Exhibit 2.2
SHAREHOLDERS AGREEMENT
This Shareholders Agreement is made and entered into as of the 5th day
of February, 1996 among FSI International, Inc., a Minnesota corporation
("FSI"), and the shareholders of Semiconductor Systems, Inc., a California
corporation ("SSI"), listed in the Annex to this Agreement (the "Shareholders").
FSI and the Shareholders are referred to collectively herein as the "Parties."
FSI, Spectre Acquisition Corp., a California corporation and wholly
owned subsidiary of FSI ("Spectre"), and SSI are entering into an Agreement and
Plan of Reorganization concurrently herewith (the "Reorganization Agreement").
Certain terms used herein without definition shall have the meanings ascribed
thereto in the Reorganization Agreement.
The Reorganization Agreement contemplates a transaction in which
Spectre will merge with and into SSI, whereby the outstanding shares of Common
Stock of SSI will be converted into shares of Common Stock of FSI.
FSI and SSI make certain representations, warranties and covenants in
the Reorganization Agreement which will survive the Closing for purposes of
potential indemnification. The Shareholders wish to provide for post-Closing
indemnification to FSI against breaches of these representations, warranties and
covenants and to make certain other covenants among themselves.
Now, therefore, in consideration of the premises and the mutual
promises herein made, FSI and the Shareholders agree as follows.
1. Definitions.
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Capitalized terms used in this Shareholders Agreement and not
otherwise defined herein shall have the same meanings as used in the
Reorganization Agreement. In addition:
"Affiliate" means, with respect to any specified Person, any other
Person that directly or indirectly through one or more intermediaries, controls,
is controlled by, or is under common control with the Person specified. For the
purpose of this definition, "control" means the ability to direct or cause the
direction of the management or affairs of a Person, whether through the direct
or indirect ownership of voting interests, by contract or otherwise.
"Annex" has the meaning set forth in Section 2 below.
"Party" has the meaning set forth in the preface above.
"Reorganization Agreement" has the meaning set forth in the preface
above.
"Requisite Shareholders" means the Shareholders holding a majority in
interest of the total number of shares of SSI Common Stock that all of the
Shareholders hold in the aggregate as set forth in the Annex.
"Tax" or "Taxes" means any and all federal, state, local and foreign
taxes, assessments and other governmental charges, duties, impositions and
liabilities, including taxes based upon or measured by gross receipts, income,
profit, sales, use and occupation, and value added, ad valorem, transfer,
franchise, withholding, payroll, recapture, employment, excise and property
taxes, together with all interest, penalties and additions imposed with respect
to such amounts and any obligations under any arrangements or
agreements with any other person with respect to such amounts and including any
liability for taxes of a predecessor entity.
"Transfer Taxes" means all Taxes, other than Taxes measured by net
income, incurred or imposed by reason of the sale, assignment, transfer of title
or conveyance of (i) the assets and liabilities of SSI as a result of the Merger
or (ii) the Common Stock of SSI, regardless upon whom such Taxes are levied or
imposed by law, including without limitation sales, excise, use, stamp,
documentary, filing, recording, permit, license, authorization, intangible and
similar Taxes.
2. Representations and Warranties of the Shareholders. Each of the
Shareholders severally represents and warrants to FSI that the statements
contained in this Section 2 are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date (as though
made then and as though the Closing Date were substituted for the date of this
Agreement throughout this Section 2) with respect to himself, except as set
forth in the Annex attached hereto (the "Annex").
(a) Authorization. The Shareholder has full power and authority to
execute and deliver this Agreement and to perform his obligations hereunder.
This Agreement constitutes the valid and legally binding obligation of the
Shareholder, enforceable in accordance with its terms and conditions.
(b) Noncontravention. Neither the execution and the delivery of this
Agreement by the Shareholder, nor the performance by the Shareholder of his
obligations hereunder, will (i) violate any constitution, statute, regulation,
rule, injunction, judgment, order, decree, ruling, charge, or other restriction
of the government, governmental agency, or court to which the Shareholder is
subject or (ii) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
the Shareholder is a party or by which he is bound or to which any of his assets
is subject.
(c) SSI Shares. The Shareholder holds of record the number of shares
of Common Stock of SSI set forth next to his name on the Annex.
3. Agreement and Joinder. Each Shareholder hereby agrees to
indemnify the Indemnitees to the extent and pursuant to and in accordance with
the terms and provisions set forth in the Article VII of the Reorganization
Agreement, as if each Shareholder were a party to such Reorganization Agreement.
In addition, each Shareholder hereby confirms the appointment of Xxxxxxx X.
Xxxxxx as the Securityholder Agent of the Shareholders, all as provided in
Article VII of the Reorganization Agreement. The authority given to the
Securityholders Agent under the Reorganization Agreement is granted and
conferred in consideration of and subject to the interests of the other
Shareholders and shall be irrevocable and shall not be terminated by the
Shareholder or by any other event (including without limitation the death or
incapacity of the Shareholder), whether by operation of law or otherwise, except
as provided in Section 7.12 of the Reorganization Agreement.
4. Post-Closing Covenants. The Parties agree as follows with respect
to the period following the Closing.
(a) General. In case at any time after the Closing any further action
is necessary to carry out the purposes of the Reorganization Agreement, each of
the Parties will take such further action (including the execution and delivery
of such further instruments and documents) as any other Party reasonably may
request, all at the sole cost and expense of the requesting Party (unless the
requesting Party is entitled to
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indemnification therefor under the Reorganization Agreement). The Shareholders
acknowledge and agree that from and after the Closing FSI will be entitled to
possession of all documents, books, records (including tax records), agreements,
and financial data of any sort relating to SSI .
(b) Litigation Support. In the event and for so long as any Party
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection with
(i) any transaction contemplated under the Reorganization Agreement or (ii) any
fact, situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving SSI , each of the other Parties will cooperate
with the contesting or defending Party and such Party's counsel in the contest
or defense and provide such testimony and access to such Party's books and
records as shall be necessary in connection with the contest or defense, all at
the sole cost and expense of the contesting or defending Party (unless the
contesting or defending Party is entitled to indemnification therefor under
Section 4 below).
5. Tax Agreements and Obligations
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(a) Tax Liabilities. The Shareholders shall be responsible and liable
for 50% of any and all Transfer Taxes.
(b) Tax Records. On the Closing Date, SSI shall retain all of its Tax
records in its possession. Within 10 days after the Closing Date, the
Shareholders shall deliver to the Surviving Corporation or FSI all of the Tax
records of SSI and records relating to the business of SSI that are in the
Shareholders' and their Affiliates possession. The Shareholders may retain a
copy of such Tax records. The Shareholders, the Surviving Corporation, FSI and
their Affiliates shall make available to each other for inspection and copying
during normal business hours, in connection with and with respect to matters
that are relevant to the preparation of Tax returns, Tax audits and Tax
litigation, all Tax records in their possession relating to SSI and its
activities, assets, and business. The Shareholders, the Surviving Corporation,
FSI and their Affiliates shall preserve and keep such Tax records in their
possession until the expiration of any applicable statutes of limitation or
extensions thereof and as otherwise required by law, but in any event for a
period not less than seven complete tax years after the Closing Date.
Notwithstanding the foregoing, any of such parties may dispose of such records
if 90 days advance written notice of intent to dispose is given to the other
parties beforehand. Such notice shall be delivered in accordance with the notice
provisions set forth in this Agreement and shall include a list of the records
to be disposed of describing each file, book or other record accumulation being
disposed in reasonable detail. Each notified party shall have the opportunity,
at its cost and expense, to copy or remove, within such ninety day period, all
or any part of such Tax records. For the purposes of this Section 5(b), Tax
records include, without limitation, journal vouchers, cash vouchers, general
ledgers, material contracts, and authorizations for expenditures.
(c) Tax Assistance and Cooperation. For a period of seven years from
and after the Closing Date, FSI, the Surviving Corporation and the Shareholders
shall (i) cooperate (and cause their respective Affiliates to cooperate) with
each other and with each other's respective agents, including accounting firms
and legal counsel, in connection with the preparation or audit of any Tax return
or report, amended return or report, claim for refund and any tax claim or
litigation in respect of SSI that include whole or partial taxable periods,
activities, operations or events prior to the Effective Date, which cooperation
shall include, but not be limited to, preserving and making available to the
other all information, records, and documents in their possession or control
relating to liabilities for Taxes associated with the operation of SSI prior to
the Effective Date, and (ii) make available to the other as reasonably requested
and available, personnel responsible for preparing, maintaining and interpreting
information, records and documents in connection
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with Taxes as well as related litigation. Any information provided or obtained
under this Section 5(c) shall be kept confidential, except as may be otherwise
necessary in connection with the filing of returns or reports, refund claims,
audits, tax claims and litigation. The Surviving Corporation and the
Shareholders shall provide the other with prompt notice in writing of any
pending or threatened tax audits, assessments or proceedings that they become
aware of related to the business or operations of SSI for whole or partial
periods prior to the Closing Date; provided that in any event such notice shall
not be given more than 10 business days after such party learns of such pending
or threatened tax audit, assessment or proceeding. Such notice shall contain
factual information (to the extent known) describing the asserted tax liability
in reasonable detail and shall be accompanied by copies of any notice or other
document received from or with any tax authority in respect of any such matters.
The Shareholders shall not compromise any audit issue affecting SSI or its
business for whole or partial periods from and after the Effective Date without
advising the Surviving Corporation and FSI in writing of the issues, risks and
proposed compromise. Where such compromise will affect any Taxes for which the
Surviving Corporation or FSI is liable and the Shareholders have received notice
from the Surviving Corporation or FSI concerning such effect, then,
notwithstanding the foregoing provisions of this Section 5(c) to the contrary,
the Shareholders will not compromise such issue without the Surviving
Corporation's or FSI's written consent, as the case may be, which consent will
not be unreasonably withheld. The Surviving Corporation and FSI shall not
compromise any audit issue affecting the Shareholders for whole or partial
periods from and after the Effective Date without advising the Securityholder
Agent in writing of the issues, risks and proposed compromise. Where such
compromise will affect any Taxes for which the Shareholders are liable, then,
notwithstanding the foregoing provisions of this Section 5(c) to the contrary,
neither the Surviving Corporation nor FSI will compromise such issue without the
Securityholder Agent's written consent, which consent will not be unreasonably
withheld. Reasonable out-of-pocket expenses with respect to such contests shall
be borne by Shareholders and the Surviving Corporation or FSI in proportion to
their responsibility for such Taxes. The noncontrolling party shall be afforded
a reasonable opportunity to participate in such proceedings at its own expense.
(d) Tax Returns. The Shareholders shall prepare and file, or cause to
be prepared and filed, when due (i) all Tax returns and reports related to SSI
and the direct or indirect ownership of SSI which were required to have been
filed or furnished before the Effective Date, (ii) returns and reports for
Transfer Taxes which were required to have been filed or furnished on or before
the Effective Date, and (iii) returns the Shareholders must file by law. FSI
shall timely prepare and file, or cause to be prepared and filed, when due all
other Tax returns and reports that are related to SSI and the direct or indirect
ownership of SSI, including all income and franchise Tax returns and reports of
SSI which are required to be filed after the Closing with respect to tax periods
ending before the Effective Date. Returns and reports prepared and filed by the
Surviving Corporation or FSI for pre-Effective Date periods shall be prepared
consistently with past tax accounting practices used with respect to SSI's
returns and reports, including elections, accounting methodologies and asset
write-off periods, and to the extent any return or report items are not covered
by such past practices, in accordance with practices selected by the Surviving
Corporation or FSI. The Surviving Corporation or FSI shall provide the
Securityholder Agent with a copy of any income Tax returns and reports (and
supporting schedules) of SSI prepared by them for pre-Effective Date periods, in
the form proposed to be filed by the Surviving Corporation or FSI, at least 15
days in advance of the due date for income Tax returns (taking into account any
extension of time to file). The Securityholder Agent shall have the right to
approve such returns or reports prior to their filing (provided such approval
shall not be unreasonably withheld). The Securityholder Agent and the Surviving
Corporation or FSI shall attempt in good faith to resolve any issues arising out
of the review of such returns or reports. If, within a reasonable period of
time prior to the due date for filing any such return (taking into account any
extension of time to file), the Securityholder Agent has not so approved such
return for filing, then the Surviving Corporation and FSI shall promptly, and,
no later than 10 days prior to the due date for filing such return,
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appoint an independent public accounting firm, reasonably acceptable to both
parties, to resolve the specific issues preventing approval by the
Securityholder Agent. The appointed accounting firm shall resolve such issues in
accordance with this Section 5(d) no later than five days prior to the due date
for filing such return. The determination of the appointed accounting firm shall
be final and binding on all of the parties, and such return shall be filed based
upon such resolution. The fees and expenses of such accounting firm in resolving
any such dispute shall be borne equally by FSI and the Shareholders.
6. Termination of Shareholder Arrangements. Each of the Shareholders
hereby agrees to terminate, effective as of the Closing Date, any and all
agreements between SSI and such Shareholder that contain any registration,
voting, rights of first refusal or other similar rights and where such rights
would otherwise survive the Merger.
7. Termination. This Agreement shall terminate if and only if the
Reorganization Agreement is terminated prior to the Closing in accordance with
and pursuant to the terms thereof.
8. Miscellaneous.
(a) Exclusivity. None of the Shareholders will (i) solicit, initiate,
or encourage the submission of any proposal or offer from any Person relating to
the acquisition of any capital stock or other voting securities, or any
substantial portion of the assets, of SSI (including any acquisition structured
as a merger, consolidation, or share exchange) or (ii) except for actions by
such individuals in their capacities as officers of SSI and where the failure to
take such actions would, based upon the advice of outside legal counsel, be a
breach of fiduciary duty under applicable law, participate in any discussions or
negotiations regarding, furnish any information with respect to, assist or
participate in, or facilitate in any other manner any effort or attempt by any
Person to do or seek any of the foregoing. None of the Shareholders will vote
their shares of SSI Common Stock in favor of any such acquisition structured as
a merger, consolidation, or share exchange.
(b) No Third Party Beneficiaries. Except as herein provided
(including pursuant to Article VII of the Reorganization Agreement), this
Agreement shall not confer any rights or remedies upon any Person other than the
Parties and their respective successors and permitted assigns.
(c) Entire Agreement. This Agreement (including the documents
referred to herein) constitutes the entire agreement among the Parties and
supersedes any prior understandings, agreements, or representations by or among
the Parties, written or oral, to the extent they related in any way to the
subject matter hereof.
(d) Succession and Assignment. This Agreement shall be binding upon
and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement or
any such Party's rights, interests, or obligations hereunder with the prior
written approval of FSI and the Requisite Shareholders; provided, however, that
FSI may assign any or all of its rights and interests hereunder to one or more
of its Affiliates.
(e) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(f) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
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(g) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
If to the Shareholders: Copy to:
Xxxxxxx X. Xxxxxx, Xx., Securityholder Agent Wilson, Sonsini, Xxxxxxxx & Xxxxxx
00000 Xxxxxxx Xxxxx Xxxxx 000 Xxxx Xxxx Xxxx
Xxxxxxxx, Xxxxxxxxxx 00000 Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
If to FSI International, Inc.: Copy to:
FSI International, Inc. Faegre & Xxxxxx PLLP
000 Xxxx Xxxxxxxxx Xxxxx 0000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxx 00000 00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx: Chief Financial Officer Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxx, Esq.
Any Party may send any notice, request, demand, claim or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
party may change the address which notices, requests, demands, claims and other
communications hereunder are to be delivered by giving the other Parties notice
in the manner herein set forth.
(h) Governing Law. This Agreement shall be governed by and construed
in accordance with the domestic laws of the State of Minnesota without giving
effect to any choice or conflict of law provision or rule (whether of the State
of Minnesota or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Minnesota.
(i) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by FSI
and either the Securityholder Agent or the Requisite Shareholders. No waiver by
any Party of any default, misrepresentation, or breach of warranty or covenant
hereunder, whether intentional or not, shall be deemed to extend to any prior or
subsequent default, misrepresentation, or breach of warranty or covenant
hereunder or affect in any way any rights arising by virtue of any prior or
subsequent such occurrence.
(j) Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(k) Expenses. Each of the Parties will bear his or its own costs and
expenses (including legal fees and expenses) incurred in connection with this
Agreement and the transactions contemplated hereby (except as otherwise provided
herein).
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(l) Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local,
or foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation.
(m) Incorporation of Annex. The Annex is incorporated herein by
reference and made a part hereof.
[THIS PORTION WAS LEFT INTENTIONALLY BLANK.]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
FSI INTERNATIONAL, INC.
By: /s/ XXXXX X. SAND
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Title: Executive Vice President and
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Chief Financial Officer
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SHAREHOLDERS
/s/ QUI XXX XXXXXX
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(signature)
Qui Xxx Xxxxxx
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/s/ XXXXXXX X. VAN DE VEN
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(signature)
Xxxxxxx X. Van De Ven
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/s/ XXXXXX X. XXXXXXXXX
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(signature)
Xxxxxx X. Xxxxxxxxx
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/s/ XXXX XXXXXXXX
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(signature)
Xxxx Xxxxxxxx
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/s/ XXXXXXX X. XXXXXX
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(signature)
Xxxxxxx X. Xxxxxx
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/s/ XXXXX X. XXXXXXXXX
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(signature)
Xxxxx X. Xxxxxxxxx
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(print)
/s/ XXXXXXX X. XXX
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(signature)
Xxxxxxx X. Xxx
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(print)
/s/ XXXXXXX X. XXXX
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(signature)
Xxxxxxx X. Xxxx
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/s/ XXXXXX X. XXXXXX
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(signature)
Xxxxxx X. Xxxxxx
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/s/ XXXXX X. XXXXXXXXXXX
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(signature)
Xxxxx X. Xxxxxxxxxxx
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(print)
/s/ XXXXXXX X. XXXXXXXXXX
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(signature)
Xxxxxxx X. Xxxxxxxxxx
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/s/ XXXXXXXX X. XXXXXX
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(signature)
Xxxxxxxx X. Xxxxxx
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(print)
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/s/ XXXXXX X. XXXXXXXXX
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(signature)
Xxxxxx X. Xxxxxxxxx
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(print)
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