Exhibit 10.4

 

EXECUTION COPY

 

Opening Transaction

 

 

 

Rudolph Technologies, Inc.

To:

 

One Rudolph Road

 

 

P.O. Box 1000

 

 

Flanders, New Jersey 07836

 

 

 

A/C:

 

 

 

 

 

From:

 

Credit Suisse International

 

 

One Cabot Square

 

 

London E14 4QJ

 

 

England

 

 

 

Re:

 

Issuer Warrant Transaction

 

 

 

Ref. No:

 

 

 

 

 

Date:

 

July 19, 2011

 

Dear Sir(s):

 

The purpose of this communication (this “Confirmation”) is to set forth the
terms and conditions of the above-referenced transaction entered into on the
Trade Date specified below (the “Transaction”) between Credit Suisse
International (“Dealer”), represented by Credit Suisse Securities (USA) LLC
(“Agent”) as its agent, and Rudolph Technologies, Inc (“Issuer”).  This
communication constitutes a “Confirmation” as referred to in the Agreement
specified below.

 

1.     This Confirmation is subject to, and incorporates, the definitions and
provisions of the 2000 ISDA Definitions (including the Annex thereto) (the “2000
Definitions”) and the definitions and provisions of the 2002 ISDA Equity
Derivatives Definitions (the “Equity Definitions”, and together with the 2000
Definitions, the “Definitions”), in each case as published by the International
Swaps and Derivatives Association, Inc. (“ISDA”).  In the event of any
inconsistency between the 2000 Definitions and the Equity Definitions, the
Equity Definitions will govern.  For purposes of the Equity Definitions, each
reference herein to a Warrant shall be deemed to be a reference to a Call Option
or an Option, as context requires.

 

Each party is hereby advised, and each such party acknowledges, that the other
party has engaged in, or refrained from engaging in, substantial financial
transactions and has taken other material actions in reliance upon the parties’
entry into the Transaction to which this Confirmation relates on the terms and
conditions set forth below.

 

This Confirmation evidences a complete and binding agreement between Dealer and
Issuer as to the terms of the Transaction to which this Confirmation relates. 
This Confirmation shall be subject to an agreement (the “Agreement”) in the form
of the 1992 ISDA Master Agreement (Multicurrency-Cross Border), as published by
ISDA, as if Dealer and Issuer had executed an agreement in such form on the date
hereof (but without any Schedule except for (i) the election of Loss and Second
Method and US Dollars (“USD”) as the Termination Currency, (ii) the replacement
of the word “third” in the last line of Section 5(a)(i) with the word “first”
and (iii) the election that the “Cross Default” provisions of
Section 5(a)(vi) shall apply to Issuer with a “Threshold Amount” of USD 10
million).  The Transaction shall be the only Transaction under the Agreement.

 

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All provisions contained in, or incorporated by reference to, the Agreement will
govern this Confirmation except as expressly modified herein.  In the event of
any inconsistency between this Confirmation and either the Definitions or the
Agreement, this Confirmation shall govern.

 

2.     The Transaction is a Warrant Transaction, which shall be considered a
Share Option Transaction for purposes of the Equity Definitions.  The terms of
the particular Transaction to which this Confirmation relates are as follows:

 

General Terms:

 

Trade Date:

 

July 20, 2011

 

 

 

Effective Date:

 

July 25, 2011, or such other date as agreed between the parties, subject to
Section 8(l) below

 

 

 

Components:

 

The Transaction will be divided into individual Components, each with the terms
set forth in this Confirmation, and, in particular, with the Number of Warrants
and Expiration Date set forth in this Confirmation. The payments and deliveries
to be made upon settlement of the Transaction will be determined separately for
each Component as if each Component were a separate Transaction under the
Agreement.

 

 

 

Warrant Style:

 

European

 

 

 

Warrant Type:

 

Call

 

 

 

Seller:

 

Issuer

 

 

 

Buyer:

 

Dealer

 

 

 

Shares:

 

The Common Stock of Issuer, par value USD 0.001 per share (Ticker Symbol:
“RTEC”).

 

 

 

Number of Warrants:

 

For each Component, as provided in Annex A to this Confirmation.

 

 

 

Warrant Entitlement:

 

One Share per Warrant

 

 

 

Strike Price:

 

USD 17.00. Notwithstanding anything to the contrary in the  Agreement, this
Confirmation or the Equity Definitions, unless Issuer shall have obtained
stockholder approval of the issuance of Shares under the Transaction in
accordance with the applicable rules of the relevant Exchange, in no event shall
the Strike Price be subject to adjustment to the extent that, after giving
effect to such adjustment, the Strike Price would be less than USD 9.59, except
for any adjustment pursuant to the terms of this Confirmation and the Equity
Definitions in connection with stock splits or similar changes to Issuer’s
capitalization.

 

 

 

Premium:

 

USD 5,839,346 (Premium per Warrant approximately USD 1.51)

 

 

 

Premium Payment Date:

 

The Effective Date

 

 

 

Exchange:

 

NASDAQ Global Select Market

 

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Related Exchange:

 

All Exchanges

 

 

 

Procedures for Exercise:

 

 

 

 

 

In respect of any Component:

 

 

 

 

 

Expiration Time:

 

Valuation Time

 

 

 

Expiration Date:

 

As provided in Annex A to this Confirmation (or, if such date is not a Scheduled
Trading Day, the next following Scheduled Trading Day that is not already an
Expiration Date for another Component); provided that if that date is a
Disrupted Day, the Expiration Date for such Component shall be the first
succeeding Scheduled Trading Day that is not a Disrupted Day and is not or is
not deemed to be an Expiration Date in respect of any other Component of the
Transaction hereunder; and provided further that if the Expiration Date has not
occurred pursuant to the preceding proviso as of the Final Disruption Date, the
Calculation Agent may elect in its discretion that the Final Disruption Date
shall be the Expiration Date (irrespective of whether such date is an Expiration
Date in respect of any other Component for the Transaction). “Final Disruption
Date” means January 20, 2017. Notwithstanding the foregoing and anything to the
contrary in the Equity Definitions, if a Market Disruption Event occurs on any
Expiration Date, the Calculation Agent may determine that such Expiration Date
is a Disrupted Day only in part, in which case (i) the Calculation Agent shall
make adjustments to the Number of Warrants for the relevant Component for which
such day shall be the Expiration Date and shall designate the Scheduled Trading
Day determined in the manner described in the immediately preceding sentence as
the Expiration Date for the remaining Warrants for such Component and (ii) the
VWAP Price for such Disrupted Day shall be determined by the Calculation Agent
based on transactions in the Shares on such Disrupted Day effected before the
relevant Market Disruption Event occurred and/or after the relevant Market
Disruption Event ended. Any day on which the Exchange is scheduled to close
prior to its normal closing time shall be considered a Disrupted Day in whole.
If a Market Disruption Event occurs on the Expiration Date for any Component,
the Calculation Agent, in its good faith and commercially reasonable discretion,
may determine the VWAP Price for such Expiration Date using its good faith
estimate of the value of the Shares on such Expiration Date based on the volume,
historical trading patterns and price of the Shares and such other factors as it
deems appropriate. Section 6.6 of the Equity Definitions shall not apply to any
Valuation Date occurring on an Expiration Date.

 

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Market Disruption Events:

 

The first sentence of Section 6.3(a) of the Equity Definitions is hereby amended
(A) by deleting the words “during the one hour period that ends at the relevant
Valuation Time, Latest Exercise Time, Knock-in Valuation Time or Knock-out
Valuation Time, as the case may be” in the third, fourth and fifth lines
thereof, and (B) by replacing the words “or (iii) an Early Closure.” by
“(iii) an Early Closure, or (iv) a Regulatory Disruption.”

 

 

 

 

 

Section 6.3(d) of the Equity Definitions is hereby amended by deleting the
remainder of the provision following the term “Scheduled Closing Time” in the
fourth line thereof.

 

 

 

Regulatory Disruption:

 

Any event that Dealer, in its discretion, determines makes it appropriate with
regard to any legal, regulatory or self-regulatory requirements or related
policies and procedures (whether or not such requirements, policies or
procedures are imposed by law or have been voluntarily adopted by Dealer, and
including without limitation Rule 10b-18, Rule 10b-5, Regulation 13D-G and
Regulation 14E under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), and Regulation M), for Dealer to refrain from or decrease any
market activity in connection with the Transaction. Dealer shall notify Issuer
as soon as reasonably practicable that a Regulatory Disruption has occurred and
the Expiration Dates affected by it.

 

 

 

Automatic Exercise:

 

Applicable; and means that the Number of Warrants for the corresponding
Expiration Date will be deemed to be automatically exercised at the Expiration
Time on such Expiration Date unless Buyer notifies Seller (by telephone or in
writing) prior to the Expiration Time on such Expiration Date that it does not
wish Automatic Exercise to occur, in which case Automatic Exercise will not
apply to such Expiration Date.

 

 

 

Issuer’s Telephone Number and Telex and/or Facsimile Number and Contact Details
for purpose of Giving Notice:

 

Rudolph Technologies, Inc.

 

 

One Rudolph Road

 

 

P.O. Box 1000

 

 

Flanders, New Jersey 07836

 

 

Attn:

Robert A. Koch

 

 

Telephone:

(973) 448-4487

 

 

Facsimile:

(973) 691-1435

 

 

Email:

robert.koch@rudolphtech.com

 

 

 

Settlement Terms:

 

 

 

 

 

In respect of any Component:

 

 

 

 

 

Settlement Currency:

 

USD

 

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Net Share Settlement:

 

On each Settlement Date, Issuer shall deliver to Dealer a number of Shares equal
to the Number of Shares to be Delivered for such Settlement Date to the account
specified by Dealer and cash in lieu of any fractional Shares valued at the
Relevant Price on the Valuation Date corresponding to such Settlement Date. If,
in the reasonable judgment of Dealer, for any reason, the Shares deliverable
upon Net Share Settlement would not be immediately freely transferable by Dealer
under Rule 144 under the Securities Act of 1933, as amended (the “Securities
Act”), then Dealer may elect to either (x) accept delivery of such Shares
notwithstanding any restriction on transfer or (y) have the provisions set forth
in Section 8(b) below apply.

 

 

 

 

 

The Number of Shares to be Delivered shall be delivered by Issuer to Dealer no
later than 12:00 noon (local time in New York City) on the relevant Settlement
Date.

 

 

 

Number of Shares to be Delivered:

 

In respect of any Exercise Date, subject to the last sentence of Section 9.5 of
the Equity Definitions, the product of (i) the Number of Warrants exercised or
deemed exercised on such Exercise Date, (ii) the Warrant Entitlement and
(iii) (A) the excess of the VWAP Price on the Valuation Date occurring on such
Exercise Date over the Strike Price (or, if no such excess, zero) divided by
(B) such VWAP Price.

 

 

 

VWAP Price:

 

For any Valuation Date, the volume weighted average price per Share on the
Exchange for the regular trading session (including any extensions thereof) of
the Exchange on such Valuation Date (without regard to pre-open or after hours
trading outside of such regular trading session), as published by Bloomberg at
4:15 p.m. New York City time (or 15 minutes following the end of any extension
of the regular trading session) on such Valuation Date, on Bloomberg
page “RTEC.UQ <Equity> AQR” (or any successor thereto) (or if such published
volume weighted average price is unavailable or is manifestly incorrect, the
market value of one Share on such Valuation Date, as determined by the
Calculation Agent using a volume weighted method).

 

 

 

Other Applicable Provisions:

 

The provisions of Sections 9.1(c), 9.8, 9.9, 9.10, 9.11 (except that the
Representation and Agreement contained in Section 9.11 of the Equity Definitions
shall be modified by excluding any representations therein relating to
restrictions, obligations, limitations or requirements arising under applicable
securities laws as a result of the fact that Seller is the Issuer of the Shares)
and 9.12 of the Equity Definitions will be applicable, as if “Physical
Settlement” applied to the Transaction.

 

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Adjustments:

 

 

 

 

 

In respect of any Component:

 

 

 

 

 

Method of Adjustment:

 

Calculation Agent Adjustment; provided that in respect of an Extraordinary
Dividend, “Calculation Agent Adjustment” shall be as described in the provision
below.

 

 

 

Extraordinary Dividend:

 

Any cash dividend or distribution on the Shares with an ex dividend date
occurring on or after the Trade Date and on or prior to the date on which Issuer
satisfies all of its delivery obligations hereunder that exceeds the Ordinary
Dividend Amount for such dividend or distribution.

 

 

 

Ordinary Dividend Amount:

 

USD 0.00.

 

 

 

Calculation Agent Adjustment for Extraordinary Dividend:

 

If an ex-dividend date for an Extraordinary Dividend occurs, then the
Calculation Agent will make adjustments to the Strike Price, the Number of
Warrants, the Warrant Entitlement and/or any other variable relevant to the
exercise, settlement, payment or other terms of the Transaction as it determines
appropriate to account for the economic effect on the Transaction of such
Extraordinary Dividend.

 

 

 

Extraordinary Events:

 

 

 

 

 

Consequences of Merger Events:

 

 

 

 

 

(a) Share-for-Share:

 

Modified Calculation Agent Adjustment

 

 

 

(b) Share-for-Other:

 

Cancellation and Payment (Calculation Agent Determination)

 

 

 

(c) Share-for-Combined:

 

Cancellation and Payment (Calculation Agent Determination), provided that the
Calculation Agent may elect Component Adjustment

 

 

 

Tender Offer:

 

Applicable

 

 

 

Consequences of Tender Offers:

 

 

 

 

 

(a) Share-for-Share:

 

Modified Calculation Agent Adjustment

 

 

 

(b) Share-for-Other:

 

Modified Calculation Agent Adjustment

 

 

 

(c) Share-for-Combined:

 

Modified Calculation Agent Adjustment

 

 

 

New Shares:

 

In the definition of New Shares in Section 12.1(i) of the Equity Definitions,
the text in clause (i) shall be deleted in its entirety and replaced with
“publicly quoted, traded or listed on any of the New York Stock Exchange, the
NASDAQ Global Select Market or the NASDAQ Global Market (or their respective
successors)”.

 

 

 

Modified Calculation Agent Adjustment:

 

With respect to any Merger Event to which Modified Calculation Agent Adjustment
applies, as a condition precedent to the adjustments contemplated in
Section 12.2(e)(i) of the Equity Definitions, Dealer, the Issuer

 

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of the Affected Shares and the entity that will be the Issuer of the New Shares
shall, prior to the Merger Date, have entered into such documentation containing
representations, warranties and agreements relating to securities law and other
issues as Dealer has determined, in its reasonable discretion, to be reasonably
necessary or appropriate to allow Dealer to continue as a party to the
Transaction, as adjusted under Section 12.2(e)(i) of the Equity Definitions, and
to preserve its hedging or hedge unwind activities in connection with the
Transaction in a manner compliant with applicable legal, regulatory or
self-regulatory requirements, or with related policies and procedures applicable
to Dealer, and if such conditions are not met or if the Calculation Agent
determines that no adjustment that it could make under Section 12.2(e)(i) of the
Equity Definitions will produce a commercially reasonable result, then the
consequences set forth in Section 12.2(e)(ii) of the Equity Definitions shall
apply.

 

 

 

Reference Markets:

 

For the avoidance of doubt, and without limiting the generality of the foregoing
provisions, any adjustment effected by the Calculation Agent pursuant to
Section 12.2(e) and/or Section 12.3(d) of the Equity Definitions may be
determined by reference to the adjustment(s) made in respect of Merger Events or
Tender Offers, as the case may be, in the convertible bond market.

 

 

 

Nationalization, Insolvency or Delisting:

 

Cancellation and Payment (Calculation Agent Determination); provided that in
addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it
shall also constitute a Delisting if the Exchange is located in the United
States and the Shares are not immediately re-listed, re-traded or re-quoted on
any of the New York Stock Exchange, The NASDAQ Global Select Market or The
NASDAQ Global Market (or their respective successors); if the Shares are
immediately re-listed, re-traded or re-quoted on any such exchange or quotation
system, such exchange or quotation system shall thereafter be deemed to be the
Exchange.

 

 

 

Additional Disruption Events:

 

 

 

 

 

(a) Change in Law:

 

Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions is
hereby amended by replacing the phrase “the interpretation” in the third line
thereof with the phrase “, or public announcement of, the formal or informal
interpretation”.

 

 

 

(b) Insolvency Filing:

 

Applicable

 

 

 

(c) Hedging Disruption:

 

Applicable

 

 

 

(d) Increased Cost of Hedging:

 

Applicable

 

 

 

(e) Loss of Stock Borrow:

 

Applicable

 

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Maximum Stock Loan Rate:

 

1.0 % per annum

 

 

 

(f) Increased Cost of Stock Borrow:

 

Applicable

 

 

 

Initial Stock Loan Rate:

 

0.25 % per annum

 

 

 

Hedging Party:

 

Buyer

 

 

 

Determining Party:

 

Buyer

 

 

 

Non-Reliance:

 

Applicable

 

 

 

Agreements and Acknowledgments Regarding Hedging Activities:

 

Applicable

 

 

 

Additional Acknowledgments:

 

Applicable

 

 

 

3. Calculation Agent:

 

Dealer.

 

 

 

4. Account Details:

 

 

 

 

 

Dealer Payment Instructions:

 

 

 

 

 

SWIFT: XXXXXXXXX

Bank Routing: XXXXXXXXX

Account Name: Credit Suisse International

Account No.: XXXXXXXXX

 

 

 

Issuer Payment Instructions:

 

To be provided by Issuer.

 

 

 

5. Offices:

 

 

 

The Office of Dealer for the Transaction is:

 

 

 

Credit Suisse International

 

 

One Cabot Square

 

 

London E14 4QJ

 

 

England

 

 

 

 

 

The Office of Issuer for the Transaction is:

 

Inapplicable, Issuer is not a Multibranch Party.

 

 

 

6.  Notices: For purposes of this Confirmation:

 

(a)        Address for notices or communications to Issuer:

 

 

 

To:

 

Rudolph Technologies, Inc.

 

 

One Rudolph Road

 

 

P.O. Box 1000

 

 

Flanders, New Jersey 07836

Attn:

 

Robert A. Koch

Telephone:

 

(973) 448-4487

Facsimile:

 

(973) 691-1435

Email:

 

robert.koch@rudolphtech.com

 

 

 

(b)        Address for notices or communications to Dealer:

 

 

 

To:

 

Credit Suisse Securities (USA) LLC

 

 

Eleven Madison Avenue

 

 

New York, NY 10010-3629

Attn:

 

Steve Paek

Telephone:

 

(212) 325-3081

Facsimile:

 

(917) 326-8603

 

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Email:

 

steve.paek@credit-suisse.com

 

7.     Representations, Warranties and Agreements:

 

(a)           In addition to the representations and warranties in the Agreement
and those contained elsewhere herein, Issuer represents and warrants to and for
the benefit of, and agrees with, Dealer as follows:

 

(i)            On the Trade Date, (A) none of Issuer and its officers and
directors is aware of any material nonpublic information regarding Issuer or the
Shares and (B) all reports and other documents filed by Issuer with the
Securities and Exchange Commission pursuant to the Exchange Act when considered
as a whole (with the more recent such reports and documents deemed to amend
inconsistent statements contained in any earlier such reports and documents), do
not contain any untrue statement of a material fact or any omission of a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances in which they were made, not
misleading.

 

(ii)           Without limiting the generality of Section 13.1 of the Equity
Definitions, Issuer acknowledges that Dealer is not making any representations
or warranties or taking any position or expressing any view with respect to the
treatment of the Transaction under any accounting standards including ASC Topic
260, Earnings Per Share, ASC Topic 815, Derivatives and Hedging, or ASC Topic
480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and
Hedging — Contracts in Entity’s Own Equity (or any successor issue statements)
or under FASB’s Liabilities & Equity Project.

 

(iii)          The Shares of Issuer initially issuable upon exercise of the
Warrant (the “Warrant Shares”) have been reserved for issuance by all required
corporate action of Issuer.  The Warrant Shares have been duly authorized and,
when delivered against payment therefor (which may include Net Share Settlement
in lieu of cash) and otherwise as contemplated by the terms of the Warrant
following the exercise of the Warrant in accordance with the terms and
conditions of the Warrant, will be validly issued, fully-paid and
non-assessable, and the issuance of the Warrant Shares will not be subject to
any preemptive or similar rights. Issuer represents, warrants and agrees that
neither Dealer’s entry into this Confirmation nor Dealer’s right to acquire
Shares hereunder shall result in or contribute to the implementation, exercise
or triggering, howsoever described, of any third party rights under any
stockholder rights or similar plan to which Issuer is now or may in the future
become a party (any such agreement, an “Issuer Agreement”). Issuer further
represents, warrants and agrees that Issuer and Issuer’ Board of Directors shall
interpret all Issuer Agreements accordingly.

 

(iv)          Issuer is not entering into this Confirmation to create actual or
apparent trading activity in the Shares (or any security convertible into or
exchangeable for Shares) or to raise or depress or otherwise manipulate the
price of the Shares (or any security convertible into or exchangeable for
Shares) or otherwise in violation of the Exchange Act.

 

(v)           Issuer is not, and after giving effect to the transactions
contemplated hereby will not be, required to register as an “investment company”
as such term is defined in the Investment Company Act of 1940, as amended.

 

(vi)          On the Trade Date and the Premium Payment Date (A) the assets of
Issuer at their fair valuation exceed the liabilities of Issuer, including
contingent liabilities, (B) the capital of Issuer is adequate to conduct the
business of Issuer and (C) Issuer has the ability to pay its debts and
obligations as such debts mature and does not intend to, or does not believe
that it will, incur debt beyond its ability to pay as such debts mature.

 

(vii)         Issuer shall not take any action to decrease the number of
Available Shares below the Capped Number (each as defined below).

 

(viii)        The representations and warranties of Issuer set forth in
Section 3 of the Agreement and Section 2 of the Purchase Agreement dated as of
the Trade Date between Issuer and Credit Suisse Securities (USA) LLC, as
representative of the initial purchasers party thereto

 

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are true and correct as of the Trade Date and the Effective Date and are hereby
deemed to be repeated to Dealer as if set forth herein.

 

(ix)           Issuer understands no obligations of Dealer to it hereunder will
be entitled to the benefit of deposit insurance and that such obligations will
not be guaranteed by any affiliate of Dealer or any governmental agency.

 

(x)            (A) During the period starting on the first Expiration Date and
ending on the last Expiration Date (the “Settlement Period”), the Shares or
securities that are convertible into, or exchangeable or exercisable for Shares,
are not, and shall not be, subject to a “restricted period,” as such term is
defined in Regulation M under the Exchange Act (“Regulation M”) and (B) Issuer
shall not engage in any “distribution,” as such term is defined in Regulation M,
other than a distribution meeting the requirements of the exceptions set forth
in sections 101(b)(10) and 102(b)(7) of Regulation M, until the second Exchange
Business Day immediately following the Settlement Period.

 

(xi)           During the Settlement Period, neither Issuer nor any “affiliate”
or “affiliated purchaser” (each as defined in Rule 10b-18 of the Exchange Act
(“Rule 10b-18”)) shall directly or indirectly (including, without limitation, by
means of any cash-settled or other derivative instrument) purchase, offer to
purchase, place any bid or limit order that would effect a purchase of, or
commence any tender offer relating to, any Shares (or an equivalent interest,
including a unit of beneficial interest in a trust or limited partnership or a
depository share) or any security convertible into or exchangeable or
exercisable for Shares, except through Dealer.

 

(b)           Each of Dealer and Issuer agrees and represents that it is an
“eligible contract participant” as defined in Section 1a(12) of the U.S.
Commodity Exchange Act, as amended.

 

(c)           Each of Dealer and Issuer acknowledges that the offer and sale of
the Transaction to it is intended to be exempt from registration under the
Securities Act of 1933, as amended (the “Securities Act”), by virtue of
Section 4(2) thereof.  Accordingly, Dealer represents and warrants to Issuer
that (i) it has the financial ability to bear the economic risk of its
investment in the Transaction and is able to bear a total loss of its investment
and its investments in and liabilities in respect of the Transaction, which it
understands are not readily marketable, are not disproportionate to its net
worth, and it is able to bear any loss in connection with the Transaction,
including the loss of its entire investment in the Transaction, (ii) it is an
“accredited investor” as that term is defined in Regulation D as promulgated
under the Securities Act, (iii) it is entering into the Transaction for its own
account without a view to the distribution or resale thereof, (iv) the
assignment, transfer or other disposition of the Transaction has not been and
will not be registered under the Securities Act and is restricted under this
Confirmation, the Securities Act and state securities laws, (v) its financial
condition is such that it has no need for liquidity with respect to its
investment in the Transaction and no need to dispose of any portion thereof to
satisfy any existing or contemplated undertaking or indebtedness and is capable
of assessing the merits of and understanding (on its own behalf or through
independent professional advice), and understands and accepts, the terms,
conditions and risks of the Transaction.

 

(d)           Each of Dealer and Issuer agrees and acknowledges that Dealer is a
“financial institution,” “swap participant” and “financial participant” within
the meaning of Sections 101(22), 101(53C) and 101(22A) of Title 11 of the United
States Code (the “Bankruptcy Code”).  The parties hereto further agree and
acknowledge (A) that this Confirmation is (i) a “securities contract,” as such
term is defined in Section 741(7) of the Bankruptcy Code, with respect to which
each payment and delivery hereunder is a “settlement payment,” as such term is
defined in Section 741(8) of the Bankruptcy Code, and (ii) a “swap agreement,”
as such term is defined in Section 101(53B) of the Bankruptcy Code, with respect
to which each payment and delivery hereunder is a “transfer,” as such term is
defined in Section 101(54) of the Bankruptcy Code, and (B) that Dealer is
entitled to the protections afforded by, among other sections, Sections
362(b)(6), 362(b)(17), 546(e), 546(g), 555 and 560 of the Bankruptcy Code.

 

(e)           Each party acknowledges and agrees to be bound by the Conduct
Rules of the National Association of Securities Dealers, Inc. applicable to
transactions in options, and further agrees not to violate the position and
exercise limits set forth therein.

 

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(f)            Prior to the Trade Date, Issuer shall deliver to Dealer a
resolution of Issuer’s board of directors authorizing the Transaction and such
other certificate or certificates as Dealer shall reasonably request.

 

(g)           Issuer shall deliver to Dealer an opinion of counsel, dated as of
the Trade Date and reasonably acceptable to Dealer in form and substance, with
respect to the matters set forth in Section 3(a) of the Agreement.

 

8.  Other Provisions:

 

(a)           Alternative Calculations and Payment on Early Termination and on
Certain Extraordinary Events.  If Issuer shall owe Buyer any amount pursuant to
Sections 12.2, 12.3, 12.6, 12.7 or 12.9 of the Equity Definitions or pursuant to
Section 6(d)(ii) of the Agreement (a “Payment Obligation”), Issuer shall have
the right, in its sole discretion, to satisfy any such Payment Obligation by the
Share Termination Alternative (as defined below) by giving irrevocable
telephonic notice to Buyer, confirmed in writing within one Scheduled Trading
Day, between the hours of 9:00 A.M. and 4:00 P.M. New York City time on the
Merger Date, Tender Offer Date, Announcement Date, Early Termination Date or
date of cancellation or termination in respect of an Additional Disruption
Event, as applicable (“Notice of Share Termination”); provided that if Issuer
does not elect to satisfy its Payment Obligation by the Share Termination
Alternative, Buyer shall have the right, in its sole discretion, to elect to
require Issuer to satisfy its Payment Obligation by the Share Termination
Alternative, notwithstanding Issuer’s failure to elect or election to the
contrary; and provided further that Issuer shall not have the right to so elect
(but, for the avoidance of doubt, Buyer shall have the right to so elect) in the
event of (i) an Insolvency, a Nationalization, a Tender Offer or a Merger Event,
in each case, in which the consideration or proceeds to be paid to holders of
Shares consists solely of cash or (ii) an Event of Default in which Issuer is
the Defaulting Party or a Termination Event in which Issuer is the Affected
Party, which Event of Default or Termination Event resulted from an event or
events within Issuer’s control.  Upon such Notice of Share Termination, the
following provisions shall apply on the Scheduled Trading Day immediately
following the Merger Date, the Tender Offer Date, Announcement Date, Early
Termination Date or date of cancellation or termination in respect of an
Additional Disruption Event, as applicable:

 

Share Termination Alternative:                          Applicable and means
that Issuer shall deliver to Dealer the Share Termination Delivery Property on
the date on which the Payment Obligation would otherwise be due pursuant to
Section 12.7 or 12.9 of the Equity Definitions or Section 6(d)(ii) of the
Agreement, as applicable (the “Share Termination Payment Date”), in satisfaction
of the Payment Obligation.

 

Share Termination Delivery

 

Property:                                                                                                                                           
A number of Share Termination Delivery Units, as calculated by the Calculation
Agent, equal to the Payment Obligation divided by the Share Termination Unit
Price.  The Calculation Agent shall adjust the Share Termination Delivery
Property by replacing any fractional portion of the aggregate amount of a
security therein with an amount of cash equal to the value of such fractional
security based on the values used to calculate the Share Termination Unit Price.

 

Share Termination Unit Price:                                 The value of
property contained in one Share Termination Delivery Unit on the date such Share
Termination Delivery Units are to be delivered as Share Termination Delivery
Property, as determined by the Calculation Agent in its discretion by
commercially reasonable means and notified by the Calculation Agent to Issuer at
the time of notification of the Payment Obligation.

 

Share Termination Delivery Unit:              In the case of a Termination
Event, Event of Default, Delisting or Additional Disruption Event, one Share or,
in the case of an Insolvency, Nationalization, Merger Event or Tender Offer, a
unit consisting of the number or amount of each type of property received by a
holder of one Share (without consideration of any requirement to

 

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pay cash or other consideration in lieu of fractional amounts of any securities)
in such Insolvency, Nationalization, Merger Event or Tender Offer.  If such
Insolvency, Nationalization, Merger Event or Tender Offer involves a choice of
consideration to be received by holders, such holder shall be deemed to have
elected to receive the maximum possible amount of cash.

 

Failure to
Deliver:                                                                                                 
Applicable

 

Other applicable provisions:                                          If Share
Termination Alternative is applicable, the provisions of Sections 9.8, 9.9,
9.10, 9.11 (except that the Representation and Agreement contained in
Section 9.11 of the Equity Definitions shall be modified by excluding any
representations therein relating to restrictions, obligations, limitations or
requirements under applicable securities laws as a result of the fact that
Seller is the Issuer of the Shares) and 9.12 of the Equity Definitions will be
applicable as if “Physical Settlement” applied to the Transaction, except that
all references to “Shares” shall be read as references to “Share Termination
Delivery Units”.  If, in the reasonable judgment of Dealer, for any reason, any
securities comprising the Share Termination Delivery Units deliverable pursuant
to this Section 8(a) would not be immediately freely transferable by Dealer
under Rule 144 under the Securities Act, then Dealer may elect to either
(x) accept delivery of such securities notwithstanding any restriction on
transfer or (y) have the provisions set forth in Section 8(b) below apply.

 

(b)           Registration/Private Placement Procedures.  (i)  With respect to
the Transaction, the following provisions shall apply to the extent provided for
above opposite the caption “Net Share Settlement” in Section 2 or in paragraph
(a) of this Section 8.  If so applicable, then, at the election of Issuer by
notice to Buyer within one Exchange Business Day after the relevant delivery
obligation arises,  but in any event at least one Exchange Business Day prior to
the date on which such delivery obligation is due, either (A) all Shares or
Share Termination Delivery Units, as the case may be, delivered by Issuer to
Buyer shall be, at the time of such delivery, covered by an effective
registration statement of Issuer for immediate resale by Buyer (such
registration statement and the corresponding prospectus (the “Prospectus”)
(including, without limitation, any sections describing the plan of
distribution) in form and content commercially reasonably satisfactory to Buyer)
or (B) Issuer shall deliver additional Shares or Share Termination Delivery
Units, as the case may be, so that the value of such Shares or Share Termination
Delivery Units, as determined by the Calculation Agent to reflect an appropriate
liquidity discount, equals the value of the number of Shares or Share
Termination Delivery Units that would otherwise be deliverable if such Shares or
Share Termination Delivery Units were freely tradeable (without prospectus
delivery) upon receipt by Buyer (such value, the “Freely Tradeable Value”);
provided that, if requested by Dealer, Issuer shall make the election described
in this clause (B) with respect to Shares delivered on all Settlement Dates no
later than one Exchange Business Day prior to the first Expiration Date, and the
applicable procedures described below shall apply to all Shares delivered on the
Settlement Dates on an aggregate basis.  (For the avoidance of doubt, as used in
this paragraph (b) only, the term “Issuer” shall mean the issuer of the relevant
securities, as the context shall require.)

 

(ii)           If Issuer makes the election described in clause (b)(i)(A) above:

 

(A)          Buyer (or an affiliate of Buyer designated by Buyer) shall be
afforded a reasonable opportunity to conduct a due diligence investigation with
respect to Issuer that is customary in scope for underwritten offerings of
equity securities and that yields results that are commercially reasonably
satisfactory to Buyer or such affiliate, as the case may be, in its discretion;
and

 

(B)           Buyer (or an affiliate of Buyer designated by Buyer) and Issuer
shall enter into an agreement (a “Registration Agreement”) on commercially
reasonable terms in connection with the public resale of such Shares or Share
Termination Delivery Units, as the case may be, by Buyer or such affiliate
substantially similar to underwriting agreements customary for

 

12

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underwritten offerings of equity securities, in form and substance commercially
reasonably satisfactory to Buyer or such affiliate and Issuer, which
Registration Agreement shall include, without limitation, provisions
substantially similar to those contained in such underwriting agreements
relating to the indemnification of, and contribution in connection with the
liability of, Buyer and its affiliates and Issuer, shall provide for the payment
by Issuer of all expenses in connection with such resale, including all
registration costs and all fees and expenses of counsel for Buyer, and shall
provide for the delivery of accountants’ “comfort letters” to Buyer or such
affiliate with respect to the financial statements and certain financial
information contained in or incorporated by reference into the Prospectus.

 

(iii)          If Issuer makes the election described in clause (b)(i)(B) above:

 

(A)          Buyer (or an affiliate of Buyer designated by Buyer) and any
potential institutional purchaser of any such Shares or Share Termination
Delivery Units, as the case may be, from Buyer or such affiliate identified by
Buyer shall be afforded a commercially reasonable opportunity to conduct a due
diligence investigation in compliance with applicable law with respect to Issuer
customary in scope for private placements of equity securities (including,
without limitation, the right to have made available to them for inspection all
financial and other records, pertinent corporate documents and other information
reasonably requested by them), subject to execution by such recipients of
customary confidentiality agreements reasonably acceptable to Issuer;

 

(B)           Buyer (or an affiliate of Buyer designated by Buyer) and Issuer
shall enter into an agreement (a “Private Placement Agreement”) on commercially
reasonable terms in connection with the private placement of such Shares or
Share Termination Delivery Units, as the case may be, by Issuer to Buyer or such
affiliate and the private resale of such shares by Buyer or such affiliate,
substantially similar to private placement purchase agreements customary for
private placements of equity securities, in form and substance commercially
reasonably satisfactory to Buyer and Issuer, which Private Placement Agreement
shall include, without limitation, provisions substantially similar to those
contained in such private placement purchase agreements relating to the
indemnification of, and contribution in connection with the liability of, Buyer
and its affiliates and Issuer, shall provide for the payment by Issuer of all
expenses in connection with such resale, including all fees and expenses of
counsel for Buyer, shall contain representations, warranties and agreements of
Issuer reasonably necessary or advisable to establish and maintain the
availability of an exemption from the registration requirements of the
Securities Act for such resales, and shall use best efforts to provide for the
delivery of accountants’ “comfort letters” to Buyer or such affiliate with
respect to the financial statements and certain financial information contained
in or incorporated by reference into the offering memorandum prepared for the
resale of such Shares; and

 

(C)           Issuer agrees that any Shares or Share Termination Delivery Units
so delivered to Dealer, (i) may be transferred by and among Dealer and its
affiliates, and Issuer shall effect such transfer without any further action by
Dealer and (ii) after the minimum “holding period” within the meaning of
Rule 144(d) under the Securities Act has elapsed with respect to such Shares or
any securities issued by Issuer comprising such Share Termination Delivery
Units, Issuer shall promptly remove, or cause the transfer agent for such Shares
or securities to remove, any legends referring to any such restrictions or
requirements from such Shares or securities upon delivery by Dealer (or such
affiliate of Dealer) to Issuer or such transfer agent of seller’s and broker’s
representation letters customarily delivered by Dealer in connection with
resales of restricted securities pursuant to Rule 144 under the Securities Act,
without any further requirement for the delivery of any certificate, consent,
agreement, opinion of counsel, notice or any other document, any transfer tax
stamps or payment of any other amount or any other action by Dealer (or such
affiliate of Dealer).

 

(D)          Issuer shall not take, or cause to be taken, any action that would
make unavailable either the exemption pursuant to Section 4(2) of the Securities
Act for the sale by Issuer to Dealer (or any affiliate designated by Dealer) of
the Shares or Share Termination Delivery Units, as the case may be, or the
exemption pursuant to Section 4(1) or Section 4(3) of

 

13

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the Securities Act for resales of the Shares or Share Termination Delivery
Units, as the case may be, by Dealer (or any such affiliate of Dealer).

 

(c)           Make-whole Shares. If Issuer makes the election described in
clause (i)(B) of paragraph (b) of this Section 8, then Dealer or its affiliate
may sell (which sale shall be made in a commercially reasonable manner) such
Shares or Share Termination Delivery Units, as the case may be, during a period
(the “Resale Period”) commencing on the Exchange Business Day following delivery
of such Shares or Share Termination Delivery Units, as the case may be, and
ending on the Exchange Business Day on which Dealer completes the sale of all
such Shares or Share Termination Delivery Units, as the case may be, or a
sufficient number of Shares or Share Termination Delivery Units, as the case may
be, so that the realized net proceeds of such sales exceed the Freely Tradeable
Value.  If any of such delivered Shares or Share Termination Delivery Units
remain after such realized net proceeds exceed the Freely Tradeable Value,
Dealer shall return such remaining Shares or Share Termination Delivery Units to
Issuer.  If the Freely Tradeable Value exceeds the realized net proceeds from
such resale, Issuer shall transfer to Dealer by the open of the regular trading
session on the Exchange on the Exchange Trading Day immediately following the
last day of the Resale Period the amount of such excess (the “Additional
Amount”) in cash or in a number of additional Shares (“Make-whole Shares”) in an
amount that, based on the Relevant Price on the last day of the Resale Period
(as if such day was the “Valuation Date” for purposes of computing such Relevant
Price), has a dollar value equal to the Additional Amount.  The Resale Period
shall continue to enable the sale of the Make-whole Shares in the manner
contemplated by this Section 8(c).  This provision shall be applied successively
until the Additional Amount is equal to zero, subject to Section 8(e).

 

(d)           Beneficial Ownership. Notwithstanding anything to the contrary in
the Agreement or this Confirmation, in no event shall Buyer be entitled to
receive, or shall be deemed to receive, any Shares if, immediately upon giving
effect to such receipt of such Shares, (i) the “beneficial ownership” (within
the meaning of Section 13 of the Exchange Act and the rules promulgated
thereunder) of Shares by Buyer or any affiliate of Buyer subject to aggregation
with Buyer under such Section 13 and rules or any “group”, as such term is used
in such Section 13 and rules, of which Buyer or any such affiliate of Buyer is a
member or may be deemed to be a member (collectively, “Buyer Group”) would be
equal to or greater than 8% or more of the outstanding Shares or (ii) Buyer,
Buyer Group or any person whose ownership position would be aggregated with that
of Buyer or Buyer Group (Buyer, Buyer Group or any such person, a “Buyer
Person”) under Section 203 of the Delaware General Corporation Law (the “DGCL
Takeover Statute”) or any state or federal bank holding company or banking laws,
or other federal, state or local regulations or regulatory orders applicable to
ownership of Shares (“Applicable Laws”), owns, beneficially owns, constructively
owns, controls, holds the power to vote or otherwise meets a relevant definition
of ownership in excess of a number of Shares equal to (x) the number of Shares
that would give rise to reporting or registration obligations or other
requirements (including obtaining prior approval by a state or federal
regulator) of a Buyer Person under Applicable Laws (including, without
limitation, “interested stockholder” or “acquiring person” status under the DGCL
Takeover Statute) and with respect to which such requirements have not been met
or the relevant approval has not been received minus (y) 2% of the number of
Shares outstanding on the date of determination (either such condition described
in clause (i) or (ii), an “Excess Ownership Position”).  If any delivery owed to
Buyer hereunder is not made, in whole or in part, as a result of this
provision, Issuer’s obligation to make such delivery shall not be extinguished
and Issuer shall make such delivery as promptly as practicable after, but in no
event later than one Exchange Business Day after, Buyer gives notice to Issuer
that such delivery would not result in the existence of an Excess Ownership
Position.

 

(e)           Limitations on Settlement by Issuer.  Notwithstanding anything
herein or in the Agreement to the contrary, in no event shall Issuer be required
to deliver Shares in connection with the Transaction in excess of 7,724,100
(subject to adjustment from time to time in accordance with the provisions
hereof as a result of actions of Issuer or events within Issuer’s control) (the
“Capped Number”).  Issuer represents and warrants to Dealer (which
representation and warranty shall be deemed to be repeated on each day that the
Transaction is outstanding) that the Capped Number is equal to or less than the
number of authorized but unissued Shares of the Issuer that are not reserved for
future issuance in connection with transactions in the Shares (other than the
Transaction) on the date of the determination of the Capped Number (such Shares,
the “Available Shares”).  In the event Issuer shall not have delivered the full
number of Shares otherwise deliverable as a result of this Section 8(e) (the
resulting deficit, the

 

14

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“Deficit Shares”), Issuer shall be continually obligated to deliver, from time
to time until the full number of Deficit Shares have been delivered pursuant to
this paragraph, Shares when, and to the extent, that (i) Shares are repurchased,
acquired or otherwise received by Issuer or any of its subsidiaries after the
Trade Date (whether or not in exchange for cash, fair value or any other
consideration), (ii) authorized and unissued Shares reserved for issuance in
respect of other transactions prior to such date which prior to the relevant
date become no longer so reserved and (iii) Issuer additionally authorizes any
unissued Shares that are not reserved for other transactions.  Issuer shall
immediately notify Dealer of the occurrence of any of the foregoing events
(including the number of Shares subject to clause (i), (ii) or (iii) and the
corresponding number of Shares to be delivered) and promptly deliver such Shares
thereafter.

 

(f)            Amendments to Equity Definitions.  The following amendments shall
be made to the Equity Definitions:

 

(i)            Section 11.2(a) of the Equity Definitions is hereby amended by
deleting the words “a diluting or concentrative” and replacing them with the
words “an”; and adding the phrase “or Warrants” at the end of the sentence.

 

(ii)           The first sentence of Section 11.2(c) of the Equity Definitions,
prior to clause (A) thereof, is hereby amended to read as follows: ‘(c) If
“Calculation Agent Adjustment” is specified as the Method of Adjustment in the
related Confirmation of a Share Option Transaction, then following the
announcement or occurrence of any Potential Adjustment Event, the Calculation
Agent will determine whether such Potential Adjustment Event has an effect on
the theoretical value of the relevant Shares or options on the Shares and, if
so, will (i) make appropriate adjustment(s), if any, to any one or more of:’
and, the portion of such sentence immediately preceding clause (ii) thereof is
hereby amended by deleting the words “diluting or concentrative” and the words
“(provided that no adjustments will be made to account solely for changes in
volatility, expected dividends, stock loan rate or liquidity relative to the
relevant Shares)” and replacing such latter phrase with the words “(and, for the
avoidance of doubt, adjustments may be made to account solely for changes in
volatility, expected dividends, stock loan rate or liquidity relative to the
relevant Shares)”;

 

(iii)          Section 11.2(e)(vii) of the Equity Definitions is hereby amended
by deleting the words “diluting or concentrative” and replacing them with
“material”;

 

(iv)          Section 12.9(b)(i) of the Equity Definitions is hereby amended by
(1) replacing “either party may elect” with “Dealer may elect” and (2) replacing
“notice to the other party” with “notice to Issuer” in the first sentence of
such section; and

 

(v)           Section 12.9(b)(v) of the Equity Definitions is hereby amended by
(A) adding the word “or” immediately before subsection “(B)” and deleting the
comma at the end of subsection (A); and (B)(1) deleting subsection (C) in its
entirety, (2) deleting the word “or” immediately preceding subsection (C) and
(3) replacing in the penultimate sentence the words “either party” with “the
Hedging Party” and (4) deleting clause (X) in the final sentence.

 

(g)           Additional Termination Events.  The occurrence of any of the
following shall constitute an Additional Termination Event with respect to which
the Transaction shall be the sole Affected Transaction and Issuer shall be the
sole Affected Party; provided that with respect to any Additional Termination
Event, Dealer may choose to treat part of the Transaction as the sole Affected
Transaction, and, upon the termination of the Affected Transaction, a
Transaction with terms identical to those set forth herein except with a Number
of Warrants equal to the unaffected number of Warrants shall be treated for all
purposes as the Transaction, which shall remain in full force and effect:

 

(i)            Buyer reasonably determines that it is advisable to terminate a
portion of the Transaction so that Buyer’s related hedging activities will
comply with applicable securities laws, rules or regulations or related policies
and procedures of Buyer (whether or not such requirements, policies or
procedures are imposed by law or have been voluntarily adopted by Buyer);

 

(ii)           a “person” or “group” within the meaning of Section 13(d) of the
Exchange Act, other than Issuer, Issuer’s subsidiaries and employee benefit
plans of Issuer’s and Issuer’s

 

15

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subsidiaries, has become the direct or indirect ultimate “beneficial owner,” as
defined in Rule 13d-3 under the Exchange Act, of Issuer’s common equity
representing more than 50% of the voting power of Issuer’s common equity;

 

(iii)          consummation of (A) any recapitalization, reclassification or
change of Shares (other than changes resulting from a subdivision or
combination) as a result of which Shares would be converted into, or exchanged
for, stock, other securities, other property or assets or (B) any share
exchange, consolidation or merger involving us pursuant to which Shares will be
converted into cash, securities or other property or any sale, lease or other
transfer in one transaction or a series of transactions of all or substantially
all of Issuer’s and Issuer’s subsidiaries’ consolidated assets, taken as a
whole, to any Person other than one of Issuer’s subsidiaries; other than a
transaction where the holders of all classes of Issuer’s common equity
immediately prior to such transaction that is a share exchange, consolidation or
merger (each such holder, a “pre-transaction holder”) own, directly or
indirectly, more than 50% of all classes of common equity of the continuing or
surviving corporation or transferee or the parent thereof immediately after such
event, so long as the proportion of the respective ownership of each
pre-transaction holder remains substantially the same relative to all other
pre-transaction holders;

 

(iv)          at any time Issuer’s Continuing Directors (as defined below) do
not constitute a majority of Issuer’s board of directors (or, if applicable, a
successor Person to Issuer);

 

(v) Issuer’s stockholders approve any plan or proposal for Issuer’s liquidation
or dissolution; or

 

(vi) Shares cease to be listed on any of The New York Stock Exchange, The NASDAQ
Global Select Market or The NASDAQ Global Market (or any of their respective
successors).

 

Notwithstanding the foregoing, a transaction set forth in clause (iii) above
will not constitute an Additional Termination Event if at least 90% of the
consideration paid for the Shares (excluding cash payments for fractional shares
and cash payments made pursuant to dissenters’ appraisal rights) in connection
with such transaction or transactions otherwise constituting an Additional
Termination Event under clause (iii) above consists of shares of common stock
listed on any of the New York Stock Exchange, the NASDAQ Global Select Market or
the NASDAQ Global Market (or any of their respective successors) (or will be so
listed when issued or exchanged in connection with such transaction or
transactions) (“Listed Shares”).

 

“Person” includes any syndicate or group that would be deemed to be a “person”
under Section 13(d)(3) of the Exchange Act.

 

“Continuing Directors” means (i) a director who either was a member of Issuer’s
board of directors on the date hereof or (ii) a director who becomes a member of
Issuer’s board of directors subsequent to the date hereof and whose election,
appointment or nomination for election by Issuer’s stockholders is duly approved
by a majority of the Continuing Directors on Issuer’s board of directors at the
time of such approval, either by a specific vote or by approval of the proxy
statement issued by Issuer on behalf of Issuer’s entire board of directors in
which such individual is named as nominee for director.

 

(h)           Extension of Settlement.  Dealer may divide any Component into
additional Components and designate the Expiration Date and the Number of
Warrants for each such Component if Dealer determines, in its reasonable
discretion, that such further division is necessary or advisable to preserve
Dealer’s hedging activity hereunder in light of existing liquidity conditions in
the cash market or stock loan market or to enable Dealer to effect purchases of
Shares in connection with its hedging activity hereunder in a manner that would,
if Dealer were Issuer or an affiliated purchaser of Issuer, be in compliance
with applicable legal and regulatory requirements.

 

(i)            Transfer and Assignment.  Buyer may transfer or assign its rights
and obligations hereunder and under the Agreement, in whole or in part, at any
time without the consent of Issuer; provided that at any time at which (i) an
Excess Ownership Position exists or (ii) a Hedging Disruption has occurred and
is continuing, if Buyer, in its discretion, is unable to effect a transfer or
assignment to a third party after

 

16

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using its commercially reasonable efforts on pricing terms reasonably acceptable
to Buyer such that an Excess Ownership Position or a Hedging Disruption, as the
case may be, no longer exists, Buyer may designate any Scheduled Trading Day as
an Early Termination Date with respect to a portion (the “Terminated Portion”)
of the Transaction, such that such Excess Ownership Position or Hedging
Disruption, as the case may be, no longer exists.  In the event that Buyer so
designates an Early Termination Date with respect to a portion of the
Transaction, a payment or delivery shall be made pursuant to Section 6 of the
Agreement and Section 8(a) of this Confirmation as if (i) an Early Termination
Date had been designated in respect of a Transaction having terms identical to
the Terminated Portion of the Transaction, (ii) Issuer shall be the sole
Affected Party with respect to such partial termination and (iii) such portion
of the Transaction shall be the only Terminated Transaction.

 

(j)            Equity Rights.  Buyer acknowledges and agrees that this
Confirmation is not intended to convey to it rights with respect to the
Transaction that are senior to the claims of common stockholders in the event of
Issuer’s bankruptcy.  For the avoidance of doubt, the parties agree that the
preceding sentence shall not apply at any time other than during Issuer’s
bankruptcy to any claim arising as a result of a breach by Issuer of any of its
obligations under this Confirmation or the Agreement.  For the avoidance of
doubt, the parties acknowledge that this Confirmation is not secured by any
collateral that would otherwise secure the obligations of Issuer herein under or
pursuant to any other agreement.

 

(k)           Netting and Set-off.

 

(i)            If on any date cash would otherwise be payable or Shares or other
property would otherwise be deliverable hereunder or pursuant to the Agreement
or pursuant to any other agreement between the parties by Issuer to Buyer and
cash would otherwise be payable or Shares or other property would otherwise be
deliverable hereunder or pursuant to the Agreement or pursuant to any other
agreement between the parties by Buyer to Issuer and the type of property
required to be paid or delivered by each such party on such date is the same,
then, on such date, each such party’s obligation to make such payment or
delivery will be automatically satisfied and discharged and, if the aggregate
amount that would otherwise have been payable or deliverable by one such party
exceeds the aggregate amount that would otherwise have been payable or
deliverable by the other such party, replaced by an obligation of the party by
whom the larger aggregate amount would have been payable or deliverable to pay
or deliver to the other party the excess of the larger aggregate amount over the
smaller aggregate amount.

 

(ii)           In addition to and without limiting any rights of set-off that a
party hereto may have as a matter of law, pursuant to contract or otherwise,
upon the occurrence of an Early Termination Date, Buyer shall have the right to
terminate, liquidate and otherwise close out the Transaction and to set off any
obligation or right that Buyer or any affiliate of Buyer may have to or against
Issuer hereunder or under the Agreement against any right or obligation Buyer or
any of its affiliates may have against or to Issuer, including without
limitation any right to receive a payment or delivery pursuant to any provision
of the Agreement or hereunder.  In the case of a set-off of any obligation to
release, deliver or pay assets against any right to receive assets of the same
type, such obligation and right shall be set off in kind.  In the case of a
set-off of any obligation to release, deliver or pay assets against any right to
receive assets of any other type, the value of each of such obligation and such
right shall be determined by the Calculation Agent and the result of such
set-off shall be that the net obligor shall pay or deliver to the other party an
amount of cash or assets, at the net obligor’s option, with a value (determined,
in the case of a delivery of assets, by the Calculation Agent) equal to that of
the net obligation.  In determining the value of any obligation to release or
deliver Shares or any right to receive Shares, the value at any time of such
obligation or right shall be determined by reference to the market value of the
Shares at such time, as determined by the Calculation Agent.  If an obligation
or right is unascertained at the time of any such set-off, the Calculation Agent
may in good faith estimate the amount or value of such obligation or right, in
which case set-off will be effected in respect of that estimate, and the
relevant party shall account to the other party at the time such obligation or
right is ascertained.

 

(iii)          Notwithstanding any provision of the Agreement (including without
limitation Section 6(f) thereof) and this Confirmation (including without
limitation this Section 8(k)) or any other agreement between the parties to the
contrary, (A) Issuer shall not net or set off its

 

17

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obligations under the Transaction against its rights against Buyer under any
other transaction or instrument; (B) Buyer may net and set off any rights of
Buyer against Issuer arising under the Transaction only against obligations of
Buyer to Issuer arising under any transaction or instrument if such transaction
or instrument does not convey rights to Buyer senior to the claims of common
stockholders in the event of Issuer’s bankruptcy and (C) in the event of
bankruptcy or liquidation of Issuer, neither party shall have the right to set
off any obligation that it may have to the other party under the Transaction
against any obligation such other party may have to it under the Agreement, this
Confirmation or any other agreement between the parties hereto, by operation of
law or otherwise.  Buyer will give notice to Issuer of any netting or set off
effected under this provision.

 

(l)            Effectiveness.  If, prior to the Effective Date, Buyer reasonably
determines that it is advisable to cancel the Transaction because of concerns
that Buyer’s related hedging activities could be viewed as not complying with
applicable securities laws, rules or regulations, the Transaction shall be
cancelled and shall not become effective, and neither party shall have any
obligation to the other party in respect of the Transaction.

 

(m)          Designation by Dealer.  Notwithstanding any other provision in this
Confirmation to the contrary requiring or allowing Dealer to purchase, sell,
receive or deliver any Shares or other securities to or from Issuer, Dealer may
designate any of its affiliates to purchase, sell, receive or deliver such
Shares or other securities and otherwise to perform Dealer’s obligations in
respect of the Transaction and any such designee may perform such obligations. 
Dealer shall be discharged of its obligations to Issuer to the extent of any
such performance.

 

(n)           Disclosure.  Effective from the date of commencement of
discussions concerning the Transaction, Issuer and each of its employees,
representatives, or other agents may disclose to any and all persons, without
limitation of any kind, the tax treatment and tax structure of the Transaction
and all materials of any kind (including opinions or other tax analyses) that
are provided to Issuer relating to such tax treatment and tax structure.

 

(o)   Counterparts. This Confirmation may be executed in several counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.

 

(p)           Waiver of Trial by Jury.  EACH OF ISSUER AND DEALER HEREBY
IRREVOCABLY WAIVES (ON ITS OWN BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, ON BEHALF OF ITS STOCKHOLDERS) ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE)
ARISING OUT OF OR RELATING TO THE TRANSACTION OR THE ACTIONS OF DEALER OR ITS
AFFILIATES OR ISSUER OR ITS AFFILIATES IN THE NEGOTIATION, PERFORMANCE OR
ENFORCEMENT HEREOF.

 

(q)           Submission to Jurisdiction. Each party hereby irrevocably and
unconditionally submits for itself and its property in any legal action or
proceeding by the other party against it relating to the Transaction to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the exclusive jurisdiction of the Supreme Court of the State of New
York, sitting in New York County, the courts of the United States of America for
the Southern District of New York, and appellate courts from any thereof.

 

(r)            Governing Law.  THIS CONFIRMATION SHALL BE GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO ITS CHOICE OF LAW DOCTRINE).

 

(s)           Role of Agent.   Credit Suisse Securities (USA) LLC, in its
capacity as Agent will be responsible for (A) effecting this Transaction,
(B) issuing all required confirmations and statements to Dealer and Issuer,
(C) maintaining books and records relating to this Transaction in accordance
with its standard practices and procedures and in accordance with applicable law
and (D) unless otherwise requested by Issuer, receiving, delivering, and
safeguarding Issuer’s funds and any securities in connection with this
Transaction, in accordance with its standard practices and procedures and in
accordance with applicable law.

 

18

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(i)            Agent is acting in connection with this Transaction solely in its
capacity as Agent for Dealer and Issuer pursuant to instructions from Dealer and
Issuer.  Agent shall have no responsibility or personal liability to Dealer or
Issuer arising from any failure by Dealer or Issuer to pay or perform any
obligations hereunder, or to monitor or enforce compliance by Dealer or Issuer
with any obligation hereunder, including, without limitation, any obligations to
maintain collateral.  Each of Dealer and Issuer agrees to proceed solely against
the other to collect or recover any securities or monies owing to it in
connection with or as a result of this Transaction.  Agent shall otherwise have
no liability in respect of this Transaction, except for its gross negligence or
willful misconduct in performing its duties as Agent.

 

(ii)           Any and all notices, demands, or communications of any kind
relating to this Transaction between Dealer and Issuer shall be transmitted
exclusively through Agent at the following address:

 

Credit Suisse Securities (USA) LLC
Eleven Madison Avenue
New York, NY 10010-3629

 

For payments and deliveries:
Facsimile No.: (212) 325 8175
Telephone No.: (212) 325 8678 / (212) 325 3213

 

For all other communications:
Facsimile No.: (212) 325 8173
Telephone No.: (212) 325 8676 / (212) 538 5306 / (212) 538 1193 / (212) 538 6886

 

(iii)          The date and time of the Transaction evidenced hereby will be
furnished by the Agent to Dealer and Issuer upon written request.

 

(iv)          The Agent will furnish to Issuer upon written request a statement
as to the source and amount of any remuneration received or to be received by
the Agent in connection with the Transaction evidenced hereby.

 

(v)           Dealer and Issuer each represents and agrees (A) that this
Transaction is not unsuitable for it in the light of such party’s financial
situation, investment objectives and needs and (B) that it is entering into this
Transaction in reliance upon such tax, accounting, regulatory, legal and
financial advice as it deems necessary and not upon any view expressed by the
other or the Agent.

 

(vi)          Dealer is regulated by The Securities and Futures Authority and
has entered into this Transaction as principal. The time at which this
Transaction was executed will be notified to Issuer (through the Agent) on
request.

 

19

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Issuer hereby agrees (a) to check this Confirmation carefully and immediately
upon receipt so that errors or discrepancies can be promptly identified and
rectified and (b) to confirm that the foregoing (in the exact form provided by
Dealer) correctly sets forth the terms of the agreement between Dealer and
Issuer with respect to the Transaction, by manually signing this Confirmation or
this page hereof as evidence of agreement to such terms and providing the other
information requested herein and immediately returning an executed copy to
Credit Suisse Securities (USA) LLC, Eleven Madison Avenue, New York, NY
10010-3629, Facsimile No. (212) 325-8173.

 

 

 

CREDIT SUISSE INTERNATIONAL

 

 

 

 

 

 

 

By:

/s/ Shui Wong

 

 

Name: Shui Wong

 

 

Title:   Authorized Signatory

 

 

 

 

By:

/s/ Joyce Lim

 

 

Name: Joyce Lim

 

 

Title:   Authorized Signatory

 

 

 

 

 

 

CREDIT SUISSE SECURITIES (USA) LLC,  AS AGENT FOR CREDIT SUISSE INTERNATIONAL

 

 

 

 

 

 

 

By:

/s/ Shui Wong

 

 

Name: Shui Wong

 

 

Title:   Vice President

 

Agreed and Accepted By:

 

RUDOLPH TECHNOLOGIES, INC.

 

By:

/s/ Paul F. McLaughlin

 

 

Name:  Paul F. McLaughlin

 

 

Title:   CEO & Chairman

 

 

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

 

Annex A

 

For each Component of the Transaction, the Number of Warrants and Expiration
Date is set forth below.

 

Component Number

 

Number of Warrants

 

Expiration Date

1.

 

64,367

 

10/13/2016

2.

 

64,3679

 

10/14/2016

3.

 

64,367

 

10/17/2016

4.

 

64,367

 

10/18/2016

5.

 

64,367

 

10/19/2016

6.

 

64,367

 

10/20/2016

7.

 

64,367

 

10/21/2016

8.

 

64,367

 

10/24/2016

9.

 

64,367

 

10/25/2016

10.

 

64,367

 

10/26/2016

11.

 

64,367

 

10/27/2016

12.

 

64,367

 

10/28/2016

13.

 

64,367

 

10/31/2016

14.

 

64,367

 

11/1/2016

15.

 

64,367

 

11/2/2016

16.

 

64,367

 

11/3/2016

17.

 

64,367

 

11/4/2016

18.

 

64,367

 

11/7/2016

19.

 

64,367

 

11/8/2016

20.

 

64,367

 

11/9/2016

21.

 

64,367

 

11/10/2016

22.

 

64,367

 

11/11/2016

23.

 

64,367

 

11/14/2016

24.

 

64,367

 

11/15/2016

25.

 

64,367

 

11/16/2016

26.

 

64,367

 

11/17/2016

27.

 

64,367

 

11/18/2016

28.

 

64,367

 

11/21/2016

29.

 

64,367

 

11/22/2016

30.

 

64,367

 

11/23/2016

31.

 

64,367

 

11/25/2016

32.

 

64,367

 

11/28/2016

33.

 

64,367

 

11/29/2016

34.

 

64,367

 

11/30/2016

35.

 

64,367

 

12/1/2016

36.

 

64,367

 

12/2/2016

37.

 

64,367

 

12/5/2016

38.

 

64,367

 

12/6/2016

39.

 

64,367

 

12/7/2016

40.

 

64,367

 

12/8/2016

41.

 

64,367

 

12/9/2016

42.

 

64,367

 

12/12/2016

43.

 

64,367

 

12/13/2016

44.

 

64,367

 

12/14/2016

45.

 

64,367

 

12/15/2016

46.

 

64,367

 

12/16/2016

47.

 

64,367

 

12/19/2016

48.

 

64,367

 

12/20/2016

49.

 

64,367

 

12/21/2016

50.

 

64,367

 

12/22/2016

51.

 

64,367

 

12/23/2016

 

2

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52.

 

64,367

 

12/27/2016

53.

 

64,367

 

12/28/2016

54.

 

64,367

 

12/29/2016

55.

 

64,367

 

12/30/2016

56.

 

64,367

 

1/3/2017

57.

 

64,367

 

1/4/2017

58.

 

64,367

 

1/5/2017

59.

 

64,367

 

1/6/2017

60.

 

64,397

 

1/9/2017

 

3

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