of the Form
10-Q for the quarter ended February 29, 2004 (such date, the “Evaluation
Date”).  The Company presented in
the Form 10-Q for the quarter ended February 29, 2004 the conclusions of the
certifying officers about the effectiveness of the disclosure controls and
procedures based on their evaluations as of the Evaluation Date.  Since the Evaluation Date, there have been
no significant changes in the Company’s internal controls (as such term is
defined in Item 307(b) of Regulation S-K under the Exchange Act) or, the
Company’s knowledge, in other factors that would reasonably be expected to
significantly affect the Company’s internal controls.


 


(s)           Solvency/Indebtedness.  Except as disclosed in the SEC Reports,
based on the financial condition of the Company as of the Closing Date: (i) the
fair market value of the Company’s assets exceeds the amount that will be
required to be paid on or in respect of the Company’s existing debts and other
liabilities (including known contingent liabilities) as they mature; (ii) the
Company’s assets do not constitute unreasonably small capital to carry on its
business for the current fiscal year as now conducted and as proposed to be
conducted including its capital needs taking into account the particular
capital requirements of the business conducted by the Company, and projected
capital requirements and capital availability thereof; and (iii) the current
cash flow of the Company, together with the proceeds the Company would receive,
were it to liquidate all of its assets, after taking into account all
anticipated uses of the cash, would be sufficient to pay all amounts on or in
respect of its debt when such amounts are required to be paid.  The Company does not intend to incur debts
beyond its ability to pay such debts as they mature (taking into account the
timing and amounts of cash to be payable on or in respect of its debt). The
Company has no knowledge of any facts or circumstances which lead it to believe
that it will file for reorganization or liquidation under the bankruptcy or
reorganization laws of any jurisdiction within one year from the Closing
Date.  The SEC Reports set forth as of
the dates thereof all material outstanding secured and unsecured Indebtedness
of the Company or any Subsidiary, or for which the Company or any Subsidiary
has commitments. For the purposes of this Agreement, “Indebtedness”
shall mean (a) any liabilities for borrowed money or amounts owed in excess of
$50,000 (other than trade accounts payable incurred in the ordinary course of
business), (b) all guaranties, endorsements and other contingent obligations
related to Indebtedness of others, whether or not the same are or should be
reflected in the Company’s balance sheet or the notes thereto, in excess of
$50,000, except guaranties by endorsement of negotiable instruments for deposit
or collection in the ordinary course of business, and (c) the


 


13

















 


present value of any lease payments in excess of $50,000 due under
leases required to be capitalized in accordance with GAAP.  Except as disclosed in the SEC Reports, neither
the Company nor any Subsidiary is in default with respect to any Indebtedness.


 


(t)            Certain
Fees.  No brokerage or finder’s fees
or commissions are or will be payable by the Company to any broker, financial
advisor or consultant, finder, placement agent, investment banker, bank or
other Person with respect to the transactions contemplated by this Agreement,
and the Company has not taken any action that would cause any Purchaser to be
liable for any such fees or commissions. 
The Company agrees that the Purchasers shall have no obligation with
respect to any fees or with respect to any claims made by or on behalf of any
Person for fees of the type contemplated by this Section with the transactions
contemplated by this Agreement.


 


(u)           Private
Placement.  Assuming the accuracy of
the representations and warranties of the Purchasers set forth in Sections
3.2(b)-(e), the offer, issuance and sale of the Securities to the Purchasers as
contemplated hereby are exempt from the registration requirements of the Securities
Act.  The issuance and sale of the
Securities hereunder do not contravene the rules and regulations of the
Principal Market, except that shareholder approval is required for the Company
to issue in excess of 2,556,699 shares of Common Stock under the
Transaction Documents.


 


(v)           Listing
and Maintenance Requirements.  The
Company’s Common Stock is registered pursuant to Section 12(g) of the Exchange
Act, and the Company has taken no action designed to, or which to its knowledge
is likely to have the effect of, terminating the registration of the Common
Stock under the Exchange Act nor has the Company received any notification that
the Commission is contemplating terminating such registration. The Company has
not, in the 12 months preceding the date hereof, received notice from any
Principal Market on which the Common Stock is or has been listed or quoted to
the effect that the Company is not in compliance with the listing or
maintenance requirements of such Principal Market. The Company is, and has no reason
to believe that it will not in the foreseeable future continue to be, in
compliance with all such listing and maintenance requirements.


 


(w)          Registration
Rights.  The  Company has not granted or agreed to grant
to any Person any rights (including “piggy-back” registration rights) to have
any securities of the Company registered with the Commission or any other
governmental authority that  are
required to be included in the registration statement(s) required to be filed
by the Company pursuant to the Transaction Documents


 


(x)            Application
of Takeover Protections.  The
Company and its Supervisory Board have taken all necessary action, if any, in
order to render inapplicable any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Company’s Articles of
Association (or similar charter documents) or the laws of its jurisdiction of
incorporation that is or could become applicable to the Purchasers as a result
of the Purchasers and the Company fulfilling their obligations or exercising
their rights under


 


14

















 


the Transaction Documents, including without limitation as a result of
the Company’s issuance of the Securities and the Purchasers’ ownership of the
Securities.


 


(y)           Seniority.  Except for liens securing indebtedness
disclosed in the SEC Reports and without consideration of equitable
subordination principles, as of the Closing Date, no indebtedness of the
Company is senior to the Debentures in right of payment, whether with respect
to interest or upon liquidation or dissolution, or otherwise, other than
indebtedness secured by purchase money security interests (which is senior only
as to underlying assets covered thereby) and capital lease obligations (which
is senior only as to the property covered thereby).


 


(z)            Disclosure.  The Company confirms that neither it nor any
other Person acting on its behalf has provided any of the Purchasers or their
agents or counsel with any information that constitutes or might constitute
material, nonpublic information, unless prior thereto such Purchaser shall have
executed a written agreement regarding the confidentiality and use of such
information.  The Company understands
and confirms that the Purchasers will rely on the foregoing representations in
effecting transactions in securities of the Company. All disclosure provided to
the Purchasers regarding the Company, its business and the transactions
contemplated hereby, including the Schedules to this Agreement, furnished by or
on behalf of the Company with respect to the representations and warranties
made herein are true and correct with respect to such representations and
warranties and do not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading. The Company acknowledges and agrees that no Purchaser makes or has
made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in Section 3.2
hereof.


 


(aa)         Form
S-3 Eligibility.  The Company is
eligible to register the resale of the Underlying Shares for resale by the
Purchaser on Form S-3 promulgated under the Securities Act.


 


(bb)         Tax
Status.  The Company and each of its
Subsidiaries has made or filed all Dutch, U.S. federal, state and foreign
income and all other tax returns, reports and declarations required by any
jurisdiction to which it is subject (unless and only to the extent that the
Company and each of its Subsidiaries has set aside on its books provisions
reasonably adequate for the payment of all unpaid and unreported taxes) and has
paid all taxes and other governmental assessments and charges that are material
in amount, shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith and has set aside on
its books provisions reasonably adequate for the payment of all taxes for
periods subsequent to the periods to which such returns, reports or
declarations apply.  There are no unpaid
taxes in any material amount claimed to be due by the taxing authority of any
jurisdiction, and the officers of the Company know of no basis for any such
claim.  The Company has not executed a
waiver with respect to the statute of limitations relating to the assessment or
collection of any foreign, Dutch, U.S. federal, state or local tax.  None of the Company’s tax returns is
presently being audited by any taxing authority.


 


15

















 


(cc)         Acknowledgment
Regarding Purchasers’ Purchase of Securities.  The Company acknowledges and agrees that the Purchasers are
acting solely in the capacity of arm’s length purchasers with respect to this
Agreement and the transactions contemplated hereby.  The Company further acknowledges that no Purchaser is acting as a
financial advisor or fiduciary of the Company (or in any similar capacity) with
respect to this Agreement and the transactions contemplated hereby and any
statement made by any Purchaser or any of their respective representatives or
agents in connection with this Agreement and the transactions contemplated
hereby is not advice or a recommendation and is merely incidental to the
Purchasers’ purchase of the Securities. 
The Company further represents to each Purchaser that the Company’s
decision to enter into this Agreement has been based solely on the independent
evaluation of the Company and its representatives.


 


(dd)         No General
Solicitation or Advertising in Regard to this Transaction.  Neither the Company nor, to the knowledge of
the Company, any of its supervisory directors, managing directors or officers
(i) has conducted or will conduct any general solicitation (as that term is
used in Rule 502(c) of Regulation D) or general advertising with respect to the
sale of the Debentures or the Warrants, or (ii) made any offers or sales of any
security or solicited any offers to buy any security under any circumstances
that would require registration of the Debentures, the Underlying Shares or the
Warrants under the Securities Act or made any “directed selling efforts” as
defined in Rule 902 of Regulation S.


 


(ee)         No
Disagreements with Accountants and Lawyers.  The Company is current with respect to any fees owed to its
accountants and lawyers.


 


3.2           Representations and
Warranties of the Purchasers.  Each
Purchaser hereby, for itself and for no other Purchaser, represents and warrants
to the Company as follows:


 


(a)           Organization;
Authority.  Such Purchaser is an
entity duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization with the requisite corporate or
partnership power and authority to enter into and to consummate the
transactions contemplated by the Transaction Documents and otherwise to carry
out its obligations thereunder. The purchase by such Purchaser of the
Securities hereunder has been duly authorized by all necessary action on the
part of such Purchaser.  Each of this
Agreement and the Registration Rights Agreement has been duly executed by such
Purchaser, and when delivered by such Purchaser in accordance with the terms
hereof, will constitute the valid and legally binding obligation of such
Purchaser, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors’ rights and remedies generally
and general principles of equity.


 


(b)           Investment
Intent.  Such Purchaser is acquiring
the Securities as principal for its own account for investment purposes only
and not with a view to or for distributing or reselling such Securities or any
part thereof, without prejudice, however, to such Purchaser’s right, subject to
the provisions of this Agreement, at all times to sell or otherwise dispose of
all or any part of such Securities pursuant to an effective


 


16

















 


registration statement under the Securities Act or under an exemption
from such registration and in compliance with applicable federal and state
securities laws.  Nothing contained
herein shall be deemed a representation or warranty by such Purchaser to hold
Securities for any period of time.  Such
Purchaser is acquiring the Securities hereunder in the ordinary course of its
business.  Such Purchaser does not have
any agreement or understanding, directly or indirectly, with any Person to
distribute any of the Securities.


 


(c)           Purchaser
Status.  At the time such Purchaser
was offered the Securities, it was, and at the date hereof it is, and on each
date on which it exercises any Warrants or converts any Debentures it will be,
an “accredited investor” as defined in Rule 501(a) under the Securities Act.
Such Purchaser has not been formed solely for the purpose of acquiring the
Securities.  Such Purchaser is not a
registered broker-dealer under Section 15 of the Exchange Act.


 


(d)           Experience
of such Purchaser.  Such Purchaser,
either alone or together with its representatives, has such knowledge,
sophistication and experience in business and financial matters so as to be
capable of evaluating the merits and risks of the prospective investment in the
Securities, and has so evaluated the merits and risks of such investment.  Such Purchaser is able to bear the economic
risk of an investment in the Securities and, at the present time, is able to
afford a complete loss of such investment.


 


(e)           General
Solicitation.  Such Purchaser is not
purchasing the Securities as a result of any advertisement, article, notice or
other communication regarding the Securities published in any newspaper,
magazine or similar media or broadcast over television or radio or presented at
any seminar or any other general solicitation or general advertisement.


 


ARTICLE IV


OTHER AGREEMENTS OF THE PARTIES


 


4.1           Transfer
Restrictions.


 


(a)           The
Securities may only be disposed of in compliance with state and federal
securities laws.  In connection with any
transfer (including a pledge) of Securities other than pursuant to an effective
registration statement, to the Company or to an Affiliate of a Purchaser, the
Company may require the transferor thereof to provide to the Company an opinion
of counsel selected by the transferor and reasonably satisfactory to the
Company, the form and substance of which opinion shall be reasonably
satisfactory to the Company, to the effect that such transfer does not require
registration of such transferred Securities under the Securities Act.  As a condition of transfer, any such
transferee shall agree in writing to be bound by the terms of this Agreement
and shall have the rights of a Purchaser under this Agreement and the Registration
Rights Agreement.


 


(b)           Each
Purchaser agrees to the imprinting, so long as is required by this Section
4.1(b), of the following legend on any certificate evidencing Securities:


 


17

















 


[NEITHER] THESE SECURITIES [NOR THE SECURITIES INTO WHICH THESE
SECURITIES ARE [EXERCISABLE] [CONVERTIBLE]] HAVE [NOT] BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS, ALL AS EVIDENCED BY A LEGAL OPINION OF
COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE
REASONABLY ACCEPTABLE TO THE COMPANY. 
THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN SECURED BY SUCH SECURITIES.


 


The Company acknowledges and agrees that a Purchaser may from time to
time pledge pursuant to a bona fide margin agreement or grant a security
interest in some or all of the Securities and, if required under the terms of
such arrangement, such Purchaser may transfer pledged or secured Securities to
the pledgees or secured parties, subject to this Section 4.1.  Further, no notice shall be required of such
pledge.  At the appropriate Purchaser’s
expense, the Company will execute and deliver such reasonable documentation as
a pledgee or secured party of Securities may reasonably request in connection
with a pledge or transfer of the Securities, including the preparation and
filing of any required prospectus supplement under Rule 424(b)(3) of the
Securities Act or other applicable provision of the Securities Act to
appropriately amend the list of Selling Shareholders thereunder.


 


(c)           Certificates
evidencing Underlying Shares shall not be issued with any legend (including the
legend set forth in Section 4.1(b) hereof): (i) while a registration statement
(including the Underlying Shares Registration Statement) covering the resale of
such security is effective under the Securities Act, or (ii) following any sale
of such Underlying Shares pursuant to Rule 144, or (iii) if such Underlying
Shares are eligible for sale under Rule 144(k), or (iv) if such legend is not
required under applicable requirements of the Securities Act (including
judicial interpretations and pronouncements issued by the staff of the
Commission); provided, however, in connection with the issuance
of the Underlying Shares, each Purchaser, severally and not jointly with the
other Purchasers, hereby agrees to adhere to and abide by all prospectus
delivery requirements under the Securities Act and Commission Regulations.  If all or any portion of a Debenture or
Warrant is converted or exercised (as applicable) at a time when there is an
effective registration statement to cover the resale of the Underlying Shares,
or if such Underlying Shares may be sold under Rule 144(k) or if such legend is
not otherwise required under applicable requirements of the Securities Act
(including judicial interpretations thereof) then such Underlying Shares shall
be issued free of all legends.  The
Company agrees that following the Effective Date or at such time as such legend
is


 


18

















 


no longer required under this Section 4.1(c), it will, no later than
three Trading Days following the delivery by a Purchaser to the Company or the
Company’s transfer agent of a certificate representing Underlying Shares issued
with a restrictive legend (such third Trading Day, the “Legend Removal Date”),
deliver or cause to be delivered to such Purchaser a certificate representing
such shares that is free from all restrictive and other legends.  The Company may not make any notation on its
records or give instructions to any transfer agent of the Company that enlarge
the restrictions on transfer set forth in this Section.


 


(d)           In
addition to such Purchaser’s other available remedies, the Company shall pay to
a Purchaser, in cash, as liquidated damages and not as a penalty, for each
$1,000 of Underlying Shares (based on the VWAP of the Common Stock on the date
such Securities are submitted to the Company’s transfer agent) delivered for
removal of the restrictive legend and subject to this Section 4.1(c), $10 per
Trading Day (increasing to $20 per Trading Day 3 Trading Days after such
damages have begun to accrue) for each Trading Day after the Legend Removal
Date until such certificate is delivered without a legend, unless required by
applicable law.


 


4.2           Acknowledgment of
Dilution.  The Company acknowledges
that the issuance of the Securities may result in dilution of the outstanding
shares of Common Stock, which dilution may be substantial under certain market
conditions.  The Company further acknowledges
that its obligations under the Transaction Documents, including without
limitation its obligation to issue the Underlying Shares pursuant to the
Transaction Documents, are unconditional and absolute and not subject to any
right of set off, counterclaim, delay or reduction, regardless of the effect of
any such dilution or any claim the Company may have against any Purchaser and
regardless of the dilutive effect that such issuance may have on the ownership
of the other shareholders of the Company; provided, however, the
Company’s fulfillment of its obligations under the Transaction Documents,
including its issuance of the Underlying Shares pursuant to the Transaction
Documents, shall not operate as a waiver by the Company of any claim it may
have against the Purchaser.


 


4.3           Furnishing of
Information.  As long as any
Purchaser owns Securities, the Company covenants to timely file (or obtain
extensions in respect thereof and file within the applicable grace period) all
reports required to be filed by the Company after the date hereof pursuant to
the Exchange Act.  Upon the request of
any Purchaser, the Company shall deliver to such Purchaser a written
certification of a duly authorized officer as to whether it has complied with
the preceding sentence. As long as any Purchaser owns Securities, if the
Company is not required to file reports pursuant to such laws, it will prepare
and furnish to the Purchasers and make publicly available in accordance with
Rule 144(c) such information as is required for the Purchasers to sell the
Securities under Rule 144. The Company further covenants that it will take such
further action as any holder of Securities may reasonably request, all to the
extent required from time to time to enable such Person to sell such Securities
without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144.


 


4.4           Integration.  The Company shall not, and shall use
commercially reasonable efforts to ensure that no Affiliate of the Company
shall, sell, offer for sale or solicit offers to buy or otherwise negotiate in
respect of any security (as defined in Section 2 of the Securities Act)


 


19

















 


that would be integrated with the offer or
sale of the Securities in a manner that would require the registration under
the Securities Act of the sale of the Securities to the Purchasers, or that
would be integrated with the offer or sale of the Securities for purposes of
the rules and regulations of any Principal Market.


 


4.5           Reservation and
Listing of Securities.


 


(a)           The
Company shall reserve from its authorized share capital (“maatschappelijk kapitaal”)
shares of Common Stock for issuance pursuant to the Transaction Documents in
such amount as may be required to fulfill its obligations in full under the
Transaction Documents.


 


(b)           If,
on any date, the number of shares of Common Stock which can be issued without
increasing the authorized share capital (“maatschappelijk kapitaal”) of the Company
is less than 150% of the Actual Minimum on such date, then the Supervisory
Board of the Company shall use commercially reasonable efforts to amend the
Company’s articles of association to increase the authorized share capital (“maatschappelijk
kapitaal”) such that the number of shares of Common Stock which can
be issued equals at least the Required Minimum at such time (minus the number
of shares of Common Stock previously issued pursuant to the Transaction
Documents), as soon as possible and in any event not later than the 90th day
after such date; provided that the Company will not be required at any time to
authorize a number of shares of Common Stock greater than the maximum remaining
number of shares of Common Stock that could possibly be issued after such time
pursuant to the Transaction Documents.


 


(c)           The
Company shall: (i) prior to Closing, prepare and file with such Principal
Market an additional shares listing application covering a number of shares of
Common Stock at least equal to the Required Minimum on the date of such
application, (ii) take all steps necessary to cause such shares of Common Stock
to be approved for listing on the Principal Market as soon as possible
thereafter, (iii) provide to the Purchasers evidence of such listing, and (iv)
maintain the listing of such Common Stock on such Principal Market or another
Principal Market at least equal to the Required Minimum.  In addition, the Company shall hold a
meeting of shareholders (which may also be the annual meeting of shareholders)
at the earliest practical date, but in no event later than December 31, 2004,
for the purpose of obtaining Shareholder Approval, with the recommendation of
the Company’s Supervisory Board that such proposal be approved, and the Company
shall solicit proxies from its shareholders in connection therewith in the same
manner as all other management proposals in such proxy statement and all
management-appointed proxyholders shall vote their proxies in favor of such
proposal.  The Company shall use
commercially reasonable efforts to obtain unconditional approval of the
transactions contemplated by the Transaction Documents from the Principal
Market as soon as reasonably practicable.


 


4.6           Conversion and
Exercise Procedures.  The form of
Notice of Exercise included in the Warrants and the form of Notice of
Conversion included in the Debentures set forth the totality of the procedures
required of the Purchasers in order to exercise the Warrants or convert the
Debentures.  No additional legal opinion
or other information or instructions shall be


 


20

















 


required of the Purchasers to exercise their Warrants or convert their
Debentures. The Company shall honor exercises of the Warrants and conversions
of the Debentures and shall deliver Underlying Shares in accordance with the
terms, conditions and time periods set forth in the Transaction Documents.


 


4.7           Future Financings.  From the date hereof until 90 days after the
Effective Date, other than as contemplated by this Agreement, neither the
Company nor any Subsidiary shall issue or sell any Capital Shares or Capital
Shares Equivalents.  Notwithstanding
anything to the contrary herein, this Section 4.7 shall not apply to the
following (each of which, an “Exempt Transaction”): (a) the granting of
options or the issuance of shares of Common Stock to employees, officers and
directors of the Company pursuant to any stock option plan, share purchase plan
or similar plan duly adopted by a majority of the non-employee members of the
Supervisory Board of the Company or a majority of the members of a committee of
non-employee directors established for such purpose, (b) the issuance of up to
150,000 shares of Common Stock or Capital Shares Equivalents, in the aggregate,
to consultants or advisors to the Company for services rendered to the Company
by such consultants or advisors subsequent to the date hereof, (c) the issuance
or deemed issuance of any security by the Company pursuant to the Transaction
Documents, or (d) the exercise of or conversion of any convertible securities,
options or warrants issued and outstanding on the Closing Date, provided that
such securities have not been amended since the date hereof to increase the
type or number of securities issuable with respect thereto or decrease the
exercise or conversion price of such securities, or (e) acquisitions, business
partnerships, joint ventures, real property leasing arrangements or other
strategic investments, the primary purpose of which is not to raise capital, or
commercial credit arrangements or debt financings from a bank or similar
financial institution, (f) firm commitment underwritten public offerings,
commercial credit arrangements, debt financing from a commercial bank or
similar financial institutions or (g) leasing arrangements from a bank or
similar financial institution approved by the Company’s Supervisory Board.


 


4.8           Securities Laws
Disclosure; Publicity.  The Company
shall, by 8:30 a.m. Eastern time on the Trading Day following the date hereof,
issue a press release or file a Current Report on Form 8-K reasonably
acceptable to each Purchaser disclosing all material terms of the transactions
contemplated hereby.  The Company and
the Purchasers shall consult with each other in issuing any press releases with
respect to the transactions contemplated hereby.  Notwithstanding the foregoing, other than in any registration
statement filed pursuant to the Registration Rights Agreement and filings
related thereto, the Company shall not publicly disclose the name of any
Purchaser, or include the name of any Purchaser in any filing with the
Commission or any regulatory agency or Principal Market, without the prior
written consent of such Purchaser, except to the extent such disclosure is
required by law or Principal Market regulations, in which case the Company
shall provide each Purchaser with prior notice of such disclosure.


 


4.9           Non-Public
Information.  The Company covenants
and agrees that other than as it relates to the Transaction Documents neither
it nor any other Person acting on its behalf will provide any Purchaser or its
agents or counsel with any information that the Company believes constitutes
material non-public information, unless prior thereto such Purchaser shall have
executed a written agreement regarding the confidentiality and use of such
information.  The


 


21

















 


Company understands and
confirms that each Purchaser shall be relying on the foregoing representations
in effecting transactions in securities of the Company.


 


4.10         Use of Proceeds.  The Company shall use the net proceeds from
the sale of the Securities hereunder for working capital purposes, but not to
redeem any Company equity or equity-equivalent securities. Prior to the receipt
of Shareholder Approval, the Company shall not declare or pay any cash dividend
on its shares of Common Stock while any Debentures remain outstanding.


 


4.11         Reimbursement. If
any Purchaser becomes involved in any capacity in any Proceeding by or against
any Person who is a shareholder of the Company, solely as a result of such
Purchaser’s acquisition of the Securities under this Agreement and without
causation by any other activity, obligation, condition or liability pertaining
to such Purchaser, the Company will reimburse such Purchaser, to the extent
such reimbursement is not provided for in Section 4.12, for its reasonable
legal and other expenses (including the cost of any investigation, preparation
and travel in connection therewith) incurred in connection therewith, as such
expenses are incurred. The reimbursement obligations of the Company under this
paragraph shall be in addition to any liability which the Company may otherwise
have, shall extend upon the same terms and conditions to any Affiliates of the
Purchasers who are actually named in such action, proceeding or investigation,
and partners, directors, agents, employees and controlling persons (if any), as
the case may be, of the Purchasers and any such Affiliate, and shall be binding
upon and inure to the benefit of any successors, assigns, heirs and personal
representatives of the Company, the Purchasers and any such Affiliate and any
such Person.  If the Company is also
involved in any such proceeding, then absent a conflict of interest, Purchasers
agree to use Company’s counsel in connection therewith.  The Company also agrees that neither the
Purchasers nor any such Affiliates, partners, directors, agents, employees or
controlling persons shall have any liability to the Company or any Person
asserting claims on behalf of or in right of the Company solely as a result of
acquiring the Securities under this Agreement.


 


4.12         Indemnification of
Purchasers.  Subject to the
provisions of this Section 4.12, the Company will indemnify and hold the
Purchasers and their directors, officers, shareholders, partners, employees and
agents (each, a “Purchaser Party”) harmless from any and all losses,
liabilities, obligations, claims, contingencies, damages, costs and expenses,
including all judgments, amounts paid in settlements, court costs and
reasonable attorneys’ fees and costs of investigation that any such Purchaser
Party may suffer or incur as a result of or relating to any breach of any of
the representations, warranties, covenants or agreements made by the Company in
this Agreement or in the other Transaction Documents.  If any action shall be brought against any Purchaser Party in
respect of which indemnity may be sought pursuant to this Agreement, such
Purchaser Party shall promptly notify the Company in writing, and the Company
shall have the right to assume the defense thereof with counsel of its own
choosing.  Any Purchaser Party shall
have the right to employ separate counsel in any such action and participate in
the defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Purchaser Party except to the extent that (i) the employment
thereof has been specifically authorized by the Company in writing, (ii) the
Company has failed after a reasonable period of time to assume such defense and
to employ counsel or (iii) in such action there is, in the reasonable opinion
of such separate counsel, a material conflict on any material issue between the
position of the Company and the position of such Purchaser Party.  The Company will not be liable to any


 


22

















 


Purchaser Party under this Agreement (i) for
any settlement by an Purchaser Party effected without the Company’s prior
written consent, which shall not be unreasonably withheld or delayed; or (ii)
to the extent, but only to the extent that a loss, claim, damage or liability
is attributable to any Purchaser Party’s breach of any of the representations,
warranties, covenants or agreements made by the Purchasers in this Agreement or
in the other Transaction Documents.


 


4.13         Shareholders Rights
Plan.  In the event that a
shareholders rights plan is adopted by the Company, no claim will be made or
enforced by the Company or any other Person that any Purchaser is an “Acquiring
Person” under the plan or in any way could be deemed to trigger the provisions
of such plan by virtue of receiving Securities under the Transaction Documents.


 


4.14         Participation in
Future Financing. (a) From the date hereof until the earlier of such time
as a Purchaser no longer holds any Debentures and the closing date of a
Fundamental Transaction (as defined in the Debentures), and except for Exempt
Transactions, the Company shall not effect a financing of its Capital Shares or
Capital Shares Equivalents (a “Subsequent Financing”) unless the Company
delivers to each Purchaser a written notice at least 5 Trading Days prior to
the closing of such Subsequent Financing (the “Subsequent Financing Notice”)
of its intention to effect such Subsequent Financing, which Subsequent
Financing Notice shall describe in reasonable detail the proposed terms of such
Subsequent Financing, the amount of proceeds intended to be raised thereunder,
the Person with whom such Subsequent Financing is proposed to be effected, and
attached to which shall be a term sheet or similar document relating
thereto.  Each Purchaser may participate
in up to 100% of such Subsequent Financing (subject to the limitations below)
by notifying the Company by 6:30 p.m. (New York City time) on the fifth (5th)
Trading Day after its receipt of the Subsequent Financing Notice of its
willingness to provide (or to cause its designee to provide), subject to
completion of mutually acceptable documentation, all or part of such financing
to the Company on the same terms set forth in the Subsequent Financing Notice.
If one or more Purchasers shall fail to so notify the Company of their
willingness to participate in the Subsequent Financing, the Company may effect
the remaining portion of such Subsequent Financing on the terms and to the
Persons set forth in the Subsequent Financing Notice; provided that the Company
must provide the Purchasers with a second Subsequent Financing Notice, and the
Purchasers will again have the right of first refusal set forth above in this
Section 4.14, if the Subsequent Financing subject to the initial Subsequent
Financing Notice is not consummated for any reason on the terms set forth in
such Subsequent Financing Notice within 60 Trading Days after the date of the
initial Subsequent Financing Notice with the Person identified in the Subsequent
Financing Notice, and if the Company still desires to effect such
financing.  In the event the Company
receives responses to Subsequent Financing Notices from Purchasers seeking to
purchase more than the financing sought by the Company in the Subsequent
Financing such Purchasers shall have the right to purchase their Pro Rata
Portion (as defined below) of the Capital Shares or Capital Shares Equivalents
to be issued in such Subsequent Financing. 
“Pro Rata Portion” is the ratio of (x) the principal amount of
Debentures purchased by such Purchaser and (y) the sum of the aggregate
principal amount of Debentures issued hereunder held by Purchasers
participating in the Subsequent Financing. 
If any Purchaser no longer holds any Debentures, then the right of
participation granted under this Section 4.14 shall no longer apply to such
Purchaser and the Pro Rata Portion of such Purchaser shall be re-allocated
among the remaining Purchasers. 
Notwithstanding anything to the contrary herein, this Section 4.14 shall
not apply to the following (a) the granting of options to employees, officers
and directors of the Company pursuant to any stock option plan duly adopted by
a


 


23

















 


majority of the non-employee members of the
Supervisory Board of the Company or a majority of the members of a committee of
non-employee directors established for such purpose, or (b) the conversion or
exercise of the Debentures or any other security issued by the Company in
connection with the offer and sale of this Company’s securities pursuant to
this Agreement, or (c) the exercise of or conversion of any convertible
securities, options or warrants issued and outstanding on the Original Issue
Date, provided such securities have not been amended since the date hereof, or
(d) acquisitions or strategic investments, the primary purpose of which is not
to raise capital.


 


(b)           From the date hereof
until the earlier of such time as a Purchaser no longer holds any Debentures
and the closing date of a Fundamental Transaction, the Company shall be
prohibited from effecting or enter into an agreement to effect any Subsequent
Financing involving a “Variable Rate Transaction” or an “MFN
Transaction” (each as defined below). 
The term “Variable Rate Transaction” shall mean a transaction in
which the Company issues or sells (i) any debt or equity securities that are
convertible into, exchangeable or exercisable for, or include the right to
receive additional shares of Common Stock either (A) at a conversion, exercise
or exchange rate or other price that is based upon and/or varies with the
trading prices of or quotations for the shares of Common Stock at any time
after the initial issuance of such debt or equity securities, or (B) with a
conversion, exercise or exchange price that is subject to being reset at some
future date after the initial issuance of such debt or equity security or upon
the occurrence of specified or contingent events directly or indirectly related
to the business of the Company or the market for the Common Stock.  The term “MFN Transaction” shall mean
a transaction in which the Company issues or sells any securities in a capital
raising transaction or series of related transactions which grants to an
investor the right to receive additional shares based upon future transactions
of the Company on terms more favorable than those granted to the such investor
in such offering.


 


ARTICLE V


MISCELLANEOUS


 


5.1           Termination.  This Agreement may be terminated by the
Company or any Purchaser, by written notice to the other parties, if the
Closing has not been consummated on or before August 15, 2004, provided that no
such termination will affect the right of any party to sue for any breach by
the other party (or parties).


 


5.2           Fees and Expenses.  The Company has agreed to reimburse $10,000
to Midsummer Capital, LLC (“Midsummer”) (of which $5,000 has been
received) as reimbursement for its legal, administrative and due diligence fees
and expenses incurred to prepare and negotiate the Transaction Documents.  On the Closing Date, the Company shall wire
$5,000 to Midsummer as payment of the remaining portion of the $10,000
referenced above.  Except as expressly
set forth in the Transaction Documents to the contrary, each party shall pay
the fees and expenses of its advisers, counsel, accountants and other experts,
if any, and all other expenses incurred by such party incident to the
negotiation, preparation, execution, delivery and performance of this
Agreement.  The Company shall pay all
transfer agent fees, stamp taxes and other taxes and duties levied in
connection with the issuance of any Securities.


 


24

















 


5.3           Entire Agreement.  The Transaction Documents, together with the
exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements
and understandings, oral or written, with respect to such matters, which the
parties acknowledge have been merged into such documents, exhibits and
schedules.


 


5.4           Notices.  Any and all notices or other communications
or deliveries required or permitted to be provided hereunder shall be in
writing and shall be deemed given and effective on the earliest of (a) the date
of transmission, if such notice or communication is delivered via facsimile at
the facsimile number specified on the signature page attached hereto prior to
5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after
the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number specified in this Section on a day that is
not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading
Day,  or (c) the Trading Day following
the date of mailing, if sent by U.S. nationally recognized overnight courier
service. The addresses for such notices and communications are those set forth
on the signature pages hereof, or such other address as may be designated in
writing hereafter, in the same manner, by such Person.


 


5.5           Amendments; Waivers.  No provision of this Agreement may be waived
or amended except in a written instrument signed, in the case of an amendment,
by the Company and each of the Purchasers or, in the case of a waiver, by the
party against whom enforcement of any such waiver is sought.  No waiver of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to be a
continuing waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of either party to exercise any right hereunder in any manner
impair the exercise of any such right.


 


5.6           Construction.  The headings herein are for convenience
only, do not constitute a part of this Agreement and shall not be deemed to
limit or affect any of the provisions hereof. 
The language used in this Agreement will be deemed to be the language
chosen by the parties to express their mutual intent, and no rules of strict
construction will be applied against any party.


 


5.7           Successors and
Assigns.  This Agreement shall be
binding upon and inure to the benefit of the parties and their successors and
permitted assigns.  The Company may not
assign this Agreement or any rights or obligations hereunder without the prior
written consent of the Purchasers; provided, however that no such consent
shall be required in connection with: 
(a) a consolidation or merger of the Company with or into another
corporation or other entity or a sale, transfer or other disposition of all or
substantially all the Company’s property, assets or business to another
corporation or other entity; or (b) a reorganization or other transaction the
primary purpose of which is to change the jurisdiction of organization and/or
corporate form of the Company, provided that such merger, reorganization or
other transaction does not have an adverse tax impact upon the Purchasers with
respect to their purchase or sale of the Securities.  Any Purchaser may assign its rights under this Agreement and the
Registration Rights Agreement to any Person to whom such Purchaser assigns or
transfers any Securities.


 


5.8           No Third-Party
Beneficiaries.  This Agreement is
intended for the benefit of the parties hereto and their respective successors
and permitted assigns and is not for the benefit of,


 


25

















 


nor may any provision hereof be enforced by,
any other Person, except as otherwise set forth in Sections 4.12.


 


5.9           Governing Law;
Venue; Waiver of Jury Trial.  All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by and construed and enforced in accordance
with the internal laws of the State of California, without regard to the
principles of conflicts of law thereof. 
Each party hereby irrevocably submits to the exclusive jurisdiction of
the state and federal courts of Santa Clara County, California for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect to
the enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper or inconvenient venue for such
proceeding.  Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to limit
in any way any right to serve process in any manner permitted by law. The
parties hereby waive all rights to a trial by jury in any proceeding brought
under any of the Transaction Documents. 
If either party shall commence an action or proceeding to enforce any
provisions of this Agreement, then the prevailing party in such action or
proceeding shall be reimbursed by the other party for its attorneys fees and
other costs and expenses incurred with the investigation, preparation and
prosecution of such action or proceeding.


 


5.10         Survival.  The representations, warranties, agreements
and covenants contained herein shall survive the Closing and the delivery,
exercise and/or conversion of the Securities, as applicable, for the applicable
statute of limitations.


 


5.11         Execution.  This Agreement may be executed in two or
more counterparts, all of which when taken together shall be considered one and
the same agreement and shall become effective when counterparts have been
signed by each party and delivered to the other party, it being understood that
both parties need not sign the same counterpart.  In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile signature page were an original thereof.


 


5.12         Severability.  If any provision of this Agreement is held
to be invalid or unenforceable in any respect, the validity and enforceability
of the remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.


 


5.13         Rescission and
Withdrawal Right.  Notwithstanding
anything to the contrary contained in (and without limiting any similar
provisions of) the Transaction Documents, whenever any Purchaser exercises a
right, election, demand or option under a Transaction


 


26

















 


Document and the Company does not timely
perform its related obligations within the periods therein provided, then such
Purchaser may rescind or withdraw, in its sole discretion from time to time
upon written notice to the Company, any relevant notice, demand or election in
whole or in part without prejudice to its future actions and rights, provided,
however, in the case of a rescission of a conversion of a Debenture or exercise
of a Warrant, the Purchaser shall be required to return any shares of Common
Stock subject to any such conversion or exercise notice.


 


5.14         Replacement of
Securities.  If any certificate or
instrument evidencing any Securities is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for
and upon cancellation thereof, or in lieu of and substitution therefor, a new
certificate or instrument, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction and customary
and reasonable indemnity, if requested. 
The applicants for a new certificate or instrument under such
circumstances shall also pay any reasonable third-party costs associated with
the issuance of such replacement Securities.


 


5.15         Remedies.  In addition to being entitled to exercise
all rights provided herein or granted by law, including recovery of damages,
each of the Purchasers and the Company will be entitled to specific performance
under the Transaction Documents.  The
parties agree that monetary damages may not be adequate compensation for any
loss incurred by reason of any breach of obligations described in the foregoing
sentence and hereby agrees to waive in any action for specific performance of
any such obligation the defense that a remedy at law would be adequate. Without
limiting the generality of the foregoing, the Company expressly agrees that its
breach of the first sentence of Section 4.7 would cause each Purchaser
irreparable harm, and consents to the granting of injunctive relief by any
court having jurisdiction to preclude any such issuance of securities.


 


5.16         Payment Set Aside.
To the extent that the Company makes a payment or payments to any Purchaser
pursuant to any Transaction Document or a Purchaser enforces or exercises its
rights thereunder, and such payment or payments or the proceeds of such
enforcement or exercise or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside, recovered from, disgorged
by or are required to be refunded, repaid or otherwise restored to the Company,
a trustee, receiver or any other person under any law (including, without
limitation, any bankruptcy law, state or federal law, common law or equitable
cause of action), then to the extent of any such restoration the obligation or
part thereof originally intended to be satisfied shall be revived and continued
in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred.


 


5.17         Usury.  To the extent it may lawfully do so, the
Company hereby agrees not to insist upon or plead or in any manner whatsoever
claim, and will resist any and all efforts to be compelled to take the benefit
or advantage of, usury laws wherever enacted, now or at any time hereafter in
force, in connection with any claim, action or proceeding that may be brought
by any Purchaser in order to enforce any right or remedy under any Transaction
Document.  Notwithstanding any provision
to the contrary contained in any Transaction Document, it is expressly agreed
and provided that the total liability of the Company under the Transaction
Documents for payments in the nature of interest shall not exceed the maximum
lawful rate


 


27

















 


authorized under applicable law (the “Maximum
Rate”), and, without limiting the foregoing, in no event shall any rate of
interest or default interest, or both of them, when aggregated with any other
sums in the nature of interest that the Company may be obligated to pay under
the Transaction Documents exceed such Maximum Rate.  It is agreed that if the maximum contract rate of interest
allowed by law and applicable to the Transaction Documents is increased or
decreased by statute or any official governmental action subsequent to the date
hereof, the new maximum contract rate of interest allowed by law will be the
Maximum Rate applicable to the Transaction Documents from the effective date
forward, unless such application is precluded by applicable law.  If under any circumstances whatsoever,
interest in excess of the Maximum Rate is paid by the Company to any Purchaser
with respect to indebtedness evidenced by the Transaction Documents, such
excess shall be applied by such Purchaser to the redemption of the Debentures
or be refunded to the Company, the manner of handling such excess to be at such
Purchaser’s election.


 


5.18         Independent Nature of
Purchasers’ Obligations and Rights. 
The obligations of each Purchaser under any Transaction Document are
several and not joint with the obligations of any other Purchaser, and no
Purchaser shall be responsible in any way for the performance of the
obligations of any other Purchaser under any Transaction Document.  Nothing contained herein or in any
Transaction Document, and no action taken by any Purchaser pursuant thereto,
shall be deemed to constitute the Purchasers as a partnership, an association,
a joint venture or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Document.  Each Purchaser shall be entitled to
independently protect and enforce its rights, including without limitation the
rights arising out of this Agreement or out of the other Transaction Documents,
and it shall not be necessary for any other Purchaser to be joined as an
additional party in any proceeding for such purpose.  Each Purchaser has been represented by its own separate legal
counsel in their review and negotiation of the Transaction Documents.  For reasons of administrative convenience
only, Purchasers and their respective counsel have chosen to communicate with
the Company through FW.  FW does not
represent all of the Purchasers but only Midsummer.  The Company has elected to provide all Purchasers with the same
terms and Transaction Documents for the convenience of the Company and not
because it was required or requested to do so by the Purchasers.


 


5.19         Liquidated Damages.  The Company’s obligations to pay any
liquidated damages or other amounts owing under the Transaction Documents is a
continuing obligation of the Company and shall not terminate until all unpaid
liquidated damages and other amounts have been paid notwithstanding the fact
that the instrument or security pursuant to which such liquidated damages or
other amounts are due and payable shall have been canceled.


 


***********************


 


28

















 


IN WITNESS
WHEREOF, the parties hereto have caused this Subscription Agreement to be duly
executed by their respective authorized signatories as of the date first
indicated above.


 


	
   

  	
  METRON TECHNOLOGY N.V.

  
	
   

  	
   

  
	
   

  	
  By

  	
  :
   /s/  DOUGLAS J. MC CUTCHEON

  	
   

  
	
   

  	
  Name:

  	
  Douglas J.
  McCutcheon

  
	
   

  	
  Title:

  	
  Senior Vice
  President and Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
  Address for Notice:

  
	
   

  	
  4425 Fortran Drive

  
	
   

  	
  San Jose, California 94134

  
	 
	Attn:  Chief Financial Officer

	 
	Tel:  (408) 719-0456

	 
	Fax:  (408) 719-0452

	 
	 

	 
	 

	
  With a copy to:

  	
  Cooley Godward LLP

  
	
   

  	
  Attn: Suzanne Sawochka Hooper

  
	
   

  	
  5 Palo Alto Square

  
	
   

  	
  3000 El Camino Real

  
	
   

  	
  Palo Alto, CA 94306

  
	
   

  	
  Tel: 650-843-5000

  
	
   

  	
  Fax: 650- 849-7400

  
					



 


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ANNEX A


 


Company Wire Instructions


 


30