Exhibit 10.38

AMENDMENT
TO
SHAREHOLDERS AGREEMENT
Dated June 5, 1991
among
FSI INTERNATIONAL, INC.
and
MITSUI & CO., LTD.
and
CHLORINE ENGINEERS CORP., LTD.
and
MBK HOLDINGS LLC

     THIS AMENDMENT TO SHAREHOLDERS AGREEMENT (“Amendment”) is entered into as
of 17th day of September 2004, among FSI INTERNATIONAL, INC., a company
organized and existing under the laws of the state of Minnesota, U.S.A. (“FSI”),
MITSUI & CO. LTD., a company organized and existing under the laws of Japan
(“MBK”), CHLORINE ENGINEERS CORP. LTD., a company organized and existing under
the laws of Japan (“CEC”) and MBK HOLDINGS LLC, a company organized and existing
under the laws of Japan (“MBH”).

RECITALS

     A. FSI, MBK and CEC are parties to a Shareholders Agreement dated June 5,
1991 (such agreement, as amended, is hereinafter called the “Shareholders
Agreement”), which agreement, among other things, defines the scope of the
products and technology of FSI that are the subject of the joint venture
company, m•FSI Ltd. (“m•FSI”), which was created under the terms and conditions
of the Shareholders Agreement.

     B. Section 13.1 of the Shareholders Agreement states that the business
purpose of m•FSI is limited to the exploration and development of the Japanese
market for FSI products and CEC products. Article 12 of the Shareholders
Agreement states that m•FSI may not enter into any new businesses or new product
areas or make certain expenditures or financial commitments without the express
prior written agreement of each shareholder of m•FSI.

     C. m•FSI has entered into a business transfer and share transfer agreement
with Nisso Engineering K.K. (“NSE”) dated June 1, 2003 (the “NSE Acquisition
Agreement”), pursuant to which m•FSI has acquired all right, title and interest
in a portion of the business of the Semiconductor Manufacturing Device Division
of NSE’s IC Operation Department; all of the issued and outstanding common stock
of NSE’s subsidiary, NSE Tech K.K.; and certain intangible assets, all as
described and defined in the NSE Acquisition Agreement as the “Transferred
Assets.”

 

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     D. FSI has discontinued the business and operations of its microlithography
products division, but will continue to provide certain after-sale support for
installed microlithography products through FSI’s POLARIS Support Services.

     E. FSI, MBK and CEC previously consented to m•FSI’s entering into the NSE
Acquisition Agreement subject, however, to m•FSI granting certain exclusive
distribution rights and an exclusive license to FSI covering, among other
things, the NSE products and related technology.

     F. MBK desires to transfer all of its ownership interest in m•FSI to MBK
Holdings LLC (“MBK Holdings”), a wholly-owned subsidiary of MBK; but will
continue to be bound by the terms and conditions of the Shareholders Agreement
as if it remained a shareholder of m•FSI.

     G. FSI and CEC have consented to the transfer of MBK’s ownership interest
in m•FSI to MBK Holdings, subject to certain terms and conditions agreed upon
among FSI, CEC and MBK.

     H. FSI, MBK and CEC wish to amend the Shareholders Agreement to, among
other things, (i) expand the business scope of m•FSI, (ii) revise the scope of
the products and technology of FSI that are the subject of m•FSI by deleting any
and all references to FSI microlithography products so that the definition of
“Products” in the Shareholders Agreement includes only products, systems and
subsystems of FSI which are in the field of surface conditioning, cleaning, etch
and stripping technology and (iii) provide for the inclusion of MBK Holdings as
a party bound by the terms and provisions of the Shareholders Agreement.

     NOW, THEREFORE, in consideration of the mutual covenants below, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:

     1. Amendment to FSI Definitions. All references to “FSI Products,” “FSI
Patents” and “FSI Field” in the Shareholders Agreement are hereby amended to
exclude microlithography products, including, but not limited to, photoresist
processing products and technology so that from and after the date of this
Amendment, any and all such references shall only refer to surface conditioning,
cleaning, etch and stripping technology systems and subsystems of FSI and
related patents and technology of FSI. For the avoidance of doubt, any reference
to “FSI Products,” “FSI Patents,” or “FSI Field” in the Shareholders Agreement
shall not include any chemical delivery or management systems or products.

     2. Amendment to Article 12. Article 12 in the Shareholders Agreement is
hereby amended by deleting clause (d) in such article in its entirety and
replacing it with the following:

“(d) Approval of expenditure or other financial commitment exceeding
seventy-five million yen (¥75,000,000) other than ordinary operating
transaction;”

     3. Amendment to Article 13. Section 13.1 in the Shareholders Agreement is
hereby deleted in its entirety and replaced with the following:

 

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  “13.1   The business purpose of the Company is the following:     (a)   To
explore and develop the Japanese market for the FSI Products, the CEC Products
and the NSE Products. NSE Products means the products and related technology
relating to the “Transferred Assets” acquired by the Company under the terms and
conditions of that certain business transfer and share transfer agreement
between the Company and Nisso Engineering K.K. dated June 1, 2003.     (b)  
Subject to the terms, restrictions, consents and approvals set forth in this
Shareholder’s Agreement, to acquire companies, businesses, assets or products
and related technologies which are in the field of surface conditioning,
cleaning, etch and stripping technology and develop the same for sale and use in
such field in the Japanese market (such acquired products, together with the FSI
Products, the CEC Products and the NSE Products are hereinafter collectively
called the “Products”).     (c)   To improve, invent or develop products related
to the Products and related technology.     (d)   To assist the shareholders of
the Company in the exploration and development of the worldwide market outside
of Japan for the Products through the manufacture, sale and supply of the
Products to the shareholders or the grant to the shareholders of license or
distribution rights for the Products and related technology.     (e)   To supply
components related to the NSE Products to original equipment manufacturers
located anywhere in the worldwide market.     (f)   Subject to the terms,
restrictions, consents and approvals set forth in this Shareholders Agreement,
to provide contract manufacturing for products in the field of surface
conditioning, cleaning, etch and stripping technology to original equipment
manufacturers in the worldwide market, provided that such products are not
competitive with the Products.

          The business activities of the Company shall consist of any activity
consistent with the business purpose described above.”

     4. Amendment to Article 26. The first sentence of Article 26 of the
Shareholders Agreement is hereby deleted and replaced with the following:

“FSI, CEC and MBK’s Electric Machinery, Plant Project Business Unit shall not
engage, whether directly or indirectly, in a business that competes with the
business of the Company, and shall not enter into any agreement

 

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      or arrangement, whether directly or indirectly, for the design,
manufacture or sale of any product similar to or which would compete in the
Territory with the FSI Products, CEC Products, Company Products or NSE Products,
as the case may be, without the prior written consent of the other Parties.”

  5.   Amendment to Article 35. Article 35 in the Shareholders Agreement is
hereby amended by deleting the notice addresses for the parties in their
entirety and replacing them with the following:

      “(i) if to FSI:

         

  FSI INTERNATIONAL, INC.
 
       

  Address   3455 Lyman Boulevard
 
       

      Chaska, MN 55318-3052
 
       

  Facsimile No.:   1-952-448-1300
 
       

  Attention:   Benno Sand

      EVP, Business Development & Investor Relations

  (ii)   if to MBK:

     
MITSUI & CO., LTD.
 
   
Address:
  2-1, Ohtemachi 1-chome
 
   

  Chiyoda-ku, Tokyo, Japan 100-01
 
   
Facsimile No.:
  81-3-3285-9116
 
   
Attention:
  Yoshiaki Ikeda, General Manager,

  Investment Promotion Dept.,

  Power, Transportation and Plant Projects Business Unit

      with a copy to :

             
MBK HOLDINGS LLC
 
       

  Address:   2-1, Ohtemachi 1-chome
 
       

      Chiyoda-ku, Tokyo, Japan 100-01
 
       

  Facsimile No.:   81-3-3285-9135
 
       

  Attention:   Terutake Kato, President

  (iii)   if to CEC:

 

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  CHLORINE ENGINEERS CORP., LTD.
 
       

  Address:   Tomiokabashi Bldg.
 
       

      6-11, Fukagawa 2-chome
 
       

      Koto-ku, Tokyo 135-0033, JAPAN
 
       

  Facsimile No.:   81-3-5245-8130
 
       

  Attention:   Yoshinori Kato, President

     6. Effective Date. This Amendment is effective as of September 17, 2004.

     7. No Other Amendments. Except as amended above, every term and condition
of the Shareholders Agreement remains in full force and effect and is unaffected
by this Amendment. For the avoidance of doubt, any reference to MBK in the
Shareholders Agreement shall continue to refer to Mitsui & Co., Ltd. and Mitsui
& Co., Ltd. shall be bound by the terms of the Shareholders Agreement as if it
is still a shareholder of m•FSI.

     8. NSE Product Distribution Agreement. m•FSI and FSI shall, upon the
signing of this Amendment, enter into an exclusive distribution agreement
substantially in the form of Exhibit A, whereby m•FSI will grant to FSI
exclusive rights to distribute certain products outside of Japan.

     9. NSE Product License Agreement. m•FSI and FSI shall, upon the signing of
this Amendment, enter into an exclusive licensing agreement substantially in the
form of Exhibit B, whereby m•FSI will grant to FSI an exclusive license covering
the patents and related technology with regard to certain products for use
outside of Japan.

     10. Counterparts. This Amendment may be executed in two or more
counterparts, each of which when so executed and delivered shall be deemed an
original, and all of which counterparts when taken together shall constitute one
and the same instrument.

     11. Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of Japan, without giving effect to the conflicts of
laws provisions thereof.

     12. Governing Language. This Amendment is in the English language only,
which language is governing in all respects, and any translation of this
Amendment is for convenience only and is not binding upon the parties hereto.

 

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     IN WITNESS WHEREOF, the parties have caused this Amendment to be executed
by duly authorized representatives as of the date first above written.

         

  FSI INTERNATIONAL, INC.
 
       

  Name:   /s/ Don S. Mitchell

     

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  Title:   President & CEO
 
       

  MITSUI & CO., LTD.
 
       

  Name:   /s/ M. Matsuda

     

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  Title:   COO, Power, Transportation &

      Plant projects Business Unit
 
       

  CHLORINE ENGINEERS CORP., LTD.
 
       

  Name:   /s/ Y. Kato

     

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  Title:   President

     The undersigned, MBK Project Holdings Ltd. (“MPH”), hereby agrees that at
all times from and after MBK Holdings receives an ownership interest in m•FSI
Ltd., MBH shall be bound by and entitled to the benefits of all provisions in
the Shareholders Agreement dated June 5, 1991 among FSI International Inc.,
Mitsui & Co., Ltd. and Chlorine Engineers Corp. Ltd., as amended, as such
provisions apply to Mitsui & Co. Ltd., as if MBK Holdings were an original party
to the Shareholders Agreement.

         

  MBK HOLDINGS LLC
 
       

  Name:   /s/ T. Kato

     

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  Title:   President

 

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EXHIBIT A

m•FSI EXCLUSIVE DISTRIBUTORSHIP AGREEMENT

BETWEEN

m•FSI LTD.

AND

FSI INTERNATIONAL, INC.

 

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TABLE OF CONTENTS

     
Article 1.
  EXCLUSIVE DISTRIBUTORSHIP
Article 2.
  SALE AND PURCHASE
Article 3.
  PRICES, PAYMENT TERMS AND DELIVERY TERMS, ETC.
Article 4.
  SUB-AGENT
Article 5.
  DISTRIBUTOR’S COVENANTS
Article 6.
  m•FSI’s COVENANTS
Article 7.
  WARRANTY
Article 8.
  PATENTS, TRADEMARKS, ETC.
Article 9.
  TAXES, DUTIES AND CHARGES
Article 10.
  CONFIDENTIALITY
Article 11.
  FORCE MAJEURE
Article 12.
  TERM AND TERMINATION
Article 13.
  NO-ASSIGNMENT
Article 14.
  NOTICE
Article 15.
  MISCELLANEOUS
Article 16.
  ARBITRATION
Article 17.
  GOVERNING LAW
Article 18.
  ENTIRE AGREEMENT AND AMENDMENTS
Appendix I
  m•FSI’S PRODUCTS LIST
Appendix II
  TERRITORY

 

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m•FSI EXCLUSIVE DISTRIBUTORSHIP AGREEMENT

THIS AGREEMENT made and entered into this 17th day of September, 2004 by and
between:

(1)   m•FSI LTD., a company organized and existing under the laws of Japan,
having its principal office at Harmony Tower, 22nd Floor, 32-2 Honcho 1-chome,
Nakano-ku Tokyo 164-0012, Japan (hereinafter called “m•FSI”); and   (2)   FSI
INTERNATIONAL, INC., a company organized and existing under the laws of the
State of Minnesota, U.S.A., having its principal office at 3455 Lyman Boulevard,
Chaska, MN 55318-3052, U.S.A. (hereinafter called “Distributor”).

WITNESSETH:

WHEREAS:

(A)   m•FSI was incorporated to, among other things, manufacture and distribute
certain products and systems of FSI in Japan in accordance with a Shareholders
Agreement dated June 5, 1991, among FSI, Mitsui & Co., Ltd. (“MBK”) and Chlorine
Engineers Corp., Ltd. (“CEC”) (such agreement, as amended, is hereinafter called
the “Shareholders Agreement”);   (B)   the Shareholders Agreement states that
one of the business purposes of m•FSI is to explore and develop the Japanese
market for certain products and systems of FSI and CEC;   (C)   m•FSI has
entered into a business transfer and share transfer agreement with Nisso
Engineering Co., Ltd. (“NSE”) dated June 1, 2003 (the “NSE Acquisition
Agreement”) pursuant to which m•FSI has acquired all right, title and interest
in a

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    portion of the semiconductor manufacturing equipment business of NSE’s IC
Department; all of the issued and outstanding common stock of NSE’s subsidiary,
NSE Tech K.K.; and certain intangible assets, all as described in the NSE
Acquisition Agreement;   (D)   Distributor, MBK and CEC have entered into an
amendment to the Shareholders Agreement dated 9/17/04, 2004, to, among other
things, enable m•FSI to acquire the NSE assets and related technology;   (E)  
m•FSI and Distributor entered into a licensing agreement of even date herewith,
for m•FSI’s granting to Distributor an exclusive license with regard to certain
patents and other technology related to the NSE products (the “m•FSI Licensing
Agreement”); and   (F)   Distributor desires to be appointed as an exclusive
distributor in the Territory (as defined below) of the said NSE products and
systems and other future acquired or developed products and systems, and m•FSI
accepts such appointment in accordance with the terms and conditions set forth
herein.

NOW, THEREFORE, in consideration of the undertakings and covenants herein
contained, the parties hereto agree as follows:

Article 1. EXCLUSIVE DISTRIBUTORSHIP

1.1   m•FSI appoints Distributor as its exclusive distributor for the
distribution of the Products (as defined below) in the Territory (as defined
below), and Distributor accepts such appointment in accordance with the terms
and conditions set forth

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  below. For the avoidance of doubt, Distributor has the right to sell the
Products to any subsidiary or affiliate of any Japanese customer of m•FSI if
that subsidiary or affiliate is located within the Territory.

  The Products :   Any and all now existing or hereafter arising products and
systems and all spare parts and consumables relating thereto concerning surface
conditioning, cleaning, etch and stripping technology designed, developed,
invented or acquired by m•FSI including, but not limited to, the products listed
in Appendix I attached to this Agreement. Products do not include components
related to the Products which are intended for sale to original equipment
manufacturers.     The Territory :   The countries listed in Appendix II to this
Agreement.

1.2   m•FSI shall not, during the term of this Agreement, sell or export the
Products to any other person than Distributor within the Territory, and shall
not knowingly cause any other person than Distributor to sell or export the
Products to any person within the Territory, and shall not without prior written
consent of Distributor appoint any agent or other distributor for the sale of
the Products within the Territory; provided, however, m•FSI reserves the right
to sell or export components related to any NSE products and technology acquired
under the NSE Acquisition Agreement to any other person than Distributor within
the Territory provided that such components are for sale only to original
equipment manufacturers.

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1.3   Distributor shall not, during the term of this Agreement sell, distribute
or lease any products of a third party which are competitive with the Products
within the Territory.   1.4   m•FSI acknowledges and agrees that the obligations
of Distributor under this Agreement may be performed by any subsidiary or
affiliate of Distributor subject to the prior written consent of m•FSI.   1.5  
Notwithstanding the above Article 1.1 and 1.2, m•FSI reserves a right to appoint
any local agent in any country in which Products will be distributed, in case
that Distributor acknowledges and agrees that such local agent will be useful
for both parties.

Article 2. SALE AND PURCHASE

2.1   Subject to the terms hereof, Distributor shall purchase the Products, from
m•FSI, and m•FSI shall sell the Products, to Distributor for resale. Each such
purchase contract in such form as shall be agreed between m•FSI and Distributor
shall be made subject to all the terms and conditions hereof. For the avoidance
of doubt, in the event of any conflict or inconsistency between any purchase
contract, including any purchase orders, invoices or acknowledgment forms used
by the parties, and this Agreement, the terms of this Agreement shall govern.  
2.2   The customers of Distributor who have purchased the Products from
Distributor in the Territory shall have the right to use m•FSI’s process patent
applicable thereto.

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Article 3. PRICES PAYMENT TERMS AND DELIVERY TERMS, ETC.

3.1   The prices (the “Prices”) of the Products applicable to the sale and
purchase hereunder shall separately be agreed between the parties hereto. m•FSI
may revise the Prices from time to time by giving a written notice ninety
(90) days prior to the effective date of such revision, provided that the new
Prices shall not apply to the Products a quotation for which shall already have
been sent by Distributor to its customers when Distributor receives the m•FSI’s
above notice for changing the Prices.   3.2   The payment terms and delivery
terms for the Products to be purchased by Distributor from m•FSI shall be fixed
for specific periods of time by separate mutual agreement between the parties
hereto.

Article 4. SUB-AGENT

Distributor may, with m•FSI’s prior approval, at its risk and account, appoint
its subdistributor(s) of the Products in the Territory.

Article 5. DISTRIBUTOR’S COVENANTS

5.1   Distributor will use its best efforts to maximize the sales of the
Products in the Territory to their full market potential by advertising and
promoting the Products, filling orders promptly, and providing prompt and
competent product services.   5.2   Distributor shall at its expense:

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  (a)   maintain an adequate number of trained personnel to meet the service
requirements of its customers in the Territory;     (b)   furnish to m•FSI, on a
quarterly basis or at such times as m•FSI may reasonably request, complete
information relating to inventories of spare parts for the Products and
promotional, sales and service activities with respect to the Products,
including information on competitive Products which may come to Distributor’s
attention during the term of this Agreement; and     (c)   keep accurate
accounts of transactions including acceptance dates by customers for Products
sold by Distributor covered by this Agreement, which may be examined at
reasonable times by m•FSI or its agents.

5.3   Without limiting the generality of the foregoing sections of this Article
5, Distributor shall provide and be responsible for all after-sale service
requirements of any purchaser of the Products in the Asia-Pacific region of the
Territory starting from the Effective Date (as defined below) of this Agreement.

Article 6. m•FSI’S COVENANTS

6.1   m•FSI hereby agrees to use its best efforts to promptly fill and deliver
to Distributor, orders placed by Distributor hereunder, and to provide
Distributor with adequate supplies of Products literature in the English
language to the reasonable extent. Any costs and expenses to be incurred for the
translation, etc. shall be borne by Distributor.

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6.2   m•FSI will host visits, at facilities in Tokyo and Okayama, Japan, of
customers and potential customers from the Territory, under circumstances where
they are at other destinations in the region for other purposes.   6.3   At the
request and choice of Distributor m•FSI will, at its expense, dispatch and
station one (1) Products specialist in Chaska, Minnesota, for up to one
(1) month after the date of this Agreement for initial Products training. After
the initial Product training has been completed, then m•FSI will, at its
expense, provide up to two (2) weeks per year of Product specialist support in
Chaska, Minnesota. Distributor will pay m•FSI 140,000 Yen per day, plus all
travel, lodging and food expenses for Products specialist support required by
Distributor in excess of two (2) weeks per year. Such specialists will be
available during such visits for purposes of training and assisting
Distributor’s sales and service personnel in connection with the distribution,
installation, and servicing of the Products in the Territory. At the request and
choice of Distributor m•FSI will dispatch, at its expense, its process service
personnel for Distributor support purposes on at least two (2) occasions during
the first full year of this Agreement. Moreover, at the request and choice of
Distributor m•FSI will, at its expense, dispatch an adequate number of engineers
to Distributor for the purpose of reasonable technical services, reasonable
sales promotion assistance for introduction of new Products, including
extraordinary trouble shooting and maintenance.   6.4   m•FSI will allocate
adequate personnel time and facilities to the training of Distributor’s sales
and service personnel in Tokyo or Okayama, Japan for at least

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    two (2) training visits by Distributor’s key sales and service personnel
during the first full year of this Agreement; provided, however, that
Distributor shall be responsible for the round trip travel, food and lodging
expenses of any of its sales and service personnel sent to m•FSI for this
purpose.   6.5   If the modification of a Product is requested by Distributor or
its customers, m•FSI will render such services or assistances as may be
necessary for Distributor in connection with such modification. If m•FSI
considers such modification will affect the basic specification and cause the
invalidity of m•FSI’s warranty of the Products, m•FSI shall immediately inform
Distributor of such effect in writing.

Article 7. WARRANTY

7.1   m•FSI warrants the Products (excluding spares) sold by m•FSI to
Distributor hereunder conform to Distributor’s written specifications therefor
and to be free from defects in material and workmanship for fifteen (15) months
from the date of shipment from m•FSI. m•FSI’s obligation under this warranty is
limited to supplying and replacing parts demonstrated defective within the
warranty period, but shall not cover any labor required to replace such parts.
If shipment or customer acceptance is delayed due to an m•FSI quality problem,
hardware problem, software problem, process problem, etc. and provided that a
Request For Assistance is submitted to m•FSI Technical Support Department and
m•FSI escalation procedures are followed, Distributor may request the warranty
period be extended by the amount of time equal to the delay. If m•FSI Technical
Support

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    does not agree to extend the warranty period, Distributor may escalate the
request to m•FSI senior management. Such extended warranty period shall be
agreed upon by m•FSI and Distributor in good faith. An additional twelve
(12) months of parts warranty may be purchased for three percent (3%) of the
system price of the Product if purchased with the order for the Product. The
above warranties do not apply to spares, tool kits, consumables or other items.
  7.2   m•FSI warrants that spares sold by m•FSI to Distributor conform to
Distributor’s written specifications therefor and will be free from defects in
material and workmanship for twelve (12) months from the date of shipment from
m•FSI, provided, however, if any critical or fatal damage made by m•FSI would be
unexpectedly found the extension of such warranty period shall be discussed in
good faith between m•FSI and Distributor. m•FSI’s obligation under this warranty
for spares is limited to supplying and replacing parts demonstrated defective
within the warranty period, but shall not cover any labor required to replace
such parts. All consumable items shall be excluded from this warranty. m•FSI
will not be liable for consequential damages.   7.3   This warranty stipulated
hereabove shall not apply to any equipment which was altered without m•FSI’s
approval or subjected to misuse, negligence or accident; or used other than in
accordance with m•FSI’s printed instructions. When making warranty claims,
Distributor must provide to m•FSI the machine type and serial number.

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7.4   There are no warranties expressed, implied or statutory, of
merchantability, fitness, capacity or otherwise, of the goods ordered other
than, or different from the above warranty.   7.5   Distributor shall not
obligate m•FSI to any warranty of the Products other than m•FSI’s warranty set
forth above, nor to assume for m•FSI any obligations in connection with the sale
of the Products without the prior written consent of m•FSI.

Article 8. PATENTS, TRADEMARKS, ETC.

m•FSI shall indemnify and hold Distributor harmless against any liability with
regard to any infringement of patents, trade marks, designs, patterns and/or
other intellectual property rights in connection with the Products in the
Territory. Distributor agrees to promptly notify m•FSI of any such claim of
infringement as soon as it becomes to known to Distributor and shall cooperate
with m•FSI in defending against such claims.

Article 9. TAXES, DUTIES AND CHARGES

m•FSI shall bear and pay any tax, withholding tax, duty or any other charge
imposed or charged in any country in connection with the exportation of the
Products by m•FSI and it is agreed that any import duty to be imposed on the
Products in the Territory shall be borne and paid by Distributor.

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Article 10. CONFIDENTIALITY

During the term of this Agreement and for five (5) years after termination
thereof, each party agrees to keep, and to use its best efforts to cause its
affiliates, employees, agents and representatives (hereinafter collectively
called the “Related Persons”) to keep, strictly confidential and not to use or
disclose or permit any of its Related Persons to use or disclose to any other
person or entity any information or data which (a) pertains to this Agreement,
any negotiations relating hereto, any of the transactions contemplated hereby or
the business of any other party or its affiliates, or (b) any party has
delivered to the other party provided, however, that nothing in this Article 10
shall apply to any information or data (i) which the party in question can show
is now known to the public or which hereafter becomes known to the public other
than by its acts or omissions; or (ii) which it can show was already in its
possession and free from any obligation of confidentiality prior to receipt from
such other party. Each party shall be permitted to disclose the information
hereunder to the extent that it is required to disclose by securities,
accounting or other laws or regulations.

Article 11. FORCE MAJEURE

No failure or delay by the parties hereto in the performance of any obligation
herein contained shall be deemed as a breach of this Agreement nor create any
liability if the same arises from any cause or causes beyond the control of the
parties hereto, including, but not limited to, acts or omissions of any
government, compliance with laws,

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regulations, orders or requests of any government, fire, storm, flood or
earthquake, war, rebellion, revolution, riot, financial crisis, strikes or
lockouts.

Article 12. TERM AND TERMINATION

12.1   Unless terminated earlier as provided herein, this Agreement shall be in
force and effect on September 17th, 2004 (the “Effective Date”) and shall remain
effective for a two year period expiring on the second anniversary of the
Effective Date (“Initial Term”). This Agreement shall automatically renew for
successive terms of two (2) years each unless either party notifies the other
party in writing of its decision not to renew the Agreement no later than twelve
(12) months prior to the end of the Initial Term or the then current renewal
term. If a party notifies the other party of its decision not to renew in
accordance with this section, the Agreement shall automatically terminate at the
end of the then current term.   12.2   This Agreement may be terminated at any
time by giving a written notice in the event that proceedings in bankruptcy or
insolvency are instituted by or against any of the parties hereto, or in case of
liquidation or dissolution of the other party or in the event that the other
party shall breach any of its obligations under this Agreement and shall fail to
correct such breach within forty five (45) days after written notice of such
breach, without prejudice to any rights which the terminating party may have and
which have arisen prior to such termination.

12

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Article 13. NO-ASSIGNMENT

Neither this Agreement nor any rights or obligations hereunder shall be assigned
by either party without prior written approval of the other party, and any
assignment or transfer without such consent shall be null and void.

Article 14. NOTICE

Any notice or request given hereunder shall be in writing in the English
language and personally delivered or mailed by courier or sent by facsimile to
the following addresses, which shall be followed by a confirming letter mailed
within seven (7) days.

         

if to Distributor:   FSI INTERNATIONAL, INC.

  Address:   3455 Lyman Boulevard

      Chaska, Minnesota 55318-3052 USA

  Facsimile No.:   1-612-448-1300

  Attention:   Benno Sand
 
       

if to m•FSI:   m•FSI LTD.

  Address:   Harmony Tower, 22nd Floor

      32-2 Honcho l-chome,

      Nakano-ku Tokyo 164-0012, Japan

  Facsimile No.:   81-3-5309-8401

  Attention:   Hideki Kawai

or to such other address as any of the parties may specify from time to time in
writing to the others in accordance herewith.

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Article 15. MISCELLANEOUS

15.1   This Agreement is in the English language only, which language shall be
governing in all respects, and any translation thereof shall be for convenience
only and shall not be binding upon the parties hereto.   15.2   The headings of
Articles hereof are for convenience of reference only, and shall not in any way
affect the interpretation hereof.   15.3   In view of the possibility that one
or more of the provisions of this Agreement may subsequently be declared invalid
or unenforceable by court of law, or administrative decision, the parties hereto
agree that invalidity or enforceability of any of the provisions shall not in
any way affect the validity or enforceability of any other provisions of this
Agreement.   15.4   The failure of either party hereto at any time to require
performance by the other party of any provision hereof shall in no way affect
the right to require full performance at any time thereafter, nor shall the
waiver by either party hereto of a breach of any provision hereof be taken or
held to be a waiver of any succeeding breach of such provision or as a waiver of
the provision itself.

Article 16. ARBITRATION

Any disputes, controversy or difference which may arise out of or in connection
with or in relation to this Agreement, or for the breach thereof, shall, unless
settled by amicable arrangements of the parties hereto without undue delay, be
settled by arbitration in Tokyo, Japan in accordance with the Rules of Procedure
of the Japan Commercial

14

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Arbitration Association if m•FSI is claimed to be in default of this Agreement,
or otherwise a respondent, or in Minneapolis, U.S.A. in accordance with the
Commercial Arbitration Rules of the American Arbitration Association if
Distributor is claimed to be in default of this Agreement, or otherwise a
respondent. The award thereof shall be final and binding upon the parties
hereto, and judgement on such award may be entered in any court or tribunal
having jurisdiction thereof.

Article 17. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of
the state of Minnesota, U.S.A. without giving effect to its conflicts of law
provisions.

Article 18. ENTIRE AGREEMENT AND AMENDMENTS

This Agreement contains and constitutes the entire agreement and understanding
between the parties hereto respecting the subject matter hereof and supersedes
and cancels all previous discussions, commitments, agreements and understandings
of any nature between them, and any change or modification of this Agreement
shall not be binding upon the parties hereto unless it is made by an instrument
in writing of subsequent date signed by a duly authorized officer or
representative of each of the parties hereto.

[Remainder of page intentionally left blank.]

15

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in duplicate by their duly authorized officers or representatives as of the day
and year first above written, each duplicate to be considered an original and
one duplicate to be retained by each party.

     
For and on behalf of
   
m•FSI LTD.
   
 
   
/s/ Hideki Kawai
   

--------------------------------------------------------------------------------

   
Hideki Kawai
   
President
   
 
   
For and on behalf of
   
FSI INTERNATIONAL, INC.
   
 
   
/s/ Benno Sand
   

--------------------------------------------------------------------------------

   
Benno Sand
   
EVP, Business Development & Investor Relations
   

16

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APPENDIX I

m•FSI PRODUCT LIST

      Product Name

--------------------------------------------------------------------------------

  Description

--------------------------------------------------------------------------------

Spin Processor CENOTE
  Single Wafer Wet Station
 
   
Best
  Wafer Backside Etcher
 
   
Wet Station
  Immersion Process System
 
   
Ancillary Products
  Such as Deionized Water Heaters, Booster Pumps, Chemical Heaters, etc., or
other Ancillary Systems or Hardware which Allow the Products to Function as
Systems

 

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APPENDIX II

TERRITORY

Effective the date of this Agreement, the Territory consists of the following
countries/markets (including all related territories and possessions of each
country):

  •   All countries in the continent of Europe, including, but not limited to,
all current and future member states of the European Union.     •   the United
States of America, Canada and Mexico.     •   All countries in Central and
Eastern Asia (except for Japan) and all countries in Southeast Asia, including,
but not limited to, Taiwan, the Peoples’ Republic of China and South Korea and
all current and future member states of the Association of Southeast Asian
Nations (ASEAN).

 

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EXHIBIT B

m•FSI LICENSING AGREEMENT

BETWEEN

m•FSI LTD.

AND

FSI INTERNATIONAL, INC.

19

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TABLE OF CONTENTS

     
Article 1.
  DEFINITIONS
Article 2.
  GRANT OF LICENSE
Article 3.
  TECHNICAL SUPPORT
Article 4.
  TRADEMARK
Article 5.
  IMPROVEMENTS AND INVENTIONS
Article 6.
  ROYALTY
Article 7.
  PAYMENTS
Article 8.
  RECORDS AND REPORTS
Article 9.
  REPRESENTATION AND COVENANT
Article 10.
  CONFIDENTIALITY
Article 11.
  INFRINGEMENT
Article 12.
  WARRANTY
Article 13.
  FORCE MAJEURE
Article 14.
  INCONTESTABILITY
Article 15.
  TERM AND TERMINATION
Article 16.
  ARBITRATION
Article 17.
  GOVERNING LAW
Article 18.
  ENTIRE AGREEMENT AND AMENDMENTS
Article 19.
  NO-ASSIGNMENT
Article 20.
  NOTICE
Article 21.
  LANGUAGE, HEADINGS, ENFORCEABILITY, NO-WAIVER
APPENDIX
  I.    m•FSI’s PATENT AND TRADEMARK LIST
 
  II.   m•FSI’s PRODUCT LIST
 
  III. TERRITORY
 
  IV. TECHNICAL INFORMATION
 
  V.   REMARKABLE IMPROVEMENTS

 

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m•FSI LICENSING AGREEMENT

THIS AGREEMENT made and entered into this 17th day of September, 2004, by and
between:

(1)   m•FSI LTD, a company organized and existing under the laws of Japan,
having its principal office at Harmony Tower, 22nd Floor, 32-2 Honcho 1-chome,
Nakano-ku Tokyo 164-0012, Japan (hereinafter called “Licensor”), and   (2)   FSI
INTERNATIONAL, INC., a company organized and existing under the laws of the
State of Minnesota, U.S.A., having its principal office at 3455 Lyman Boulevard,
Chaska, MN 55318-3052 (hereinafter called “Licensee”).

WITNESSETH:

WHEREAS;

(A)   Licensor was incorporated to, among other things, manufacture and
distribute certain products and systems of Licensee in Japan in accordance with
a Shareholders Agreement dated June 5, 1991, among Licensee, Mitsui & Co., Ltd.
(“MBK”) and Chlorine Engineers Corp., Ltd. (“CEC”) (such agreement, as amended,
is hereinafter called the “Shareholders Agreement”);   (B)   the Shareholders
Agreement states that one of the business purposes of Licensor is to explore and
develop the Japanese market for certain products and systems of Licensee and
CEC;   (C)   Licensor has entered into a business transfer and share transfer
agreement with Nisso Engineering Co., Ltd. (“NSE”) dated June 1, 2003 (the “NSE
Acquisition Agreement”) pursuant to which Licensor has acquired all right, title
and interest in a

 

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    portion of the business of the semiconductor manufacturing equipment
business of NSE’s IC Department; all of the issued and outstanding common stock
of NSE’s subsidiary, NSE Tech K.K.; and certain intangible assets, all as
described in the NSE Acquisition Agreement;   (D)   Licensor and Licensee
entered into a distribution agreement of even date herewith, pursuant to which
Licensor has granted to Licensee the right to distribute such products; and  
(E)   Licensee desires to be granted, and Licensor is willing to grant, an
exclusive license to manufacture, use, offer for sale, sell, import and lease
(or to have others do so for Licensee) the Products (as defined below) in the
Territory (as defined below) utilizing the patents, patent applications and
technical information relating to the Transferred Assets (as defined below) and
to supply Licensee with all of the said technical information.

NOW, THEREFORE, in consideration of the mutual covenants and undertakings herein
contained, the parties hereto agree as follows:

Article 1. DEFINITIONS

As used in this Agreement, the following terms shall have the following meanings
respectively.

    “Effective Date” means the day on which this Agreement shall become
effective in accordance with the provisions of Article 15.1 hereof.

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    “FSI Licensing Agreement” means the license agreement between FSI
International, Inc., as licensor, and m.FSI Ltd., as licensee, dated August 14,
1991, as such agreement may be amended from time to time.       “Intellectual
Property Rights” means all intellectual property rights (including trademark
rights in the Trademarks) in respect of the Transferred Assets and all assets or
technology Licensor may develop or acquire in the future other than Patents and
the Technical Information such as design and copyrights now owned or controlled
or to be owned or controlled in the future by Licensor.       “Joint
Invention(s)” means an improvement or invention made by at least one employee of
Licensor and one employee of Licensee relating to the Field (as defined below)
provided, however, that any and all improvement or invention covered by the FSI
Licensing Agreement are excluded from the Joint Invention defined in this
Agreement.       “Net Selling Price” means the gross selling price of the
Products, and such value of the attachments separately and explicitly added to
the Products as shall be agreed between the parties hereto, billed by Licensee
less the following items, to the extent included thereinto:

  (i)   sales, excise and consumption taxes

3

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  (ii)   custom duties;     (iii)   charges for packaging, transportation and
warehouse and insurance premium;     (iv)   interest for deferred payment and
finance commission;     (v)   agent’s commission (if any); and     (vi)  
amounts payable to Licensee for installation or assembly in connection with the
Products.

    “Patents” means any and all patents and patent applications which are listed
in Appendix I attached hereto, and continuations, continuations in part and
divisionals and any foreign equivalents thereof and patents and patent
applications covering the Products or any other products developed, designed or
invented or acquired by Licensor in the future relating to the Field (as defined
below) to be owned, applied or controlled by Licensor in the future during the
term of this Agreement, and continuations, continuations in part and divisionals
and any foreign equivalents thereof, provided, however, that the following
patents are excluded from the Patents defined in this Agreement:

  (a)   any and all patents relating to the improvement or any inventions
covered by the FSI Licensing Agreement; and     (b)   any and all patents
relating to improvement or inventions jointly developed with any third party, in
case that either Licensor or

4

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      Licensee is restricted or prohibited from disclosing the same under any
agreement with such third party.

    Without limiting the generality of the foregoing, the term “Patents” for
purposes of this Agreement includes any co-owned patents and patent applications
which the Licensor may acquire as contemplated by the NSE Acquisition Agreement.
      “Products” means any and all products, systems and subsystems now or
hereafter produced by or under control of Licensee based upon the Technical
Information given under this Agreement which are in the field of surface
conditioning, cleaning, etch and stripping technology (hereinafter called the
“Field”) such as the Technical Information used in the products listed in
Appendix II attached to this Agreement and any products, systems and subsystems
to be used in the Field which will be developed, designed or invented, or
otherwise acquired by Licensor in the future during the term of this Agreement.
The parties agree that the definition of Products includes subsystems related to
the products (e.g. the Nison Vesper sybmodule) only to the extent such
subsystems are incorporated in Products sold by Licensee to end-users of the
Products and not to original equipment manufacturers.       “Shareholders
Agreement” means the shareholders agreement with the date of June 5th, 1991, as
amended, among Licensee, MBK and CEC.

5

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    “Technical Information” means any and all technical knowledge, know-how,
data and information developed or otherwise acquired by Licensor concerning the
Transferred Assets or any other products developed, designed or invented or
acquired by Licensor in the future relating to the Field except for information
acquired from others where the Licensor’s right to disclose or sublicense the
information is restricted. It is understood that the Technical Information shall
specifically (i) include all the technical knowledge, know-how, data and
information concerning the Transferred Assets which will be developed or
otherwise acquired by Licensor in the future during the term of this Agreement
and (ii) exclude all the technical knowledge, know-how, data and information of
the Licensor which is subject to the FSI License Agreement. It is further
understood that Licensor shall use its best efforts in agreements with any third
parties to allow the transfer to Licensee of the rights and/or information of
the Patents, Technical Information or Intellectual Property Rights.      
“Territory” means the countries listed in Appendix III.       “Trademarks” means
the trademarks and service marks listed in Appendix I to this Agreement, and any
other trademarks and service marks relating to the Transferred Assets or any
other products which in either case are developed or otherwise acquired by
Licensor in the future during the term of this Agreement.

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    “Transferred Assets” means “Transferred Assets” as defined in the NSE
Acquisition Agreement.

Article 2. GRANT OF LICENSE

2.1   Licensor hereby grants to Licensee the exclusive license under the
Patents, Technical Information and Intellectual Property Rights to manufacture,
use, offer for sale, sell, import and/or lease the Products in the Territory;
provided, however, Licensee agrees not to manufacture any of the three Products
listed in Appendix II to this Agreement (i.e. Spin Processor CENOTE, Best and
Wet Station) at any time on or prior to June 30, 2006; provided further,
however, that Licensee may start on the Effective Date to manufacture, use,
offer for sale, sell, import and/or lease in the Territory all subsystems
related to any Products, including, but not limited to, the Nison Vesper
submodule. For the avoidance of doubt, Licensor acknowledges and agrees that the
license granted to Licensee under this Agreement includes the right of the
Licensee to sublicense to any purchaser of the Products the right to use (but
not manufacture) the Patents, Technical Information and Intellectual Property
Rights.   2.2   Licensee may, subject to the prior approval of Licensor (which
approval will not be unreasonably withheld), grant to any third party a
sublicense of the Patents, Technical Information and the Intellectual Property
Rights, or any portion thereof, within the Territory.   2.3   Licensor hereby
agrees that Licensee may, at its sole and absolute discretion and expense,
effect registration(s) of the exclusive license granted hereunder with respect
to each of the Patents and the Intellectual Property Rights in the Territory.

7

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    For this purpose, Licensor authorizes Licensee to take, solely in its name,
any and all procedures necessary for above registration(s), and agrees to
execute and deliver, upon Licensee’s request, any and all documents, including
powers of attorney, necessary therefor. Licensee agrees to take all necessary
actions to promptly deregister its above registration upon termination of this
Agreement. Subject to Licensee’s right to a continued exclusive license as
provided in Article 15, Licensee agrees not to enforce its exclusive rights
during the period following termination of this Agreement and prior to such
deregistration. In the event of a termination of this Agreement for a reason
whereby Licensee is to receive a license as provided in Article 15 hereof,
Licensor hereby agrees that Licensee may, at its sole and absolute discretion
and expense, effect registration of a license under applicable law in the
Territory.   2.4   The exclusive license granted hereunder shall include a
license to reproduce, modify, translate, distribute and/or use existing
promotional material, sales literature and any documents relating to the
Transferred Assets used by Licensor. Licensee will also be allowed to produce
such material with review of Licensor, for which approval will not be
unreasonably withheld. If Licensee has not received notice from Licensor that
the Licensor has approved material proposed by Licensee within 10 business days
of sending the material to the Licensor, then the Licensor shall be deemed to
have rejected the material.

8

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Article 3. TECHNICAL SUPPORT

3.1   Licensor shall furnish Licensee with such materials and information
concerning the Patents, Intellectual Property Rights and Technical Information
in accordance with the guideline shown in Appendix IV. As to Technical
Information concerning the Products to be developed or invented by Licensor in
the future, Licensor shall provide Licensee with a disclosure thereof in writing
together with all details when such Technical Information shall have been
obtained and considered marketworthy by Licensor in the guideline shown in
Appendix IV. Any costs and expenses to make above materials for Licensee for the
purpose of this Agreement shall be borne by Licensee.   3.2   Licensor shall
free of charge arrange for and render a training program for the employees of
Licensee (up to 3,000 man hours) in order to render sufficient technical support
and services of the Products. Research and development collaboration will not
apply to the 3,000 hour limitation. The contents of the training program, number
of persons who are to be trained and period of training shall be agreed in
advance between the parties hereto from time to time. Traveling expenses and
living expenses for such trainees shall be borne by Licensee.   3.3   At the
request and choice of Licensee, (a) Licensor shall permit the employees of
Licensee to use the facilities of Licensor, and shall provide Licensee with
sufficient technical data and/or information concerning the Patents,
Intellectual Property and Technical Information in order to enable Licensee to
render sufficient technical support and services, or (b) Licensor shall at its
cost for such period as may be

9

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    agreed between the parties hereto, dispatch to Licensee qualified personnel
of Licensor to provide Licensee with sufficient technical support and services
in connection with the manufacture of the Products and/or research and
development of new products. Any costs and expenses reasonably incurred by
Licensor, including air fare from and to Japan and accommodations costs shall be
borne by Licensee. No absence fee for the above qualified personal will be paid
by Licensee.   3.4   At the request and choice of Licensee, Licensor shall
receive and arrange for and host the visit of customers and/or the prospective
customers from the Territory of Licensee to the facilities of Licensor, provided
that such visit shall not interfere with the work of Licensor, and provided
further that the cost and expense for the above visit to be borne by the parties
hereto shall separately be agreed from time to time in advance.

Article 4. TRADEMARK

    Licensee shall have the right to use its own trademark, which shall include
the m•FSI name as part thereof, for or in connection with the sale and/or lease
of the Products. The m•FSI name shall be removed from said trademark at the
request of Licensor upon termination of this Agreement for any reason
whatsoever. Licensee may, in accordance with the form and method of the use
designated by Licensor in advance, use the Trademarks for and in connection with
the sale and/or lease of the Products during the term of this Agreement.

10

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Article 5. IMPROVEMENTS AND INVENTIONS

5.1   If Licensor makes any improvement and/or invention which is considered
marketworthy by Licensor, whether patentable or not, with regard to the
Products, it shall promptly notify Licensee in writing thereof giving full
details of such improvements and/or inventions, so long as Licensor is not
restricted or prohibited from disclosing the same under any agreements with any
third party. All rights and interests in respect of the said improvements and/or
inventions shall belong to Licensor. Each such improvement or invention
developed during the term of this Agreement, any products manufactured by
Licensee thereunder and technical information thereof shall automatically be
included into the Products, Patents, Intellectual Property Rights and/or
Technical Information respectively and become an integral part thereof, and
Licensee shall automatically without any additional license fee have an
exclusive license thereof according to Article 2 hereof. Licensor shall notify
Licensee of all patent applications filed on any improvement or invention
related to a Product. If the Licensor has not filed a patent application in any
country in the Territory on any improvement or invention related to a Product or
patent application within the later of six months from the date of disclosure of
the invention or improvement to the Licensee or nine (9) months of the filing
date of the application in one or more countries, Licensee at its own expense,
but with the full cooperation of Licensor, may file a patent application within
the countries in the Territory, in which event Licensee shall own the patent
application and any resulting patents issuing therefrom, and Licensor shall
have, from and after

11

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    termination of this Agreement, a non-exclusive royalty free license for the
said patent application and any resulting patents issuing therefrom in such
country(ies). In any event, Licensor shall provide all reasonable assistance to
Licensee, at Licensee’s expense, if Licensee seeks to enforce the patent. Any
recovery from such enforcement action shall be solely for the account of
Licensee.   5.2   If Licensee makes any improvement and/or invention which is
considered marketworthy by Licensee with regard to or in connection with the
Products, or changes or variations of method for manufacturing the Products, it
shall promptly notify Licensor thereof in writing giving full details of such
improvement, so long as Licensee is not restricted or prohibited from disclosing
the same under any agreements with any third party. All rights and interests in
respect of the said improvement shall belong to Licensee, provided that, during
the term of this Agreement, Licensor shall have an exclusive, royalty-free
license for the said improvement in Japan. Notwithstanding the above, the rights
and interests in respect of any remarkable improvement developed by Licensee and
as specifically defined in Appendix V (hereinafter called the “Remarkable
Improvement”) shall belong to Licensee, and during the term of this Agreement
Licensor shall have a right to use the said technology on such terms and
conditions as stated in Article 6.3 hereof.   5.3   If the parties hereto make
any Joint Invention, the rights and interests in respect of such Joint Invention
shall be jointly owned by both parties hereto in proportion to the participation
of each party hereto in each such Joint Invention, and during the

12

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    term of this Agreement, Licensor shall have the exclusive right to use (with
no obligation to pay Licensee) the said Joint Invention in Japan and Licensee
shall have the exclusive right to use (with no obligation to pay Licensor) the
said Joint Invention within the Territory.

Article 6. ROYALTY

6.1   Licensee shall, as a license fee for Licensor’s granting exclusive license
hereunder, pay to Licensor the sum of one million United States dollars (U.S.
$1,000,000) (hereinafter called the “License Fee”).   6.2   In addition to the
License Fee, Licensee shall as a part of consideration for the exclusive license
hereunder pay Licensor as royalty five percent (5%) of the Net Selling Price of
the Products manufactured and sold or leased by Licensee or its sublicensees,
less value of parts supplied by Licensor or its sublicensees and nonlicensed
products purchased from other manufacturers (hereinafter called the “Royalty”),
provided, however, that Licensee’s obligation to pay the Royalty on any Product
shall terminate after five (5) years from the day when Licensor has ceased
development on any Product. Licensor and Licensee shall annually review the
development status of the Products.   6.3   Notwithstanding above Article 6.2:

  (a)   the five percent (5%) Royalty to be paid by Licensee to Licensor shall
be reduced by the Product content percentage (on a manufacturing cost basis) of
the Remarkable Improvement; and

13

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  (b)   Licensor will pay Licensee a royalty of five percent (5%) of the portion
(on a manufacturing cost basis) of the Net Sales Price of the Products
represented by the Remarkable Improvement for any Products manufactured by
Licensor with the Remarkable Improvement.

Article 7. PAYMENTS

7.1   Subject to Article 7.4 hereof, Licensee shall pay to Licensor the License
Fee under Article 6.1 hereof within ten (10) working days after the Effective
Date in consideration for the Licensor’s disclosure of the Technical Information
to the Licensee.   7.2   Subject to Article 7.4 hereof, Licensee shall pay to
Licensor the Royalty under Articles 6.2 and 6.3 hereof no later than three
(3) months from the end of every quarterly accounting period of Licensee in
accordance with the report to be provided pursuant to Article 8.2 hereof,
provided, however, that the Royalty may be withheld on any Products which are in
dispute as to infringement of a third party’s patents and/or trademark, and
provided, further, that such infringement does not arise in whole or in part as
a result of a modification or alteration originating from Licensee. For the
avoidance of doubt, Licensee shall not unreasonably withhold the payment of the
Royalty pursuant to the above if the portion of the Product under the
infringement dispute is an ancillary or minor part of the equipment or is
licensed by Licensor so that it is no longer infringing. If the dispute of the
such infringement is

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    resolved, Licensee shall within thirty (30) days pay to Licensor the Royalty
which Licensee withholds due to such dispute of the alleged patent infringement.
  7.3   All payments by Licensee hereunder shall be made to the bank account of
Licensor in U.S. dollars or, if requested by Licensor, in Japanese currency, by
Licensee as shall be designated by Licensor. The conversion from local currency
to the currency of payment shall be made at the T. T. Selling spot rate of
exchange quoted by an authorized foreign exchange bank in Minneapolis, MN,
U.S.A. on the previous business day of the date of each remittance.   7.4   Any
withholding tax lawfully levied by the relevant tax authorities on any amount
due to Licensor hereunder shall be borne by Licensor. When Licensee deducts for
paying any such tax, it shall without undue delay send to Licensor the official
certificate of such payment of tax.

Article 8. RECORDS AND REPORTS

8.1   Licensee shall keep full and accurate records showing the Products
manufactured and/or have manufactured, used, sold, imported and/or leased by
Licensee hereunder in reasonably sufficient detail to enable the amount of
Royalty to be determined. Licensee shall also permit the said records to be
examined from time to time during reasonable business hours to the extent
necessary to verify the amount of Royalty paid to Licensor, such examination to
be made by Licensor or an independent qualified accountant appointed by Licensor
at the expense of Licensor.

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8.2   Within forty five (45) days from the end of every quarterly accounting
period of Licensee, Licensee shall furnish Licensor with a written report
showing the Net Selling Price, the amount of earned Royalty and other data for
calculation thereof with respect to the Products and any products jointly
developed by Licensor and Licensee, which were manufactured by or were
manufactured for Licensee, used sold and/or leased by Licensee hereunder for
each such preceding quarterly accounting period. Licensee will furnish Licensor
with such additional reports in connection with the foregoing and particularly
with regard to the sales of the Products and the selling prices thereof which
Licensor may reasonably request.

Article 9. REPRESENTATION AND COVENANT

    Licensor represents to Licensee that Licensor is the true and sole owner of
the Patents, the Intellectual Property Rights, and the rights and interests
under the inventions based on the Technical Information, and confirms that
Licensor shall use its best efforts to verify the accuracy of the Technical
Information. Licensor further agrees to use its reasonable efforts to obtain all
approvals or consents necessary to enable any co-owned, intangible and/or fixed
assets which the Licensor has acquired under the NSE Acquisition Agreement to
become part of the Intellectual Property Rights, Patents or Technical
Information, as the case may be, which is licensed by Licensor to Licensee under
this Agreement. Without limiting the generality of the foregoing, Licensor shall
cause each of its subsidiaries to license to Licensee, on terms and conditions
equivalent to the terms and conditions set forth in

16

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    this Agreement, all trademarks, patents, technical information and other
intellectual property rights owned or controlled or acquired by each such
subsidiary which relate to the Field.

Article 10. CONFIDENTIALITY

    During the term of this Agreement and for five (5) years after termination
thereof, each party agrees to keep, and to use its best efforts to cause its
affiliates, employees, agents and representatives (hereinafter collectively
called the “Related Persons”) to keep strictly confidential and not to use or
disclose or permit any of its Related Persons to use or disclose to any other
person or entity any information or data which (a) pertains to this Agreement,
any negotiations relating hereto, any of the transactions contemplated hereby or
the business of the other party, any other party or its affiliates or (b) any
party has delivered to the other party provided, however, that nothing in this
Article 10 shall apply to any information or data (i) which the party in
question can show is now known to the public or which hereafter becomes known to
the public other than by its acts or omissions; or (ii) which it can show was
already in its possession and free from any obligation of confidentiality prior
to receipt from such other party. Each party shall be permitted to disclose the
information hereunder to the extent that it is required to disclose by
securities, accounting or other laws or regulations or by a court or government
agency of competent jurisdiction.

17

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Article 11. INFRINGEMENT

    Licensor shall indemnify and hold Licensee harmless against any liability
with regard to any infringement of patents, trade marks, designs, patterns
and/or other intellectual property rights in the Territory. Licensee agrees to
promptly notify Licensor of any such claim of infringement as soon as it becomes
known to Licensee and shall cooperate with Licensor in defending against such
claims.

Article 12. WARRANTY

    Licensor warrants to Licensee that the Patents, Intellectual Property Rights
and Technical Information will to the best of its knowledge and belief be the
same as the information that is known and used by Licensor in its manufacture of
the Products.

Article 13. FORCE MAJEURE

    No failure or delay by the parties hereto in the performance of any
obligation contained shall be deemed as a breach of this Agreement nor create
any liability if the same arises from any cause or causes beyond the control of
the parties hereto, including, but not limited to, acts or omissions of any
government, compliance with laws, regulations, orders or requests of any
government, fire, storm, flood or earthquake, war, rebellion, revolution, riot,
financial crisis, strikes or lockouts.

18

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Article 14. INCONTESTABILITY

    To the extent permissible under the laws and regulations applicable in the
Territory, each party recognizes the validity of the Patents/patents of the
other party and shall not contest, nor aid others in contesting, the validity
thereof.

Article 15. TERM AND TERMINATION

15.1   This Agreement shall become in force and effect on September 17, 2004
(the “Effective Date”) and is subject to all Japanese and U.S. governmental
approvals required in connection with the performance by Licensor and Licensee
of their respective obligations hereunder having been obtained and all requisite
governmental notifications having been made and applicable waiting periods
having elapsed, and shall, subject to Article 15.2 through Article 15.6 hereof,
remain effective until five (5) years following the termination of the
Shareholders Agreement shall have elapsed. Following this five-year period,
(i) Licensee shall, unless otherwise provided herein, then have a paid-up,
royalty-free, non-exclusive license to manufacture, use, offer for sale, sell,
import and/or lease (and/or to have one or more third parties do any or all of
these for the Licensee) the Products under the Patents, the Intellectual
Property Rights and/or Licensor’s Technical Information provided to Licensee
(including all improvements and inventions by Licensor related thereto) prior to
the termination of the Shareholders Agreement, (ii) Licensee shall then have the
non-exclusive right (with no obligation to pay Licensor) to manufacture, use,
offer for sale, sell, import and/or lease (and/or to have one or more third
parties

19

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    do any or all of those for the Licensee) the Products inside and outside the
Territory under any Joint Inventions to the Patents, the Intellectual Property
Rights and/or Licensor’s Technical Information provided to Licensee (including
all improvements and inventions by Licensor related thereto) prior to the
termination of the Shareholders Agreement and (iii) Licensor shall then have the
non-exclusive right (with no obligation to pay Licensee) to manufacture, use,
offer for sale, sell, import and/or lease (and/or to have one or more third
parties do any or all of these for the Licensor) the Products inside and outside
the Territory under any Joint Inventions to the Patents, the Intellectual
Property Rights and/or Licensor’s Technical Information provided to Licensee
(including all improvements and inventions by Licensee related thereto) prior to
the termination of the Shareholders Agreement.   15.2   In the event that:      
(a)   the Shareholders Agreement is terminated due to a reason attributable to
MBK or CEC or their permitted assignees in accordance with Article 28.1 (a) or
(b) of the Shareholders Agreement, or by Licensee, MBK or CEC or their permitted
assignees in accordance with Article 28.1 (c) of the Shareholders Agreement; and
      (b)   Licensee’s shares in Licensor are purchased pursuant to Article 29
of the Shareholders Agreement,       then Licensee shall have a right to:      
(i)   keep an existing exclusive license hereunder to manufacture, use, offer
for sale, sell, import and/or lease (and/or to have one or more third parties do
any

20

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        or all of these for Licensee) the Products using Licensor’s Patents, the
Intellectual Property Rights and Technical Information provided to Licensee
(including all improvements and inventions by Licensor related thereto) prior to
the termination of the Shareholders Agreement, for a period of five (5) years
following the termination of the Shareholders Agreement subject to payment of a
royalty of three percent (3%) of the Net Selling Price of the Products
manufactured by Licensee; and       (ii)   thereafter have a paid-up,
royalty-free, nonexclusive license to manufacture, sell, offer for sale, import,
lease and/or use (and/or to have one or more third parties do any or all of
these for Licensee) the Products using the Licensor’s Patents, the Intellectual
Property Rights and Technical Information provided to Licensee (including all
improvements and inventions by Licensor related thereto) prior to termination of
the Shareholder’s Agreement in the Territory.

15.3   In the event a Change of Control referred to in Article 28.2 (b) (y) of
the Shareholders Agreement shall have occurred at MBK or CEC or their permitted
assignees, and thereafter MBK’s or CEC’s or their permitted assignee’s shares in
Licensor are purchased by the other parties to the Shareholders Agreement
pursuant to Article 28.2 (b) (i) thereof and the Shareholders Agreement is
terminated pursuant to Article 28.1 (d) (x) thereof, Licensee shall have the
rights set forth in Article 15.2 (i) and (ii) above. In the context of this
Article and Article 15.4 below, a Change of Control shall have the same meaning
as used in the Shareholders Agreement.

21

--------------------------------------------------------------------------------

 

15.4   In the event a Change of Control referred to in Article 28.2 (b) (x) of
the Shareholders Agreement shall have occurred at MBK or CEC, or their permitted
assignees and thereafter MBK’s or CEC’s or their permitted assignee’s shares in
Licensor are purchased by the other parties to the Shareholders Agreement
pursuant to Article 28.2 (b) (i) thereof, and the Shareholders Agreement is
terminated pursuant to Article 28.1 (d) (x) thereof,

  (i)   Licensee shall have a right to keep an exclusive license hereunder to
manufacture, use, offer for sale, sell, import and/or lease (and/or to have one
or more third parties do any or all of these for Licensee) Products in the
Territory (and/or to have one or more third parties do any or all of these for
Licensee) using Licensor’s Patents, the Intellectual Property Rights and/or
Technical Information provided to Licensee (including all improvements and
inventions by Licensor related thereto) prior to the termination of the
Shareholders Agreement, for a period of two (2) years after the occurrence of
such Change of Control subject to the payment of a royalty of three percent (3%)
of the Net Selling Price of the Products manufactured by Licensee; and     (ii)
  thereafter have a paid-up, royalty free, nonexclusive license to manufacture,
offer for sale, sell, lease, import and/or use the Products in the Territory
(and/or to have one or more third parties do any or all of these for Licensee)
using Licensor’s Patents, the Intellectual Property Rights and/or Technical
Information provided to Licensee (including

22

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all improvements and inventions by Licensor related thereto) prior to the
termination of the Shareholders Agreement.

15.5   Notwithstanding Article 15.1 above, this Agreement shall be terminated
concurrently with the termination of the Shareholders Agreement if the
termination of the Shareholders Agreement shall have occurred:

  (i)   due to a reason attributable to MBK, CEC, Licensee and/or any of their
permitted assignees pursuant to Article 28.1 (a) or (b) of the Shareholders
Agreement;     (ii)   in accordance Article 28.1 (c) of the Shareholders
Agreement save for the case described in article 15.2 hereof;     (iii)   in
accordance with Article 28.1 (d) (y) of the Shareholders Agreement; or     (iv)
  since the parties to the Shareholders Agreement shall have agreed to the
termination thereof.

15.6   Notwithstanding Article 15.1 above, if a Change of Control referred to in
Article 28.2 (a) of the Shareholders Agreement shall have occurred at the
Licensee, but the Shareholders Agreement is not terminated, the Licensor shall
promptly evaluate the impact of such Change of Control against the business
prospects of the Licensor and may, upon written notice to the Licensee,
discontinue the grant of the license hereunder with respect to any improvements
to the Patent, Technical Information and Intellectual Property Rights, or any
after acquired acquisitions related thereto, arising from and after the date of
such notice, provided, however, that the delivery of such

23

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    notice shall not release the Licensor from its obligations to the Licensee
under this Agreement with respect to all Patents, Technical Information and
Intellectual Property Rights which exist as of the date of such notice.   15.7  
Licensor shall in any event be allowed to sell and distribute in the Territory
the Products or the products which compete or may compete with the Products
after the termination of the Shareholders Agreement, but in no event be allowed
to manufacture directly or indirectly in the Territory the Products or the
products which compete or may compete with the Products until the expiration of
the respective periods in which the exclusive license hereunder is kept by
Licensee after the termination of the Shareholders Agreement as provided in
Article 15.2 through Article 15.5 hereof.   15.8   Royalties due under
Article 15 shall be remitted to the bank account of Licensor in U.S. dollars or,
at Licensor’s request, in Japanese yen. The conversion from local currency to
the currency of payment shall be made at the T. T. Selling spot rate of exchange
quoted by an authorized foreign exchange bank in Minneapolis, MN, U.S.A., on the
previous business day of the date of each remittance. Payment shall be made
within thirty (30) days of the close of the calendar quarter along with a report
detailing number of each Product sold, the gross selling price of the Product,
the Net Sales Price and an itemization of deductions taken to arrive at the Net
Sales Price.

24

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ARTICLE 16. ARBITRATION

Any disputes, controversy or difference which may arise out of or in connection
with or in relation to this Agreement, or for the breach thereof, shall, unless
settled by amicable arrangements of the parties hereto without undue delay, be
settled by arbitration in Tokyo, Japan in accordance with the Rules of Procedure
of the Japan Commercial Arbitration Association if Licensor is claimed to be in
default of this Agreement, or otherwise a respondent, or in Minneapolis, U.S.A.
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association if Licensee is claimed to be in default of this Agreement, or
otherwise a respondent. The award thereof shall be final and binding upon the
parties hereto, and judgement on such award may be entered in any court or
tribunal having jurisdiction thereof.

Article 17. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of
the state of Minnesota, U.S.A. without giving effect to its conflict of laws
provisions.

Article 18. ENTIRE AGREEMENT AND AMENDMENTS

This Agreement contains and constitutes the, entire agreement and understanding
between the parties hereto and supersedes and cancels all previous discussions,
commitments, agreements and understandings of any nature between them, and any
change or modification of this Agreement shall not be binding upon the parties

25

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hereto unless it is made by and instrument in writing of subsequent date signed
by a duly authorized officer or representative of each of the parties hereto.

Article 19. NO-ASSIGNMENT

Neither this Agreement nor any rights or obligations hereunder shall be assigned
by either party without prior written approval of the other party, and any
assignment or transfer without such approval shall be null and void.

Article 20. NOTICE

Any notice or request given hereunder shall be in writing in the English
language and personally delivered or mailed by courier or sent by facsimile or
by telex to the following address, which shall be followed by a confirming
letter mailed within seven (7) days.

         
 
        if to Licensor:   m•FSI LTD.
 
       

  Address:   Harmony Tower, 22nd Floor

      32-2 Honcho 1-chome

      Nakano-ku Tokyo 164-0012, Japan

      Attn: Hideki Kawai
 
       

  Facsimile No :   81-3-5309-8401

26

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          if to Licensee:   FSI INTERNATIONAL, INC.
 
       

  Address:   3455 Lyman Boulevard

      Chaska, MN 55318-3052, USA

      Attn: Benno Sand
 
       

  Facsimile No :   1-952-448-1300

or to such other address as either party may specify from time to time in
writing to the other in accordance herewith.

Article 21. LANGUAGE, HEADINGS, ENFORCEABILITY, NO-WAIVER

21.1   This Agreement is in the English language only, which language shall be
governing in all respects, and any translation thereof shall be for convenience
only and shall not be binding upon the parties hereto.   21.2   The headings of
Articles hereof are for convenience of reference only, and shall not in any way
affect the interpretation hereof.   21.3   In view of the possibility that one
or more of the provisions of this Agreement may subsequently be declared invalid
or unenforceable by court of law, or administrative decision, the parties hereto
agree that invalidity or enforceability of any of the provisions shall not in
any way affect the validity or enforceability of any other provisions of this
Agreement.   21.4   The failure of either party at any time to require
performance by the other party of any provision hereof shall in no way affect
the right to require full performance at

27

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    any time thereafter, nor shall the waiver by either party of a breach of any
provision hereof be taken or held to be a waiver of the provision itself.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their duly authorized officers or representatives as of
the day and year first above written, each duplicate to be considered an
original and one duplicate to be retained by each party.

     
Licensor:
  Licensee:
 
   
m•FSI LTD.
  FSI INTERNATIONAL, INC.
 
   
/s/ Hideki Kawai
  /s/ Benno Sand

--------------------------------------------------------------------------------

 
 

--------------------------------------------------------------------------------

 
Hideki Kawai
  Benno Sand
President
  EVP, Business Development &

  Investor Relations

28

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Appendix I

m•FSI’s Patent and Trademark List

     Patent

                                      Application   Publication   Registration  
  No.

--------------------------------------------------------------------------------

  Title

--------------------------------------------------------------------------------

  No.

--------------------------------------------------------------------------------

  number

--------------------------------------------------------------------------------

  number

--------------------------------------------------------------------------------

  Country

--------------------------------------------------------------------------------

  1    
Method of recirculation of high temperature etching solution
  63–248757   02–096334   1653241   Japan                             2    
Cleaning/ rinsing vessel for semiconductor wafer
  03–350731   05–166787   2013691   Japan                             3    
Method for refinig etchant
  05–253672   07–086260   3072876   Japan                             4    
Single wafer spin etching method
  07–104581   08–279485   3459137   Japan                             5    
Etching method with hot phosphoric acid
  07–216528   09–045660   3459141   Japan                             6    
Composition measuring method for buffered hydrofluoric acid for semiconductor
wafer etching
  07–163075   08–334461   N/A   Japan                             7    
Regeneration treatment apparatus for etchant and etching apparatus using the
same
  10–095836   11–293479   N/A   Japan                             8    
Cleaning apparatus
  11–199868   2001–028356   N/A   Japan                             9    
Filter device with bellows damper and chemical–circulation treatment device for
semiconductor wafer using the same
  11–222204   2001–046815   N/A   Japan                             10    
Semiconductor wafer cleaning system
  11–234855   2001–060574   N/A   Japan                             11    
Method of etching semiconductor wafer
  11–271065   2001–093876   N/A   Japan                             12    
Device and method for etching semiconductor wafer
  11–314794   2001–135611   N/A   Japan                             13    
Scrub cleaning device
  2000–044343   2001–237209   N/A   Japan                             14    
Cleaning Equipment of wafer
  2000–274592   2002–093764   N/A   Japan                             15    
Equipment and method for processing solution for semiconductor wafer
  2001–009915   2002–217165   N/A   Japan                             16    
Wafer–cleaning device
  2001–158580   2002–353183   N/A   Japan                             17    
The apparatus and the method of etching wafer
  2002–42120   2003–243353   N/A   Japan                             18    
The apparatus of reclaiming etching liquid and method and apparatus of etching
  2002–269405   N/A   N/A   Japan                             19    
The method of controlling the boiling chemical
  2002–318730   2004–153164   N/A   Japan                             20    
The apparatus and the method of floating wafer chuck
  2002–108651   2003–303871   N/A   Japan                             21    
The apparatus of wafer treatment and shaft
  2003–47148   N/A   N/A   Japan                             22    
Etching method and equipment
  2002–324795   2004–158746   N/A   Japan                             23    
Processing method and processing device before wafer inspection
  2001–266653   2003–75312   N/A   Japan                             24    
Processing method and processing device before wafer inspection
  2002–156835   2003–344243   N/A   Japan                             25    
Method for recirculating high–temperature etching soluthin
  412444   N/A   4980017   USA                             26    
Method for purification of etching solution
  305334   N/A   5470421   USA

 

--------------------------------------------------------------------------------

 

     Trademarks

                              Class of       Application   Registration NO

--------------------------------------------------------------------------------

  Trademark

--------------------------------------------------------------------------------

  goods

--------------------------------------------------------------------------------

  Designated goods

--------------------------------------------------------------------------------

  No.

--------------------------------------------------------------------------------

  No.

--------------------------------------------------------------------------------

1   NISON   7  
The apparatus of filtering recirculation etching liquid and other chemical
machines and instruments
  H07–040765   3355525                       2   NISON   9  
Automatic fluid– composition control machines and instruments
  HO7–040766   3370801                       3   CENOTE   7  
The apparatus of wafer etching, chemical machines and instruments
  H07–040764   4014567                       4   Stelna   7  
The machines of chemical reaction and machines of separation, the chemical
reclaiming etching apparatus, and other chemical machine and instruments.
  H11–112264   4438204

     
Remark:
  An application shall designate one or more items of goods on which the
trademark is to be used, in one class of the classification of goods, prescribed
by Cabinet Order.

-2-

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Appendix II

m•FSI’s Product List

      Product Name

--------------------------------------------------------------------------------

  Description

--------------------------------------------------------------------------------

Spin Processor CENOTE
  Single Wafer Wet Station
 
   
Best
  Wafer Backside Etcher
 
   
Wet Station
  Immersion Process System

-3-

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Appendix III

Territory

Effective the date of this Agreement, the Territory consists of the following
countries/markets (including all related territories and possessions of each
country):

  •   All countries in the continent of Europe, including, but not limited to,
all current and future member states of the European Union.     •   The United
States of America, Canada and Mexico.     •   All countries in Central and
Eastern Asia (except for Japan) and all countries in Southeast Asia, including,
but not limited to, Taiwan, the Peoples’ Republic of China and South Korea and
all current and future member states of the Association of Southeast Asian
Nations (ASEAN).

-4-

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Appendix IV

Technical Information

1. General Documents

  1)   Technical Reports
- including published articles in journals, academic reports, presentations,
etc.     2)   Example (instance) of Trouble Shooting     3)   Documents List for
Customer
- indicating title and document number of documents sent to customer in general
    4)   Documents List
-indicating all documents required for sales, engineering, maintenance service
and manufacturing     5)   Table and Detailed Information of Acceptable Optional
Order
- showing example (instance) and other acceptable items     6)   Program book

2. Specifications

  1)   General Specifications
- showing

a.   Description of the system basics   b.   Description of the overview, model
comparisons, process application, etc.   c.   Description of the components   d.
  Description of control system for main controller and flow controller

  2)   Technical Specifications     3)   Individual Specifications of Components
    4)   Material Classification for Process Components and Utility Piping
inside of the System     5)   List of Utility and its Consumption

-5-

--------------------------------------------------------------------------------

 

  6)   List of Waste Fluid and Gas, and their volume     7)   Tie-in Condition
- showing required press., flow rate and its capacity     8)   Block Diagram of
Control & Interlocking System     9)   Process/Control Protocol for Customer’s
System     10)   Protocol for Host Computer     11)   Protocol for Wafer
Handling System     12)   Individual Specifications     13)   Required
Specifications for Purchased Components

3. Lists

  1)   I/O List Inside the System     2)   I/O List between the System and
Customer’s Facilities     3)   Components/Module List with its sketch (for
customer)     4)   Electronic Parts List for Printed Circuit Board     5)   Bill
of Material
- such as piping parts including O-ring, wiring parts and standard structural
parts     6)   Recommendable Spare Parts List     7)   Consumable Parts List    
8)   Catalogue of components and consumable parts     9)   Detailed Components
List
- showing parts number, manufacturer’s model number, etc.     10)  
Vendor/Manufacturer List for the Components     11)   Program Source List
- including abbreviation code of parameter/status/command and error code

-6-

--------------------------------------------------------------------------------

 

  12)   List of Figures (Labels for operation and safety)     13)   Check-out
list     14)   Tools list for build-up

4. Drawings

  1)   Functional Diagram
- including solution/pneumatic line     2)   Assembly Drawing
- showing arrangement of main components, consumable parts and major replacement
parts (valve and sensor)     3)   Installation Drawing
- showing required maintenance space and tie-in location     4)   Installation
Drawing for Tie-in Piping     5)   Components Assembly Drawing
- including process chamber, bearing casing, valve manifold, gauge panel,
regulator panel, filter, cable kit, printed circuit board, etc.     6)   Detail
Sectional Drawing of Process Sealing Part     7)   Parts Drawing for Ti-In    
8)   Outline Drawing of Printed Circuit Board
- showing arrangement of connector, adjustable resistor, jumper position and
replacement parts     9)   Schematic Diagram for System Interface     10)  
Schematic Diagram for Power Distribution     11)   Schematic Diagram for Control
    12)   Schematic Diagram for Pneumatic, Utilities and Process Piping     13)
  Schematic Diagram for Printed Circuit Board     14)   Time Sequence Chart

-7-

--------------------------------------------------------------------------------

 

  -   for operation of controllers such as valves

  15)   Wiring Diagram
- including wiring route, connection with parts list     16)   Piping Diagram
- including piping route, connection with parts list     17)   Connection
Schedule of Wires/Cables
- showing relation identification of the wire and terminal/pin number     18)  
Terminal Arrangement Drawing
- including connector pin arrangement     19)   Fabrication Drawing of
Components Manufactured by m•FSI and/or Sub Vendor
- including structural parts, manifold, printed circuit board, cable kit, pipe
kit and its components support

5. Manual

  1)   Installation Manual
- including

a.   Facility requirements   b.   Set up instructions
- for uncrating, leveling, facility connection/interconnection and assembling
work at customer’s site   c.   Inspection procedure for installation   d.  
Requirement for pre-commissioning operation   e.   Check list for start up

  2)   Operation and Instruction Manual
- including

a.   Start up instruction   b.   Machine start up and re-start   c.   Wafer
loading   d.   Monitoring the process   e.   Description for chemical sequence
- including “Abort” routine sequence   f.   Calibration procedure for sensor and
controller   g.   Setting table dip switch of components   h.   Initial setting
parameter for alarm and hardware such as regulator, flow/press controller and
switch   i.   Programming procedure for process parameter

-8-

--------------------------------------------------------------------------------

 

-   including recommendable setting table (program description) of the process
parameter

j.   Performance information   k.   Operating procedure of the system
- including arrangement of menu and operation keys and function table for
designation display on monitor   l.   Operator’s maintenance instruction   m.  
Required maintenance schedule   n.   Recommendable replacement cycle for
consumable parts   o.   Routine check list for maintenance work   p.  
Preventive maintenance instruction   q.   Trouble shooting procedure
-including

a)   Check list (Trouble Shooting Matrix) with information for trouble shooting
guide   b)   List of abbreviation for alarm/warning/error display on the monitor
  c)   Required information for trouble shooting for customer service

  3)   Manufacturer’s Instruction Manual for Components
- including computer, controller and flow/press, controller     4)   Instruction
Manual for Technical Service
-including

a.   List of required tools   b.   Instruction for disassembly and repair work  
c.   Instruction for loading, boot-up, reset data (parameter), etc. required for
technical service work   d.   Detailed trouble shooting procedure   e.  
Detailed routine preventive maintenance procedure

  5)   Instruction Manual for Software
- including assignment manual for operating/alarm information and protocol used
for customer’s computer     6)   Process manual     7)   Inspection manual for
parts     8)   Shipping manual

-9-

--------------------------------------------------------------------------------

 

Appendix V

Remarkable Improvement

Remarkable Improvement means any of the following concerning the Products,
Patent, Intellectual Property Rights and/or Technical Information.

1.   the improvement upon which the Licensee has spent at least $5,000 (U.S.
dollars) and based on a patent which has been filed by the Licensor/Licensee;  
2.   the improvement which is worthy of a patent and the cost of development of
which is more than the amount described in the above item 1, but the filing of a
patent is considered to be avoided not to let the competitors of the
Licensee/Licensor know such an improvement;   3.   the improvement patented in
U.S.A. or Japan; or   4.   the improvement acknowledged by Licensee and Licensor
as a Remarkable Improvement which is worthy of a patent, though no application
is filed by Licensee/Licensor.

-10-

--------------------------------------------------------------------------------

 

EXHIBIT C

Shareholders Agreement among

FSI International, Inc.

and

Mitsui & Co., Ltd.

and

Chlorine Engineers Corp., Ltd.

(“The Shareholders Agreement”)

including any prior amendments to the Shareholders Agreement, namely:

AMENDMENT TO SHAREHOLDERS AGREEMENT
(from February 1, 1998 through March 31, 1999)
(inserted below)

AMENDMENT TO SHAREHOLDERS AGREEMENT

     Chlorine Engineers Corp., Ltd (“CEC”), Mitsui & Co. Ltd. (“Mitsui”) and FSI
International, Inc. agree to amend Section 10.1 of the Shareholders Agreement to
provide that from February 1, 1998 through March 31, 1999 the Board of m•FSI
shall consist of nine members FSI shall have the right to nominate up to four
persons and Mitsui and CEC collectively shall have the right to nominate up to
five persons to serve as members of the Board. Unless this amendment is extended
by FSI, Mitsui and CEC is shall expire March 31, 1999.

     This Amendment may be executed in one more counterparts and facsimile
copies shall be created the same as an original.

     
FSI INTERNATIONAL, INC.
  MITSUI & CO, LTD.
 
   
By: J.A. Elftmann
  By: /s/ [ILLEGIBLE]

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       [ILLEGIBLE]
 
   
Its: Chairman & CEO
  Its: General Manager

 

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       Chemical Plant Division
 
   
CHLORINE ENGINEERS CORP., LTD.
   
 
   
By: /s/ ???
   

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???
   
Its: President
   

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