TRANSACTION AGREEMENT

Exhibit 10.32

TRANSITION AGREEMENT

by and between

FSI INTERNATIONAL, INC.

and

METRON TECHNOLOGY N.V.

dated as of

OCTOBER 9, 2002

TABLE OF CONTENTS

EXHIBITS

SCHEDULES

TRANSITION AGREEMENT

     This TRANSITION AGREEMENT , made and entered into as of this 9th day of October 2002, by and between FSI INTERNATIONAL, INC., a corporation organized and existing under the laws of the state of Minnesota, United States of America (“ FSI ”), and METRON TECHNOLOGY N.V., a company organized as a Naamloze Vennootschap under the laws of the Netherlands (“ Metron ”).

PREAMBLE

      WHEREAS, FSI and Metron have entered into and are parties to that certain FSI/Metron Distribution Agreement, dated March 31, 1998 (as amended by the 2000 Distribution Agreement, the “ 1998 Distribution Agreement ”), and that certain FSI Surface Conditioning Division/Metron Distribution Agreement, dated July 10, 2000 (the “ 2000 Distribution Agreement ” and, together with the 1998 Distribution Agreement, the “ Distribution Agreements ”).

      WHEREAS, pursuant to the terms of the 1998 Distribution Agreement, Metron has been appointed as distributor for certain microlithography products of FSI for the territories defined therein.

      WHEREAS, pursuant to the terms of the 2000 Agreement, Metron has been appointed as distributor for certain surface conditioning products of FSI and certain immersion system products of FSI’s subsidiary, SCD Mountain View, Inc., for the territories defined therein.

      WHEREAS, FSI and Metron each desire to enter into this Agreement to provide for the terms and conditions under which Metron and the Metron Selling Affiliates (as defined below) will sell and transfer to FSI and the FSI Purchasing Affiliates (as defined below), and FSI and the FSI Purchasing Affiliates will purchase from Metron and the Metron Selling Affiliates, all distribution and other rights granted to Metron under the Distribution Agreements for the distribution and servicing of the FSI products in all areas of the world except Israel.

      WHEREAS, in connection with the transactions contemplated by this Agreement, FSI and Metron have agreed to enter into a distribution agreement pursuant to which FSI will appoint Metron its distributor for products of FSI for the territory of Israel.

      NOW, THEREFORE, in consideration of the premises, the respective covenants and commitments of the parties set forth herein, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, FSI, for and on behalf of itself and its Affiliates, and Metron, for and on behalf of itself and its Affiliates, hereby agree as follows:

ARTICLE I
DEFINITIONS; INTERPRETATION

      1.1 Terms Defined in this Agreement. For purposes of this Agreement, where written with an initial capital letter, the following terms, words and phrases shall have the following respective meanings:

      “ Additional Cash Advance ” has the meaning given such term in Section 2.3(a).

      “ Affiliate ” means, with respect to any Entity, any other Entity controlled by, under common control with, or which controls such Entity through (i) the ownership, either directly or indirectly, of more than 50% of the voting shares or equity interests of such Entity, (ii) the right to elect the majority of the directors or members of any similar managing body of such Entity (except by reason of the occurrence of a contingency) or (iii) the right to manage and control such Entity pursuant to contract; provided that, for purposes of this Agreement, m.FSI Ltd shall not be an Affiliate of FSI.

      “Aging Spare Parts Inventory” means Spare Parts held in inventory by Metron or any Metron Selling Affiliate which, in the case of SCD/System Products parts, were purchased more than one year prior to Closing Date and, in the case of MLD/System Products Parts, were purchased more than two years prior to the Closing Date.

      “Agreement” and “this Agreement” means this Transition Agreement, including all exhibits and schedules hereto.

      “Base Cost” means, in the case of Products, Spare Parts and Demonstration Equipment in Metron’s inventory and to be repurchased by FSI hereunder, the original invoice price for such Products, Spare Parts and Demonstration Equipment as converted into the relevant local currency, adjusted from time to time for currency rate fluctuations and carried on the books and records of Metron or the relevant Metron Selling Affiliate.

      “Cash Advance” has the meaning given such term in Section 2.3(a).

      “Closing” has the meaning given such term in Section 8.1.

      “Closing Date” means the date on which the Closing is completed pursuant to the terms of Section 8.1.

      “Closing Date Product Purchase Orders” has the meaning given such term in Section 4.1(c).

      “Closing Date Service/Applications Support Contracts” has the meaning given such term in Section 4.4(c).

      “Closing Date Spare Parts Purchase Orders” has the meaning given such term in Section 4.3(c).

      “Closing Date System Start-Ups” has the meaning given such term in Section 4.2(a).

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      “ Closing Date Warranty Obligations ” has the meaning given such term in Section 4.5(d).

     “ Common Parts ” has the meaning given such term in Section 3.1(d).

      “ Confidential Information ” has the meaning given such term in Section 11.7.

     “ Deductible Amount ” has the meaning given such term in Section 12.3.

     “ Demonstration Equipment ” has the meaning given such term in Section 3.2(b).

     “ Demonstration Equipment Listing ” has the meaning given such term in Section 3.2(a).

     “ Demonstration Equipment Repurchase Price ” has the meaning given such term in Section 3.2(c).

      “ Distribution Agreements ” has the meaning given such term in the Preamble to this Agreement.

      “ Distribution Business ” means the business of, and right in and to, the distributing, marketing, selling and servicing of the Products under the Distribution Agreements as carried on by Metron and its Affiliates.

      “ Effective Date ” means the date of this Agreement.

      “ Employee Benefits ” means any retirement, pension, profit sharing, bonus, stock option, restricted stock, deferred compensation, holiday pay, bonus, commission, health, hospitalization, disability, death, insurance or other employee or fringe benefit plan, scheme, program or arrangement.

      “ Entity ” means any association, corporation, partnership, limited liability company, trust or other entity (excluding any natural person).

      “ Estimated Purchase Price ” has the meaning given such term in Section 2.4(a).

      “ FSI ” has the meaning given such term in the first paragraph of this Agreement.

      “ FSI Closing Date Payment ” has the meaning given such term in Section 2.4(b).

      “ FSI Holdback Amount ” has the meaning given such term in Section 2.4(b).

      “ FSI Indemnified Parties ” has the meaning given such term in Section 12.1.

      “FSI Purchasing Affiliates” means the Affiliates of FSI existing or to be existing as of the Closing Date and listed on Exhibit A attached hereto which will purchase inventory and equipment and assume contracts and service obligations from the Metron Selling Affiliates, all as more particularly described in Articles III and IV.

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      “FSI Scheme” means the Group Personal Pension Scheme to be established by FSI or its Affiliate in the United Kingdom as soon as reasonably practical after the Closing Date for the benefit of FSI’s United Kingdom employees, including the Transferred Employees in the United Kingdom.

      “ Indemnified Party ” has the meaning given such term in Section 12.3.

      “ Indemnifying Party ” has the meaning given such term in Section 12.3.

      “ Initial Cash Advance ” has the meaning given such term in Section 2.3(a).

      “Inventory and Equipment Payments ” has the meaning given such term in Section 2.2.

      “Inventory Repurchase Price ” has the meaning given such term in Section 3.1(c).

      “ Israel Distribution Agreement ” means the distribution agreement between FSI and Metron which shall be executed at the Closing substantially in the form attached hereto as Exhibit B .

      “ Israel Distribution Business ” means, before the Closing Date, the business of distributing, marketing, selling and servicing the Products in Israel under the Distribution Agreements, and after the Closing Date, the business of distributing, marketing, selling and servicing the Products in Israel under the Israel Distribution Agreement.

      “ Knowledge of FSI ” means the actual knowledge of one or more of the individuals listed on Exhibit C , and the knowledge that such individuals should reasonably be expected to have based upon the exercise of duties and responsibilities consistent with their respective offices and areas of management responsibility.

      “ Knowledge of Metron ” means the actual knowledge of one or more of the individuals listed on Exhibit D , and the knowledge that such individuals should reasonably be expected to have based upon the exercise of duties and responsibilities consistent with their respective offices and areas of management responsibility.

      “ Legacy Products ” has the meaning given such term in Schedule 11.1 attached hereto.

      “Lien” means any mortgage, security interest, lien (including tax and environmental liens), claim, charge, pledge, option, encumbrance, agreement, voting trust, proxy or other arrangement, and all rights of third parties, including any right of usufruct, restriction or limitation of any kind or nature whatsoever, other than (i) liens for taxes not yet due and payable or which are being contested in good faith, (ii) statutory liens arising in the ordinary course of business such as landlords’ carriers’, warehousemens’, mechanics’ materialmens’, suppliers’ and similar liens, and (iii) liens arising by operation of law which are not material to the asset to which the lien attaches.

      “ Listing ” means each of the Closing Date Service/Applications Support Contracts Listing, the Demonstration Equipment Listing, the Products and Spare Parts Inventory Listing, the Products Purchase Order Listing, the System Start-Up Listing, the Spare Parts Purchase

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Order Listing, the Service/Applications Support Contract Listing and the Warranty Listing and each update to such listings required to be delivered in accordance with this Agreement.

      “Losses” has the meaning given such term in Section 12.1.

      “Metron” has the meaning given such term in the first paragraph of this Agreement.

      “Metron Closing Date Payment” has the meaning given such term in Section 2.4(c).

      “Metron Indemnified Parties” has the meaning given such term in Section 12.2.

      “Metron Scheme” means the Group Personal Pension Scheme maintained by Metron or its Affiliate in the United Kingdom for employees of such Affiliate located in the United Kingdom.

      “Metron Selling Affiliates” means the Affiliates of Metron listed on Exhibit A attached hereto which will sell inventory and equipment and assign contracts and service obligations to the FSI Purchasing Affiliates as more particularly described in Articles III and IV.

      “Metron Shares” has the meaning given such term in Section 2.4(b).

      “ Metron Shares Value ” has the meaning given such term in Section 2.4(b).

      “ Metron Stock ” means the common shares of Metron, par value EUR 0.44 per share, of Metron.

      “ MTDC ” means Metron Technology Distribution Corporation, a California corporation and wholly owned subsidiary of Metron.

      “MTDC Inventory” has the meaning given such term in Section 9.1(o).

      “ Net Invoice Price ” means, with respect to a Closing Date Product Purchase Order or a Closing Date Spare Parts Purchase Order, the amount payable by the customer indicated on such purchase order less any amounts in respect of shipping, handling, freight, customs, duties, value added taxes, sales taxes and other similar taxes and payments.

      “ Note ” has the meaning given such term in Section 2.3(a).

      “Permits” has the meaning given such term in Section 9.1(h).

      “Pre-Closing Accounts Receivable” as the meaning given such term in Section 5.1(a).

      “Premium” has the meaning given such term in Section 2.2.

      “Product Commission” has the meaning given such term in Section 4.1(c).

      “Product Inventory” has the meaning given such term in Section 3.1(a).

      “Product Purchase Order Listing” has the meaning given such term in Section 4.1(b).

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      “Product Registrations” means registrations, permits, authorizations, approvals and filings with any governmental authority required for the marketing, distribution or sale of any Products or Spare Parts in connection with the Distribution Business (excluding the Israel Distribution Business).

      “Products” means the products subject to the Distribution Agreements (as the term Products is defined in each of such Distribution Agreements).

      “Products and Spare Parts Inventory Listing” has the meaning given such term in Section 3.1(b).

      “Purchase Price” has the meaning given such term in Section 2.2.

      “Rules” has the meaning given such term in Section 13.1.

      “Security Agreement” has the meaning given such term in Section 2.3(a).

      “Service/Applications Support Compensation” has the meaning given such term in Section 4.4(c).

      “Service/Applications Support Contract” has the meaning given such term in Section 4.4(a).

      “Service/Applications Support Contract Listing” has the meaning given such term in Section 4.4(b).

      “Spare Parts” means the spare parts related to the Products subject to the Distribution Agreements (as the term Spare Parts is defined in each of such Distribution Agreements).

      “Spare Parts Commission” has the meaning given such term in Section 4.3(c).

      “Spare Parts Inventory” has the meaning given such term in Section 3.1(a).

      “Spare Parts Purchase Order Listing” has the meaning given such term in Section 4.3(b).

      “System Start-Up Listing” has the meaning given such term in Section 4.2(c).

      “System Start-Up Compensation” has the meaning given such term in Section 4.2(c).

      “Termination Date” has the meaning given such term in Section 9.3.

      “Transfer Amount” means, in relation to an individual employee, the proceeds of the policy in respect of the Metron Scheme.

      “Transferred Employee Tools and Equipment Purchase Price” has the meaning given such term in Section 6.4.

      “Transferred Employees” has the meaning given such term in Section 6.1.

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      “Transition Period” means the period commencing on the Effective Date and ending on the Closing Date.

      “Transition Plan” means the plan to be agreed by FSI and Metron in accordance with Section 11.5 and thereafter attached hereto as Schedule 11.5 for transitioning the Distribution Business from Metron to FSI during the Transition Period.

      “Warranty Compensation” has the meaning given such term in Section 4.5(d).

      “Warranty Listing” has the meaning given such term in Section 4.5(c).

      “1998 Distribution Agreement” has the meaning given such term in the Preamble to this Agreement.

      “2000 Distribution Agreement” has the meaning given such term in the Preamble to this Agreement.

      1.2 Interpretation. Whenever used in this Agreement, the singular shall be construed to include the plural and vice versa, where applicable, and the use of the masculine, feminine or neuter gender shall include the other genders. The word “including” means “including without limitation”. The subject matter and language of this Agreement has been the subject of negotiations between the parties and their respective counsel, and this Agreement has been jointly prepared by their respective counsel. Accordingly, this Agreement shall not be construed against any party on the basis that this Agreement was drafted by such party or its counsel. References to Sections, Articles, exhibits or schedules herein shall be to the Sections, Articles, exhibits and schedules contained in or attached to this Agreement, unless otherwise specified.

ARTICLE II
PURCHASE OF DISTRIBUTION BUSINESS

      2.1 Sale and Purchase. On the terms and subject to the conditions of this Agreement, Metron agrees to sell and FSI agrees to purchase on the Closing Date, all of Metron’s right, title and interest in the Distribution Business, excluding the Israel Distribution Business.

      2.2 Consideration. The consideration for the early termination of the Distribution Agreements in accordance with Section 2.8 shall be U.S. $2.75 million (the “Premium ”). The amount of (i) the Premium plus (ii) the payments of the Inventory Repurchase Price (which shall be based on the Products and Spare Parts Inventory Listing as of the Closing Date and subject to application of the limitations on FSI inventory repurchase obligations in Section 3.3) and the Demonstration Equipment Repurchase Price (which shall be based on the Demonstration Equipment Listing as of the Closing Date) to be made by FSI in respect of the repurchase of Product Inventory, Spare Parts Inventory and Demonstration Equipment in accordance with Article III hereof (such payments, the “Inventory and Equipment Payments” ) plus (iii) any value added taxes assessable on the Product Inventory, Spare Parts Inventory and Demonstration Equipment, to the extent required by law, to be paid by FSI plus (iv) the payment of the Transferred Employee Tools and Equipment Purchase Price to be made by FSI in respect of the

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purchase of certain property used by the Transferred Employees in accordance with Section 6.4 less (v) the System Start-Up Compensation (which shall be based on the System Start-Up Listing as of the Closing Date and the parties’ agreement as to the percentage completion for each Closing Date System Start-Up) to be paid by Metron in accordance with Section 4.2 less (vi) the Service/Applications Support Compensation (which shall be based on the Service/Applications Support Contract Listing as of the Closing Date) to be paid by Metron in accordance with Section 4.4 less (vii) the Warranty Compensation (which shall be based on the Warranty Listing as of the Closing Date) to be paid by Metron in accordance with Section 4.5(d) is referred to, collectively, as the “ Purchase Price ”. Metron and FSI each agree to cooperate in good faith to take such actions as the other party may reasonably request (after consultation with its financial advisor) in order to ensure that the payment of the Premium is exempt from value added taxes under applicable law, including cooperating in such other party’s request (at the expense of such other party) for a ruling from the appropriate taxing authorities in The Netherlands that the payment of the Premium is exempt from value added tax under the Laws of the Netherlands.

      2.3 Cash Advance; Note and Security Agreement.

     (a)  On the Effective Date, as a prepayment of a portion of the Purchase Price to be paid on the Closing Date, FSI will make an advance payment to Metron in an initial principal amount of U.S. $3.0 million (the “Initial Cash Advance” ) in the form of a loan made pursuant to the Note , dated the Effective Date, by Metron to FSI and attached hereto as Exhibit E (the “ Note ”) and related Security Agreement, dated the Effective Date, by and between MTDC and FSI (the “Security Agreement” ). The Note will provide that FSI will make additional advance payments (each, an “Additional Cash Advance” ) as prepayments of a portion of the Purchase Price to be paid on the Closing Date in an aggregate amount up to U.S. $1.0 million pursuant to the Note and the Security Agreement upon satisfaction of the conditions set forth in Section 2.3(b). The amount of the Initial Cash Advance and the aggregate amount of the Additional Cash Advances, the “ Cash Advance ”.

     (b)  Within thirty (30) days after the Effective Date, FSI will use its commercially reasonable efforts to review and examine, on a country by country basis, the Product Inventory and the Spare Parts Inventory that is subject to repurchase hereunder to determine the adequacy and sufficiency of such inventory as collateral for making Additional Cash Advances. If, after such review and examination, the Product Inventory and Spare Parts Inventory in any country is reasonably determined to be Product Inventory and Spare Parts Inventory that meets the requirements of Section 3.3 hereunder for repurchase by FSI hereunder, FSI will make an Additional Cash Advance to Metron under the Note based on the gross book value of the amount of such Product Inventory and Spare Parts Inventory in such country that will be held by Metron or the applicable Metron Selling Affiliate as of, and be transferred to FSI on, the Closing Date (taking into account historical and projected sales and replenishment of such inventory in the applicable country) under the terms of this Agreement. To the extent that the Product Inventory and Spare Parts Inventory in the applicable country is not subject to a Lien, FSI may request that any such Additional Cash Advance be subject to a first priority Lien in favor of FSI on such Product Inventory and Spare Parts Inventory, and Metron shall, and shall cause the applicable Metron Selling Affiliate to, cooperate in the execution and delivery of appropriate agreements and instruments to evidence such Lien; provided , that obtaining such Lien shall not be a

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condition of FSI making an Additional Cash Advance, and any costs and expenses incurred in obtaining such first priority Liens shall be paid by FSI.

      2.4 Payments on Closing.

     (a)  No later than five (5) business days prior to the Closing Date, FSI and Metron shall agree on an estimate of the aggregate Purchase Price (the “ Estimated Purchase Price ”) equal to (i) the Premium, (ii) an estimate of the Inventory and Equipment Payments (based on the most recent Products and Spare Parts Inventory Listing and the Demonstration Equipment Listing delivered by Metron in accordance with Sections 3.1(b) and 3.1(c) and subject to application of the limitations on FSI inventory repurchase obligations in Section 3.3), (iii) an estimate of any value added taxes assessable on the Product Inventory, Spare Parts Inventory and Demonstration Equipment, to the extent required by law, (iv) an estimate of the Transferred Employee Tools and Equipment Purchase Price, (v) an estimate of the System Start-Up Compensation (based on the most recent System Start-Up Listing delivered by Metron in accordance with Section 4.2(b) and the parties’ good faith estimate of Closing Date System Start-Ups and related percentage completion), (vi) an estimate of the Service/Applications Support Compensation (based on the most recent Service/Applications Support Contract Listing delivered by Metron in accordance with Section 4.4(b)), and (vii) an estimate of the Warranty Compensation (based on the most recent Warranty Listing delivered by Metron in accordance with Section 4.5(c)). Each such Listing, and each such estimate, shall be separately identified for each Metron Selling Affiliate listed in Exhibit A .

     (b)  On the Closing Date, if the amount of the Estimated Purchase Price is greater than the amount of the Cash Advance, FSI shall for itself and on behalf of the FSI Purchasing Affiliates (i) pay to Metron, which shall take receipt for itself and on behalf of the Metron Selling Affiliates, an amount (the “ FSI Closing Date Payment ”) in United States Dollars equal to the Estimated Purchase Price less the amount of the Cash Advance and less the FSI Holdback Amount and (ii) shall forgive all amounts outstanding under the Note in respect of the Cash Advance. For purposes of this Agreement, the “FSI Holdback Amount” shall be an amount equal to the lesser of (x) U.S. $750,000 and (y) the difference between the Estimated Purchase Price and the amount of the Cash Advance. Subject to obtaining the required ratification or approval by the shareholders of Metron, a portion of the FSI Closing Date Payment in an amount equal to U.S. $2,750,000 (the “ Metron Shares Value ”) shall be made by FSI’s assignment and transfer to Metron or its designated agent of share certificates representing 1,154,492 shares of Metron Common Stock (the “Metron Shares” ). In the event that such shareholder ratification or approval is not obtained prior to the Closing Date, the FSI Closing Date Payment shall consist entirely of cash. In addition, in the event that the Metron Shares Value exceeds the FSI Closing Date Payment, the number of Metron Shares shall be reduced to a number representing the amount of the FSI Closing Date Payment. The cash portion of the FSI Closing Date Payment shall be made by wire transfer of immediately available funds to an account designated in writing by Metron.

     (c) On the Closing Date, if the Estimated Purchase Price is less than the amount of the Cash Advance, (i) Metron shall pay FSI an amount (the “ Metron Closing Date Payment ”) in United States Dollars equal to the Cash Advance less the amount of the Estimated Purchase Price and (ii) FSI shall forgive all amounts outstanding under the Note in respect of the Cash Advance.

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The Metron Closing Date Payment shall be made by wire transfer of immediately available funds to an account designated in writing by FSI.

      2.5 Final Purchase Price Payment.

     (a)  No later than sixty (60) days after the Closing Date, the parties shall agree on the Purchase Price for purposes of adjusting the FSI Closing Date Payment or the Metron Closing Date Payment, as applicable, made on the Closing Date. In determining the Purchase Price the parties shall cooperate with each other and provide each other with reasonable access to all books and records relating to the Distribution Business in their respective possession necessary to determine, review and verify the components of the Purchase Price. If the parties are not able to agree on the Purchase Price within one hundred twenty (120) days after the Closing Date, any disputes related thereto shall be resolved by arbitration in accordance with Article XIII.

     (b)  If FSI made the FSI Closing Date Payment and the Purchase Price, as determined in accordance with this Section 2.5,

In the event that the number of Metron Shares was reduced in accordance with Section 2.4(b) and subject to obtaining the required ratification or approval by the shareholders of Metron, FSI may pay any amount owing under clauses (i) or (ii) of this Section 2.5(b), or any portion of such amount, by FSI’s assignment and transfer to Metron or its designated agent of Metron Shares so long as the number of Metron Shares so assigned, together with any Metron Shares assigned pursuant to Section 2.4(b) in respect of the FSI Closing Date Payment, do not exceed the Metron Shares Value. For the purposes of determining the number of Metron Shares to be assigned and transferred, the value of each Metron Share shall be the same as set forth in Section 2.4(b). In the event such shareholder ratification or approval is not obtained prior to the Closing Date, any amount owing by FSI under clauses (i) or (ii) of this Section 2.5(b) shall be paid entirely in cash.

     (c)  If Metron made the Metron Closing Date Payment and the Purchase Price, as determined in accordance with this Section 2.5,

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      2.6 Offset. The parties agree that any amounts owed by a party hereunder are subject to the right of such party to offset such amounts by amounts owed to such party by the other party hereunder. For the avoidance of doubt, any amounts owed by FSI to Metron in respect of the Purchase Price may be offset against amounts owed by Metron to FSI under the Note in respect of the Cash Advance. Except for offsets of amounts owed by FSI to Metron in respect of the Purchase Price against amounts owed by Metron to FSI under the Note, all offsets shall require the prior written approval of each of the Chief Financial Officers of Metron and FSI.

      2.7 Single Payment. Metron and FSI agree that all cash payments required to be made under this Agreement shall be made solely by FSI to Metron in United States Dollars. Payment under this Article II by FSI to Metron shall constitute payment in full by FSI and the FSI Purchasing Affiliates of all amounts due and payable under this Article II, and neither FSI nor the relevant FSI Purchasing Affiliates shall have any obligations to make any payments directly to the Metron Selling Affiliates. Metron undertakes to transfer to each of the Metron Selling Affiliates such amounts of the Purchase Price to which each such Affiliate may be entitled based on its ownership or possession of Product Inventory, Spare Parts Inventory and/or Demonstration Equipment transferred pursuant to Articles III and IV.

      2.8 Termination of Distribution Agreements; Effectiveness of Israel Distribution Agreement.

     (a)  The parties agree on behalf of themselves and their respective Affiliates that, as of the Closing Date, the Distribution Agreements shall terminate in accordance with their terms but subject to the terms of this Agreement. Except as expressly provided in this Agreement, each party and such party’s insurers, successors and assigns, hereby releases and forever discharges, effective as of the Closing Date, the other party hereto and its Affiliates, shareholders, directors, officers, employees, agents, consultants, successors and assigns from any and all liabilities, claims, demands and causes of action, either in law or in equity, known or unknown, liquidated or unliquidated, which have arisen or may arise out of or are in any way connected with the Distribution Agreements on account of any act, omission, event, occurrence, representation, warranty, failure, default or breach, actual or asserted, of any party hereto or its officers, employees, agents, consultants on or prior to the Closing Date; provided, however , the parties agree that the foregoing shall not apply to those provisions of the Distribution Agreements and associated remedies that, in accordance with Section 5.6 of each Distribution Agreement, survive the Closing Date. The parties further agree on behalf of themselves and their respective Affiliates that, as of the Effective Date, their respective rights to terminate the Distribution Agreements under the terms of such agreements shall be suspended and of no force and effect until such time as this Agreement is terminated in accordance with its terms.

     (b)  Subject to all of the terms and conditions of this Agreement, on the Closing Date, Metron and FSI shall execute the Israel Distribution Agreement.

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ARTICLE III
REPURCHASE OF INVENTORY AND EQUIPMENT

      3.1 Repurchase of Inventory .

     (a)  Subject to FSI’s right of inspection and approval provided in Section 3.3, on the Closing Date, the relevant FSI Purchasing Affiliates shall repurchase from the relevant Metron Selling Affiliates (i) the inventory of Products (such inventory, “Product Inventory” ) as of the Closing Date and (ii) Spare Parts inventory (such inventory, “Spare Parts Inventory” ) as of the Closing Date, provided that in each case such inventory was purchased by Metron or the relevant Metron Selling Affiliate, with respect to SCD system Products, within one (1) year of the Closing Date, and, with respect to MLD system Products, within two (2) years of the Closing Date. The foregoing shall exclude Product Inventory and Spare Parts Inventory held for sale in Israel.

     (b)  On or before the Effective Date, Metron has provided FSI with a true and correct summary schedule of the Product Inventory and the Spare Parts Inventory together with all Aging Spare Parts Inventory held by Metron or the Metron Selling Affiliates as of August 31, 2002, which schedule is attached hereto as Schedule 3.1(b) . No later that thirty (30) days from the Effective Date, Metron shall provide FSI with a detailed list (a “ Products and Spare Parts Inventory Listing ”) of each of the Product Inventory and the Spare Parts Inventory together with all Aging Spare Parts Inventory held by Metron or the Metron Selling Affiliates as of August 31, 2002. Within thirty (30) days following the end of each calendar month from the Effective Date to the Closing Date, Metron shall provide FSI with an updated Products and Spare Parts Inventory Listing, as of the end of such calendar month, including a listing as of the Closing Date; provided, that the Products and Spare Parts Inventory Listing to be delivered within thirty (30) days from the end of October 2002 shall include Products and Spare Parts Inventory Listings as of the end of September 2002 and as of the end of October 2002. Such Products and Spare Parts Inventory Listings shall indicate the relevant Metron Selling Affiliate owning such inventory and shall further specify the location, cost and part or product number of each Spare Part or Product, as the case may be.

     (c)  The price to be paid by FSI to Metron for receipt on behalf of itself and each Metron Selling Affiliate on the Closing Date for Product Inventory and Spare Parts Inventory as of the Closing Date (the “Inventory Repurchase Price” ) shall be equal to (i) the gross book value of such Product Inventory and Spare Parts Inventory as reflected in the accounts of Metron and the Metron Selling Affiliates consisting of the Base Cost, customs duties and freight, as and if adjusted for currency translation plus (ii) applicable value added taxes if assessable on Metron’s Base Cost for such Product Inventory and Spare Parts Inventory under the relevant laws of the country in which the Product Inventory and Spare Parts Inventory is repurchased. Payment of the Inventory Repurchase Price shall be made in accordance with the terms of Article II governing payment of the Purchase Price. For purposes of reviewing and verifying the Inventory Repurchase Price, including the Base Cost, customs duties and freight, Metron shall provide FSI at FSI’s request with reasonable access to the books and records of Metron and the Metron Selling Affiliates relating to the components of Base Cost, customs and freight for the Product Inventory and Spare Parts Inventory to be purchased by FSI in accordance with this Section 3.1.

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     (d)  Product Inventory and Spare Parts Inventory shall not include any inventory of Common Parts, and the FSI Purchasing Affiliates shall have no obligation to repurchase any Common Parts held by the Metron Selling Affiliates. For purposes of this Agreement, “ Common Parts ” means parts that were not originally purchased from FSI and that are used or sold by Metron both in the conduct of the Distribution Business and in the conduct of other businesses in which Metron is engaged.

     (e)  If and to the extent that any Metron Selling Affiliate possesses Aging Spare Parts Inventory identified in the Products and Spare Parts Inventory Listing, FSI shall have the right, but not the obligation, to cause the relevant FSI Purchasing Affiliate to purchase all or any part of any such Aging Spare Parts Inventory on the Closing Date on the terms set forth in Section 3.1(c) above. If and to the extent FSI does not cause its Affiliates to purchase any amount of such Aging Spare Parts Inventory or any Product Inventory or Spare Parts Inventory in accordance with Section 3.3(a) as of the Closing Date, Metron shall make a written offer to FSI for the sale of all such Aging Spare Parts Inventory, Product Inventory or Spare Parts Inventory not purchased at the Closing within sixty (60) days after the Closing Date. Such offer shall set forth a detailed list of the Aging Spare Parts Inventory, Product Inventory or Spare Parts Inventory to be purchased together with the price and delivery terms for such Aging Spare Parts Inventory, Product Inventory or Spare Parts Inventory. Such list shall indicate the relevant Metron Selling Affiliate owning such inventory and shall further specify, by Spare Part, the quantity, location, price, and part description and number. FSI shall have fifteen (15) days in which to accept or reject such offer. In the event FSI rejects the offer, Metron and its Affiliates shall be free to sell such Aging Spare Parts Inventory, Product Inventory and Spare Parts Inventory notwithstanding the terms of Section 11.1.

     (f)  Within thirty (30) days of the Effective Date, Metron shall provide FSI with (i) its current Spare Parts price list and the methodology it uses for determining the prices Metron and the Metron Selling Affiliates quote to customers for Spare Parts and (ii) a list of any Spare Parts, service support and applications support price lists that are specific to any of customers of Metron and the Metron Selling Affiliates.

      3.2 Repurchase of Equipment .

     (a)  On the Closing Date FSI shall repurchase from Metron its demonstration equipment used for the sale of Products under the Distribution Agreements (excluding such equipment that is used for the sale of Products in Israel) (such equipment, the “Demonstration Equipment” ) as of the Closing Date.

     (b)  No later than thirty (30) days from the Effective Date, Metron shall provide FSI with a detailed list (a “Demonstration Equipment Listing” ) of the Demonstration Equipment purchased from FSI by Metron and held by Metron or its Affiliates as of August 31, 2002. Such Demonstration Equipment Listing shall indicate Metron or the relevant Metron Selling Affiliate owning or possessing such Demonstration Equipment and shall further specify the product number, location and current book value of each such item of Demonstration Equipment. Within thirty (30) days following the end of each fiscal quarter of Metron from the Effective Date to the Closing Date, or at such other times as the parties may agree, Metron shall provide FSI with an updated Demonstration Equipment Listing, including a listing as of Closing Date.

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     (c)  The price to be paid by FSI or the relevant FSI Purchasing Affiliate to Metron (for receipt on behalf of itself and each relevant Metron Selling Affiliate) on the Closing Date for Demonstration Equipment as of the Closing Date (the “Demonstration Equipment Repurchase Price” ) shall be (i) the book value of such equipment, plus (ii) value added taxes assessable on Metron’s Base Cost for such equipment under the laws of the relevant country in which the equipment is repurchased. Payment of the Demonstration Equipment Repurchase Price shall be made in accordance with the terms of Article II governing payment of the Purchase Price.

      3.3 Limitations on Repurchase Obligations .

     (a)  Notwithstanding the foregoing, FSI reserves the right to reasonably reject and shall have no obligation to repurchase Product Inventory or Spare Parts Inventory (i) which is not in the condition (including original packaging) as originally delivered to Metron or (ii) which does not meet FSI’s then current design standards. In addition, FSI may reject, in its sole discretion, and FSI shall have no obligation to repurchase Product Inventory or Spare Parts Inventory that was purchased by Metron or the relevant Metron Selling Affiliate, with respect to SCD system Products, more than one (1) year prior to the Closing Date, and, with respect to MLD system Products, more than two (2) years prior to the Closing Date.

     (b)  In order to exercise the foregoing rights, FSI and its authorized representatives shall have the right during the Transition Period to review and inspect the Product Inventory, Spare Parts Inventory and Aging Spare Parts Inventory in accordance with the terms of Section 11.2.

      3.4 Returns during Transition Period . During the Transition Period, the parties agree that any returns of Products or Spare Parts shall be governed by the terms of the Distribution Agreements. The terms and conditions of FSI’s then current Spare Parts policy in effect under the Distribution Agreement (including the restrictions on repurchase of obsolete Spare Parts inventory) shall otherwise apply to the repurchase of Spare Parts Inventory hereunder, except to the extent such Spare Parts policy contradicts or is inconsistent with the express terms and conditions in this Article III.

      3.5 Delivery to FSI . Metron shall and shall cause the Metron Selling Affiliates to deliver the Product Inventory, Spare Parts Inventory and Demonstration Equipment purchased by the FSI Purchasing Affiliates on the Closing Date free and clear of all Liens in accordance with the Transition Plan and the written instructions of FSI and pursuant to the documents and instruments to be delivered by Metron pursuant to Section 8.4(b). Any freight and customs charges payable or value added taxes payable in connection with the repurchase by FSI of the Product Inventory, Spare Parts Inventory and Demonstration Equipment shall be paid by FSI and the FSI Purchasing Affiliates. FSI and the FSI Purchasing Affiliates shall specify the shipping terms in writing to Metron no fewer than ten (10) days prior to the date of transfer including the manner of shipment, the identity of the carrier and the shipment destination.

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ARTICLE IV
ASSUMPTION OF PURCHASE ORDERS AND AGREEMENTS

      4.1 Purchase Orders for Products .

     (a)  On the Closing Date, Metron shall, and shall cause the Metron Selling Affiliates to, transfer to the designated FSI Purchasing Affiliates, and the FSI Purchasing Affiliates shall assume, all remaining obligations outstanding under purchase orders for Products outstanding as of the Closing Date to the extent permitted by the terms of each such purchase order. The responsibility for accepting orders for Products, invoicing customers, distributing Products to customers and servicing customers shall transfer from Metron and its Affiliates to FSI or its Affiliates on the Closing Date. The foregoing shall exclude purchase orders for the sale of Products in Israel.

     (b)  No later than thirty (30) days from the Effective Date, Metron shall provide FSI with a detailed list (a “Product Purchase Order Listing” ) of each purchase order for Products outstanding (i.e., remaining to be fulfilled) as of August 31, 2002 (excluding purchase orders for the sale of Products in Israel). The Product Purchase Order Listing shall indicate Metron or the relevant Metron Selling Affiliate holding each order, the applicable customer, customer location, date of acceptance of order, Product description, quantity and value of purchase order and any start-up, installation and commissioning obligations remaining to be fulfilled. Within thirty (30) days following the end of each fiscal quarter of Metron from the Effective Date to the Closing Date, or at such other times as the parties may agree, Metron shall provide FSI with an updated Product Purchase Order Listing, including a listing as of the Closing Date.

     (c)  With respect to purchase orders for Products that are outstanding as of the Closing Date and transferred to and assumed by FSI or the FSI Purchasing Affiliates in accordance with Section 4.1(a) ( “Closing Date Product Purchase Orders” ), FSI, for itself and on behalf of the FSI Purchasing Affiliates, agrees to pay Metron, which shall take receipt on behalf of itself and the Metron Selling Affiliates, the following commissions (each, a “ Product Commission ”) on such Closing Date Product Purchase Orders:

Notwithstanding the foregoing, FSI shall have no obligation to pay the Product Commission on Closing Date Product Purchase Orders with respect to which the Products subject to the order do not ship within twelve (12) months from the Closing Date, so long as such delay in shipment is at the request of the customer or due to action on the part of the customer (including cancellation of the Closing Date Product Purchase Order); provided, however , in the event that a customer cancels a Closing Date Product Purchase Order after the Closing Date and subsequently submits a purchase order for Products that is substantially equivalent (including as to quantity, price, type of Product and delivery location) to the cancelled Closing Date Product Purchase Order and the Products subject to such new purchase order ship within twelve (12) months from the Closing

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Date, FSI shall pay Metron the Product Commission on such purchase order up to the amount that would have been paid in respect of the Product Commission on the cancelled Closing Date Product Purchase Order. The parties agree to conduct their business in the ordinary course during the Transition Period. During the Transition Period, FSI agrees not to encourage customers to either postpone the placement of orders until after March 1, 2003 or to cancel current orders with Metron, and Metron agrees not to encourage customers to accelerate the placement of orders. FSI shall pay amounts owed to Metron in respect of the Product Commission within thirty (30) days after FSI’s shipment of the Products. Metron shall be responsible for transmitting to the appropriate Metron Selling Affiliate any such commissions allocable to such of Metron’s Affiliates.

     (d)  During the Transition Period, FSI and Metron agree to continue the discount sharing arrangements set forth in the Distribution Agreements.

     (e)  Neither Metron nor any of the Metron Selling Affiliates shall have any right to receive any commissions on or otherwise receive remuneration for purchase orders generated or received after the Closing Date for Products or for any other equipment, warranties or services or amounts billed under such purchase orders.

      4.2 System Start-Ups .

     (a)  On the Closing Date, Metron shall, and shall cause the relevant Metron Selling Affiliates to, transfer to FSI or the relevant FSI Purchasing Affiliates, and FSI or the FSI Purchasing Affiliates shall assume, all remaining outstanding obligations for system start-up, installation and commissioning under purchase orders for Products that have been shipped but for which the system start-up, installation and commissioning is not completed as of the Closing Date (collectively, the “ Closing Date System Start-Ups ”). The foregoing shall exclude Closing Date System Start-Ups for Products in Israel.

     (b)  No later than thirty (30) days from the Effective Date, Metron shall provide FSI with a detailed list (a “ System Start-Up Listing ”) of each purchase order for which for system start-up, installation and commissioning remains to be completed as of August 31, 2002. The System Start Up Listing shall indicate Metron or the relevant Metron Selling Affiliate responsible for such System Start-Up, the applicable customer, customer location, date of acceptance of order, system start-up, installation and commissioning to be performed, amount in the purchase order attributable to start-up, installation and commissioning the start-up, installation and commissioning obligations remaining to be fulfilled. Within thirty (30) days following the end of each fiscal quarter of Metron from the Effective Date to the Closing Date, or at such other times as the parties may agree, Metron shall provide FSI with an updated System Start-Up Listing, including a listing as of the Closing Date.

     (c)  With respect to Closing Date System Start-Ups assumed by FSI or the FSI Purchasing Affiliates pursuant to Section 4.2(a), Metron shall compensate FSI for the work remaining to complete all Closing Date System Start-Ups. The amount of compensation to be paid by Metron in respect of such Closing Date System Start-Ups (the “ System Start-Up Compensation ”) shall be determined by the parties by multiplying the remaining percentage completion for each Closing Date System Start-Up by the standard fee charged for start-up,

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installation and commissioning for similar customers purchasing similar Products (or if the fee for start-up, installation and commissioning is separately indicated in the purchase order, by such fee). The parties determination of percentage completion shall be computed by dividing the number of hours provided by Metron’s service engineers as of the Closing Date by the standard total number of service engineer hours provided by Metron for start-up, installation and commissioning for similar customers purchasing similar Products. Payment of the System Start-Up Compensation shall be made in accordance with the terms of Article II governing payment of the Purchase Price.

      4.3 Purchase Orders for Spare Parts .

     (a)  On the Closing Date, Metron shall, and shall cause the Metron Selling Affiliates to, transfer to FSI or the relevant FSI Purchasing Affiliates, and FSI or the FSI Purchasing Affiliates shall assume, all remaining obligations outstanding under purchase orders for Spare Parts outstanding as of the Closing Date, to the extent permitted by the terms of each such purchase order. The responsibility for accepting orders for Spare Parts, invoicing customers, distributing Spare Parts to customers and servicing customers shall transfer from Metron or its Affiliates to FSI or its Affiliates on the Closing Date. The foregoing shall exclude purchase orders for the sale of Spare Parts in Israel.

     (b)  No later than thirty (30) days from the Effective Date, Metron shall provide FSI with a detailed list (a “ Spare Parts Purchase Order Listing ”) of each purchase order for Spare Parts outstanding (i.e., remaining to be fulfilled) as of August 31, 2002 (excluding purchase orders for the sale of Spare Parts in Israel). The Spare Parts Purchase Order Listing shall indicate Metron or the relevant Metron Selling Affiliate holding each such order, the applicable customer, customer location, date of acceptance of order, spare parts description and quantity and value of purchase order. Within thirty (30) days following the end of each fiscal quarter of Metron from the Effective Date to the Closing Date, or at such other times as the parties may agree, Metron shall provide FSI with an updated Spare Parts Purchase Order Listing, including a listing as of the Closing Date.

     (c)  With respect to purchase orders for Spare Parts that are outstanding as of the Closing Date and transferred to and assumed by FSI or its Affiliates in accordance with Section 4.3(a) (“ Closing Date Spare Parts Purchase Orders ”), FSI for itself and on behalf of the FSI Purchasing Affiliates, agrees to pay Metron which shall take receipt on behalf of itself and the Metron Selling Affiliates, a commission equal to [***] of the Net Invoice Price (the “ Spare Parts Commission ”). Notwithstanding the foregoing, FSI shall have no obligation to pay the Spare Parts Commission on Closing Date Spare Parts Purchase Orders with respect to which the Spare Parts subject to the order do not ship within twelve (12) months from the Closing Date, so long as such delay in shipment is at the request of the customer or due to action on the part of a customer (including cancellation of the Closing Date Spare Parts Purchase Order); provided, however , in the event that a customer cancels a Closing Date Spare Parts Purchase Order after the Closing Date and subsequently submits a purchase order for Spare Parts that is substantially equivalent (including as to quantity, price, type of Spare Part and delivery location) to the cancelled Closing Date Spare Parts Purchase Order and the Spare Parts subject to such new purchase order ship within twelve (12) months from the Closing Date, FSI shall pay Metron the Spare Parts Commission on such purchase order up to the amount that would have been paid in

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respect of the Spare Parts Commission on the cancelled Closing Date Spare Parts Purchase Order. FSI shall pay amounts owed to Metron in respect of the Spare Parts Commission within thirty (30) days after FSI’s shipment of the Spare Parts. Metron shall be responsible for transmitting to the appropriate Metron Selling Affiliate any such commissions allocable to such of Metron’s Affiliates.

     (d)  Neither Metron nor any of the Metron Selling Affiliates shall have any right to receive any commissions on or otherwise receive remuneration for purchase orders generated or received after the Closing Date for Spare Parts or for any other equipment, warranties or services or amounts billed under such purchase orders.

      4.4 Assumption of Service and Support Contracts .

     (a)  On the Closing Date, Metron shall, and shall cause the Metron Selling Affiliate to, transfer to FSI or the relevant FSI Purchasing Affiliates, and FSI or the FSI Purchasing Affiliates shall assume, all remaining obligations incurred in the ordinary course of business and outstanding under service contracts, preventative maintenance and application support contracts for Products or for Spare Parts entered into in the ordinary course of business by Metron or the Metron Selling Affiliates with customers purchasing Products or Spare Parts (each such contract, a “ Service/Applications Support Contract ”) outstanding as of the Closing Date to the extent permitted by the terms of each such contract. The foregoing shall exclude Service/Applications Support Contract for Products and Spare Parts in Israel.

     (b)  No later than thirty (30) days from the Effective Date, Metron shall provide FSI with a detailed list (a “ Service/Applications Support Contract Listing ”) of each Ser