EXHIBIT 10.1
TERMINATION AND RELEASE
     THIS TERMINATION AND RELEASE (the “Agreement”), effective as of this 15th
day of May, 2007, is made by and among FSI International, Inc., a Minnesota
corporation (“FSI”); Mitsui & Co., Ltd., a company organized under the laws of
Japan (“MBK”); Cholorine Engineers Corp. Ltd, a company organized under the laws
of Japan (“CEC”); MBK Project Holdings Ltd., a company organized under the laws
of Japan (“MPH”); and m•FSI Ltd., a company organized under the laws of Japan
(“m•FSI”).
     WHEREAS, FSI, MBK, CEC and MPH are parties to that certain agreement among
the shareholders of m•FSI originally dated June 5, 1991, as such agreement has
been amended (the “Shareholders Agreement”);
     WHEREAS, in connection with the Shareholders Agreement, m•FSI and FSI
entered into the following additional agreements: (i) an agreement dated
September 17, 2004, as amended, under which m•FSI appointed FSI as a distributor
of its products (the “m•FSI Distribution Agreement); (ii) an agreement dated
June 5, 1991, as amended, under which FSI appointed m•FSI as a distributor of
its products (the “FSI Distribution Agreement”); (iii) an agreement dated
September 17, 2004, as amended, pursuant to which m•FSI granted to FSI a license
under certain m•FSI intellectual property and technology (the “m•FSI License
Agreement”); and (iv) an agreement dated September 17, 2004, as amended,
pursuant to which FSI granted m•FSI a license under certain FSI intellectual
property rights and technology (the “FSI License Agreement”);
     WHEREAS, in connection with the Shareholders Agreement, m•FSI and CEC
entered into an agreement dated August 14, 1991, as amended, pursuant to which
CEC granted m•FSI a license under certain CEC intellectual property rights and
technology (the “CEC License Agreement”);
     WHEREAS, FSI, MBK, and CEC have entered to an agreement of even date
herewith with certain third parties relating to the sale of all or part of the
shares in m•FSI held by FSI, MBK, CEC and MPH (the “Stock Purchase Agreement”)
and, as a result, have agreed to terminate the Shareholders Agreement and FSI
has agreed to enter into a new shareholders agreement with the buyers and other
new shareholders of m•FSI to reflect the changed ownership structure and the
various rights and obligations of the new shareholders of m•FSI as a result
thereof; and
     WHEREAS, in conjunction with the closing of the Stock Purchase Agreement
and the execution of the new shareholders agreement, FSI and m•FSI desire to
enter into a new distributorship agreement under which m•FSI will distribute
certain of FSI’s products in Japan and the parties hereto desire to terminate
the agreements referenced in the second and third paragraph of this Preamble.
     NOW, THEREFORE, in consideration of the foregoing premises and of other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

 

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     1. Termination of Agreements. The parties hereto agree that the following
agreements shall be terminated:
           (a) FSI, MBK, CEC and MPH hereby agree that the Shareholders
Agreement shall be terminated.
           (b) FSI and m•FSI hereby agree that the (i) m•FSI Distribution
Agreement, (ii) the FSI Distribution Agreement, (iii) the m•FSI License
Agreement and (iv) the FSI License Agreement shall be terminated.
           (c) CEC and m•FSI hereby agree that the CEC License Agreement shall
be terminated.
All of the above referenced agreements are referred to herein as the “Terminated
Agreements”. The parties to the above agreements further acknowledge and agree
that, except as set forth in Section 2 below, each and every obligation of any
party under any of the Terminated Agreements has been completely discharged and
that such Terminated Agreement no longer have any force or effect.
     2. Reservation of Rights and Continuing Obligations. Notwithstanding the
termination of the Terminated Agreements, the parties acknowledge and agree
that:
           (a) FSI reserves its right to enforce and seek compensation under the
terms and conditions of Article 26 of the Shareholders Agreement, No
Competition, in the event that it is determined that CEC shall have breached
such Article through the development and collaboration with Toshiba of a process
for the use of electrolyzed sulfuric acid for resist stripping applications in
direct competition with FSI’s ZETA ViPR products, and FSI’s ability to enforce
its rights under such Article 26 shall survive termination of the Shareholders
Agreement for a period of one (1) year from the date of this Agreement; and
           (b) FSI shall remain obligated to honor all warranties and duties to
indemnify m•FSI in respect of its products and spare parts provided to m•FSI in
accordance with the terms of the FSI Distribution Agreement until the applicable
warranty periods in respect of such products and spare parts sold to m•FSI under
the FSI Distribution Agreement all expire.
     3. Compensation for Loss of Rights. In consideration for the termination
hereunder of the m•FSI License Agreement and the m•FSI Distribution Agreement
and the consequent loss by FSI of rights under m•FSI’s technology and the right
distribute m•FSI’s products outside of Japan, m•FSI agrees to pay to FSI the sum
of Seventy-three Million Yen (¥73,000,000) by wire transfer of immediately
available funds contemporaneously with the execution of this Agreement.
     4. Effective Date. This Agreement shall take effect upon the Closing of the
Stock Purchase Agreement and the transfer by FSI, CEC and MBK of their shares in
m•FSI to the buyers under the terms of the Stock Purchase Agreement.
     5. Release. Except as expressly set forth in Section 2 above, each of the
parties hereto, acting for itself, its insurers, its successors and assigns, and
each of them, does hereby release and forever discharge each of the other
parties hereto and their respective shareholders, partners, members, directors,
officers, employees, agents, consultants, successors and assigns from any and
all liabilities, claims, demands and causes of action,

 

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either in law or in equity, known or unknown, liquidated or unliquidated, which
have arisen or may arise out of or are in any way connected with the Terminated
Agreements on account of any act, omission, event, occurrence, representation,
warranty, failure, default or breach, actual or asserted, of any party hereto or
its officers, employees, agents, consultants or representatives on or prior to
the date of this Agreement.
     IN WITNESS WHEREOF, each party has executed this Agreement as of the day
and year first above written.

      FSI INTERNATIONAL INC   MITSUI & CO., LTD. By: /s/ John C. Ely
 
  By: /s/ Koji ARAI
 
Name: John C. Ely
 
  Name: Koji ARAI
 
Title: VP Sales/Service
 
  Title: General Manager
           Infrastructure & Environment Project
           Development Dept.
           First Projects Development Div.
  CHLORINE ENTINEERS CORP., LTD   MBK PROJECT HOLDINGS LTD. By: /s/ Yoshinori
KATO
 
  By: /s/ Masato SHIODE
 
Name: Yoshinori KATO
 
  Name: Masato SHIODE
 
Title: President
 
  Title: President
 

            m•FSI LTD.
      By:   /s/ Hideki Kawai         Name: Hideki Kawai         
Title: President & CEO