Document:

exv10w43

 

EXHIBIT 10.43

August 4, 2005

Jim Davis

Dear Jim:

This letter (the “Agreement”) sets forth the substance of the arrangements between you and Vitria
Technology, Inc. (the “Company”) in connection with your employment transition.

     1. Separation. Your last day of work with the Company and your employment
termination date was June 28, 2005 (the “Separation Date”).

     2. Accrued Salary And Paid Time Off. On the Separation Date, the Company paid you
all accrued salary, and all accrued and unused vacation earned through the Separation Date, subject
to standard payroll deductions and withholdings. You are entitled to these payments by law.

     3. Severance Benefits. Although the Company has no obligation to do so, if you sign
this Agreement and allow it to become effective, then the Company will pay you, as severance, the
amount of $125,000, subject to standard payroll deductions and withholdings. Additionally, the
Company will pay you an amount equal to 50% of your prorated target bonus amount based upon your
time employed ($25,000). Both of these amounts will be paid in a lump sum within ten (10) days
after the Effective Date (as defined in paragraph 14 below).

     4. Health Insurance. To the extent provided by the federal COBRA law or, if
applicable, state insurance laws, and by the Company’s current group health insurance policies, you
will be eligible to continue your group health insurance benefits at your own expense following the
Separation Date. Later, you may be able to convert to an individual policy through the provider of
the Company’s health insurance, if you wish. You will be provided with a separate notice
describing your rights and obligations under COBRA.

     5. Stock Options. Under the terms of your stock option agreement and the applicable
plan documents, vesting of your stock options will cease as of the Separation Date. Your right to
exercise any vested shares, and all other rights and obligations with respect to your stock
options(s), will be as set forth in your stock option agreement, grant notice and applicable plan
documents.

     6. Other Compensation Or Benefits. You acknowledge that, except as expressly
provided in this Agreement, you will not receive any additional compensation, severance, or
benefits after the Separation Date.

     7. Expense Reimbursements. Within ten (10) days of the Effective Date, you will be
paid the amount of $20,000 which you agree is payment in full for all business expenses you
incurred in connection with your employment or employment transition.

     8. Return Of Company Property. You represent, and the Company acknowledges, that to
its knowledge you have returned to the Company all Company documents (and all copies thereof) and
other Company property that you have had in your possession at any time, including, but not limited
to, Company files, notes, drawings, records, business plans and forecasts, financial information,
specifications, computer-recorded information, tangible property (including, but not limited to,
computers), credit cards, entry cards, identification badges, and keys; and, any materials of any
kind that contain or embody any proprietary or confidential information of the Company (and all
reproductions thereof).

     9. Proprietary Information Obligations. You acknowledge your continuing obligations
under your Proprietary Information and Inventions Agreement, a copy of which is attached hereto as
Exhibit A.

     10. Confidentiality. The provisions of this Agreement will be held in strictest
confidence by you and the Company and will not be publicized or disclosed in any manner whatsoever;
provided, however, that: (a) you may disclose this Agreement in confidence to your immediate
family; (b) the parties may disclose this Agreement in confidence to their respective attorneys,
accountants, auditors, tax preparers, and financial advisors; (c) the Company may disclose this
Agreement as necessary to fulfill standard or legally required corporate reporting or disclosure
requirements; and (d) the parties may disclose this Agreement insofar as such disclosure may be
necessary to enforce its terms or as otherwise required by law. In particular, and without
limitation, you agree not to disclose the terms of this Agreement to any current or former Company
employee.

     11. Nondisparagement. The parties agree not to disparage each other (which for the
Company includes its officers, directors, employees, shareholders, and agents) in any manner likely
to be harmful to its or their business, business reputation, or

 

 

personal reputation; provided that you will respond accurately and fully to any question,
inquiry or request for information when required by legal process.

     12. No Admissions. You understand and agree that the promises and payments in
consideration of this Agreement shall not be construed to be an admission of any liability or
obligation by the Company to you or to any other person, and that the Company makes no such
admission.

     13. Release of Claims. In exchange for the consideration under this Agreement to
which you would not otherwise be entitled, you hereby generally and completely release the Company
and its directors, officers, employees, shareholders, partners, agents, attorneys, predecessors,
successors, parent and subsidiary entities, insurers, affiliates, and assigns from any and all
claims, liabilities and obligations, both known and unknown, that arise out of or are in any way
related to events, acts, conduct, or omissions occurring at any time prior to and including the
date you sign this Agreement. This general release includes, but is not limited to: (a) all claims
arising out of or in any way related to your employment with the Company or the termination of that
employment; (b) all claims related to your compensation or benefits from the Company, including
salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits,
stock, stock options, or any other ownership interests in the Company; (c) all claims for breach of
contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing;
(d) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in
violation of public policy; and (e) all federal, state, and local statutory claims, including
claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under
the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of
1990, the federal Age Discrimination in Employment Act of 1967, as amended (“ADEA”), and the
California Fair Employment and Housing Act (as amended). Notwithstanding the above, nothing in
this Section 13 constitutes a waiver by you of any rights you have to be indemnified by the
Company, whether such rights arise under applicable law, the Company’s charter documents or any
agreement between you and the Company.

     14. ADEA Waiver. You acknowledge that you are knowingly and voluntarily waiving and
releasing any rights you may have under the ADEA (“ADEA Waiver”). You also acknowledge that the
consideration given for the ADEA Waiver is in addition to anything of value to which you were
already entitled. You further acknowledge that you have been advised by this writing, as required
by the ADEA, that: (a) your ADEA Waiver does not apply to any rights or claims that arise after
the date you sign this Agreement; (b) you should consult with an attorney prior to signing this
Agreement; (c) you have twenty-one (21) days to consider this Agreement (although you may choose to
voluntarily sign it sooner); (d) you have seven (7) days following the date you sign this Agreement
to revoke the ADEA Waiver (in a written revocation sent to me); and (e) the ADEA Waiver will not be
effective until the date upon which the revocation period has expired, which will be the eighth day
after you sign this Agreement (the “Effective Date”).

     15. Section 1542 Waiver. In granting the release herein, which includes claims
which may be unknown to you at present, you acknowledge that you have read and understand Section
1542 of the California Civil Code: “A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of executing the release, which if known
by him must have materially affected his settlement with the debtor.” You hereby expressly waive
and relinquish all rights and benefits under that section and any law or legal principle of similar
effect in any jurisdiction with respect to the releases granted herein, including but not limited
to the release of unknown and unsuspected claims granted in this Agreement.

     16. Miscellaneous. This Agreement, including Exhibit A, constitutes the complete,
final and exclusive embodiment of the entire agreement between you and the Company with regard to
its subject matter; provided that any indemnification agreement between you and the Company
referred to in Section 13 above shall remain in full force and effect pursuant to its terms. It is
entered into without reliance on any promise or representation, written or oral, other than those
expressly contained herein, and it supersedes any other such promises, warranties or
representations. This Agreement may not be modified or amended except in a writing signed by both
you and a duly authorized officer of the Company. This Agreement will bind the heirs, personal
representatives, successors and assigns of both you and the Company, and inure to the benefit of
both you and the Company, their heirs, successors and assigns. If any provision of this Agreement
is determined to be invalid or unenforceable, in whole or in part, this determination will not
affect any other provision of this Agreement and the provision in question will be modified so as
to be rendered enforceable. This Agreement will be deemed to have been entered into and will be
construed and enforced in accordance with the laws of the State of California as applied to
contracts made and to be performed entirely within California. Any ambiguity in this Agreement
shall not be construed against either party as the drafter. Any waiver of a breach of this
Agreement shall be in writing and shall not be deemed to be a waiver of any successive breach.
This Agreement may be executed in counterparts and facsimile signatures will suffice as original
signatures.

     If this Agreement is acceptable to you, please sign below and return the original to me.

     We wish you the best in your future endeavors.

Sincerely,

VITRIA TECHNOLOGY, INC.

	 	 	 
	By:

	 	/s/ Dale Skeen
	 

	 	 
	 

	 	Dale Skeen

Chief Executive Officer

I HAVE READ, UNDERSTAND AND AGREE FULLY TO THE FOREGOING AGREEMENT:

/s/ James A. Davis

 

JIM DAVIS

Date: 8/05/05

 

 

EXHIBIT A

PROPRIETARY INFORMATION AND INVENTIONS AGREEMENTexv10w9

 

EXHIBIT 10.9

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

     THIS AGREEMENT is made as of August 10, 2005, between Therma-Wave, Inc., a Delaware
corporation (the “Company”), and Boris Lipkin (“Executive”).

     WHEREAS, Executive and the Company entered into an employment agreement on February 5, 2003,
as amended (the “Original Agreement”);

WHEREAS, the Original Agreement was amended on August 21, 2003 and March 25, 2004;

     WHEREAS, on March 25, 2004, the Compensation Committee of the Company’s Board of Directors
approved an increase in the severance payable to Executive under the Original Agreement, in the
event Executive’s employment with the Company is terminated by the Company for Cause (as defined
below) or by Executive for Good Reason (as defined below) within 24 months of a Change of Control
(as defined below);

     WHEREAS, the amendment dated March 25, 2004 did not accurately reflect the Compensation
Committee’s change;

     WHEREAS, the Executive and the Company’s Board of Directors wishes to amend and restate the
Original Agreement as set forth below.

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

     1. Employment. The Company shall employ Executive, and Executive hereby accepts
employment with the Company, upon the terms and conditions set forth in this Agreement for the
period beginning on the date hereof and ending as provided in Section 5 hereof (the “Employment
Period”).

     2. Position and Duties.

          (a) During the Employment Period, Executive shall serve as the President and Chief Executive
Officer of the Company and shall have the normal duties, responsibilities, functions and authority
of the President and Chief Executive Officer, subject to the power and authority of the Board to
expand or limit such duties, responsibilities, functions and authority and to overrule actions of
officers of the Company. During the Employment Period, Executive shall render such administrative,
financial and other executive and managerial services to the Company and its Subsidiaries, which
are consistent with Executive’s position as the Board may from time to time direct.

          (b) During the Employment Period, Executive shall report to the Board and shall devote his
best efforts and his full business time and attention (except for permitted vacation periods and
reasonable periods of illness or other incapacity) to the business and affairs of the Company and

 

 

its Subsidiaries. Executive shall perform his duties, responsibilities and functions to the
Company and its Subsidiaries hereunder to the best of his abilities in a diligent, trustworthy,
professional and efficient manner and shall comply with the Company’s and its Subsidiaries’
policies and procedures in all material respects.

          (c) For purposes of this Agreement, “Subsidiaries” shall mean any corporation or other
entity of which the securities or other ownership interests having the voting power to elect a
majority of the board of directors or other governing body are, at the time of determination, owned
by the Company, directly or through one of more Subsidiaries.

     3. Compensation and Benefits.

          (a) During
the Employment Period, Executive’s base salary shall be $400,000 per annum or such
other rate as the Board may determine from time to time (as adjusted from time to time, the
“Base Salary”), which salary shall be payable by the Company in regular installments in
accordance with the Company’s general payroll practices (in effect from time to time). In
addition, during the Employment Period, Executive shall be entitled to participate in all of the
Company’s employee benefit programs for which senior executive employees of the Company and its
Subsidiaries are generally eligible (together with the COBRA Benefits defined below, the
“Benefits”).

          (b) During the Employment Period, the Company shall reimburse Executive for all reasonable
business expenses incurred by him in the course of performing his duties and responsibilities under
this Agreement which are consistent with the Company’s policies in effect from time to time with
respect to travel, entertainment and other business expenses, subject to the Company’s requirements
with respect to reporting and documentation of such expenses.

          (c) In addition to the Base Salary, for each of the Company’s fiscal years, Executive will be eligible to earn a bonus of up to 50% of his Base Salary (the
“Bonus”) based on the Company achieving certain corporate performance goals and Executive
achieving certain individual goals. Each of the target amount of the Bonus, the corporate
performance goals and the individual goals shall be set annually by the Board.

          (d) During the Employment period, the Company shall provide Executive with an automobile
allowance in amount of $1000 per month (the “Automobile Allowance”) to be used as Executive
determines is necessary for the use and maintenance of an automobile (including but not limited to
lease payments, licenses, insurance, gasoline and repairs).

          (e) All amounts payable to Executive as compensation hereunder shall be subject to all
required and customary withholding by the Company.

     4.
Stock Options. Executive has been granted options for the
purchase of 1,000,000
shares of common stock of the Company. The term, vesting and other provisions relating
to such options are set forth in and governed by stock option
agreements and the Company’s

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stock option plan. Notwithstanding anything in the option agreements, the vesting of all of
Executive’s options (whether granted prior to the date of this Agreement or a future date) shall
be accelerated and the options shall become immediately exercisable upon a Change of Control (as
defined below).

     5. Termination.

          (a) The Employment Period (i) shall terminate upon Executive’s resignation (other than for
Good Reason) or death, (ii) shall terminate upon Executive’s Disability, (iii) may be terminated by
the Company at any time for Cause (as defined below) or without Cause and (iv) may be terminated by
Executive for Good Reason.

          (b) If the Employment Period is terminated by the Company without Cause or by Executive for
Good Reason, Executive shall be entitled to receive the Base Salary, the Automobile Allowance and
those certain benefits to which Executive shall be entitled under the Consolidated Omnibus Budget
Reconciliation Act of 1985 upon Executive’s timely submission of an appropriate application to the
applicable insurance carrier and such insurance carrier’s acceptance of such application (the
“COBRA Benefits”) to be paid for by the Company (collectively, the “Severance
Payment”), in each case until the date which is six (6) months after the date of such
termination (the “Severance Period”); provided that the portion of the Bonus that Executive
would have been entitled to receive for the fiscal year in which the Severance Period terminates
shall be reduced proportionately by the ratio of the number of days of such fiscal year not
included in the Severance Period to the total number of days in such fiscal year. If the Employment
Period is terminated by the Company without Cause or by Executive for Good Reason at any time
within 24 months following a Change of Control (as defined below), Executive shall be entitled to
receive the Severance Payment until the date which is 24 months after the date of such termination
(the “Change of Control Severance Period”); provided, however, that Executive shall not be
entitled to receive any portion of his Bonus for the fiscal year in which the Change of Control
Severance Period terminates. The Severance Payment will be payable at such times as such payments
would have been payable had Executive not been terminated. Notwithstanding this provision,
Executive shall be entitled to receive the COBRA Benefits following the Severance Period or the
Change of Control Severance Period for the maximum time allowed under applicable law to the extent
Executive pays for such COBRA Benefits. Notwithstanding anything in this Agreement to the contrary,
the Company shall have no obligation to pay any part or all of the Severance Payment if at any time
during the Severance Period or the Change of Control Severance Period Executive is in breach of
Sections 6 through 9 hereof. If the Employment Period is terminated for any of the foregoing
reasons, the Severance Payment shall be reduced by fifty percent (50%) of the amount of any
compensation Executive receives in respect of any other employment during the Severance Period or
the Change of Control Severance Period. Upon request from time to time, Executive shall furnish the
Company with a true and complete certificate specifying any such compensation due to or received by
him. As a condition to the Company’s obligations (if any) to make the Severance Payment pursuant to
this Section 5(b), Executive will execute and deliver a general release substantially in the form
of Exhibit A attached hereto.

          (c) If the Employment Period is terminated as a result of Executive’s Disability, Executive
shall be entitled to receive the Severance Payment until the date, which is twelve (12) months

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after the date of such termination (the “Disability Severance Period”). Notwithstanding
this
provision, Executive shall be entitled to receive the COBRA Benefits following the Disability
Severance Period for the maximum time allowed under applicable law to the extent Executive pays for
such COBRA Benefits.

          (d) If the Employment Period is terminated by the Company for Cause or is terminated upon
Executive’s resignation (other than for Good Reason) or death, Executive shall be entitled to
receive the Base Salary through the date of termination. If the Employment Period is terminated by
Executive’s death, the Board may, in its good faith determination, grant Executive the pro rata
portion of Executive’s Bonus that Executive would have received if Executive had remained living
until such Bonus had been granted.

          (e) Except as specifically provided herein, all of Executive’s rights to Benefits and bonuses
which accrue or become payable after the termination of the Employment Period shall cease upon such
termination.

          (f) For purposes of this Agreement, “Disability” shall mean any physical or mental
illness or incapacity of Executive if, as reasonably determined by the Board in good faith, such
illness or incapacity results in Executive’s inability to perform his full-time duties and
responsibility for the Company (i) for a period of three consecutive months, (ii) for a period of
six (6) months in any twelve (12) month period, or (iii) at such time when satisfactory medical
evidence exists that Executive has a physical or mental illness or incapacity that will likely
prevent him from returning to the performance of his work duties for six (6) months or longer.

          (g) For purposes of this Agreement, “Cause” shall mean (i) the commission of a felony
or any other act or omission involving dishonesty, disloyalty or fraud with respect to the Company
or any of its Subsidiaries or any of their customers or suppliers, (ii) conduct tending to bring
the Company or any of its Subsidiaries into substantial public disgrace or disrepute, (iii)
substantial and repeated failure to perform duties as reasonably direct by the Board, (iv) gross
negligence or willful misconduct with respect to the Company or any of its Subsidiaries, or (v) any
other material breach of this Agreement.

          (h) For purposes of this Agreement, “Good Reason” shall mean the occurrence (without
Executive’s consent) of any one of the following acts by the Company, or failure by the Company to
act: (i) the assignment to Executive of duties that represent a substantial adverse alteration in
the nature or status of his responsibilities as a senior executive officer of the Company, except
in the event Executive is unable to or fails to perform his normal full-time duties and
responsibility with the Company as a result of incapacity due to physical or mental illness or
incapacity; (ii) a reduction in the Base Salary as in effect on the date hereof if there is not
also a reduction in the base salaries of a majority of the Company’s other senior executives; (iii)
the relocation of the Company’s principal executive offices to a location outside the San Francisco
Area (which includes the counties of San Francisco, Alameda, Santa Clara, Contra Costa, San Mateo
and Marin) or the Company’s requiring Executive to be based anywhere other than the Company’s
principal executive offices (but not including required travel on the Company’s business); (iv)
after a Change of Control Executive (A) is not subsequently offered a comparable position to that
of President and Chief Executive Officer with comparable Base Salary, Bonus and Benefits
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(a
“Comparable Position”) or (B) is offered and accepts a Comparable Position but, within 24 months
of the Change of Control, terminates his employment in such Comparable Position for any of the
reasons listed in clauses (i)-(iii) or (v) of this Section 5(h); or (v) the wrongful failure by the
Company to pay to Executive any portion of the Base Salary, Bonus, Automobile Allowance or
Benefits, or to pay to Executive any portion of an installment of deferred compensation or Benefits
under any deferred compensation or benefits program of the Company, within 45 days of the date such
Base Salary, Bonus, Automobile Allowance, compensation or Benefit is due.

          (i) For purposes of this Agreement, “Change of Control” shall mean any transaction
involving the Company and an Independent Third Party or affiliated group of Independent Third
Parties pursuant to which such party or parties acquire (i) a majority of the outstanding shares of
capital stock of the Company entitled to vote in the election of the Board (whether by merger,
consolidation or sale or transfer of the Company’s capital stock) or (ii) all or substantially all
of the Company’s assets determined on a consolidated basis.

          (j) For purposes of this Agreement, “Independent Third Party” means any person who,
immediately prior to the contemplated transaction, does not own in excess of 5% of the capital
stock on a fully diluted basis, who is not controlling, controlled by or under common control with
any such 5% owner of the capital stock and who is not the spouse or descendant (by birth or
adoption) of any such 5% owner of the capital stock).

     6. Confidential Information and Right to Company Materials.

          (a) Executive acknowledges that the information, observations and data (including Trade
Secrets as defined below) obtained by him while employed by the Company and its Subsidiaries
concerning the business or affairs of the Company, Sensys Instruments Corporation or any other
Subsidiary (“Confidential Information”) are the property of the Company or such Subsidiary.
Therefore, Executive agrees that he shall not disclose to any unauthorized person or use for his
own purposes any Confidential Information without the prior written consent of the Board, unless
and to the extent that the Confidential Information becomes generally known to and available for
use by the public other than as a result of Executive’s acts or omissions. Executive shall deliver
to the Company at the termination or expiration of the Employment Period, or at any other time the
Company may reasonably request, all memoranda, notes, plans, records, reports, computer tapes,
printouts and software and other documents and data (and copies thereof) embodying or relating to
the Confidential Information, Work Product (as defined below) or the business of the Company,
Sensys Instruments Corporation or any other Subsidiaries which he may then possess or have under
his control.

          (b) Executive agrees that all styles, designs, lists, materials, books, files, reports,
correspondence, data, records, and other documents pertaining to his employment or to any
confidential information referred to above (“Company Material”) used or prepared by, or
made available to, Executive, shall be and shall remain the property of the Company or its
designees. Upon the termination of Executive’s employment or the expiration of this Agreement, all
Company Materials shall be returned immediately to the Company, and Executive shall not make or
retain any copies or excerpts thereof.

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          (c) Executive represents and warrants to the Company that Executive took nothing with him
which belonged to any former employer when Executive left his prior position and that Executive has
nothing that contains any information, which belongs to any former employer. If at any time
Executive discovers this is incorrect, Executive shall promptly return any such materials to
Executive’s former employer. The Company does not want any such materials, and Executive shall not
be permitted to use or refer to any such materials in the performance of Executive’s duties
hereunder.

     7. Intellectual Property, Inventions and Patents. Executive acknowledges that all
discoveries, concepts, ideas, inventions, innovations, improvements, developments, methods,
designs, analyses, drawings, reports, patent applications, copyrightable work and mask work
(whether or not including any confidential information) and all registrations or applications
related thereto, all other proprietary information and all similar or related information (whether
or not patentable) which relate to the Company’s or any of its Subsidiaries’ actual or anticipated
business, research and development or existing or future products or services and which are
conceived, developed or made by Executive (whether above or jointly with others) while employed by
the Company or its predecessor and its Subsidiaries, whether before or after the date of this
Agreement (“Work Product”), belong to the Company or such Subsidiary. Executive shall
promptly disclose such Work Product to the Board and, at the Company’s expense, perform all actions
reasonably requested by the Board (whether during or after the Employment Period) to establish and
confirm such ownership (including, without limitation, assignments, consents, powers of attorney
and other instruments).

     8. Protection of Trade Secrets. Executive acknowledges and agrees with the Company
that Executive’s services to the Company require the use of information including a formula,
pattern, compilation, program, device, method, technique, or process that the Company has made
reasonable efforts to keep confidential and that derives independent economic value, actual or
potential, from not being generally known to the public or to other persons who can obtain economic
value from its disclosure or use (“Trade Secrets”). Executive further acknowledges and
agrees that the Company would be irreparably damaged if Executive were to provide similar services
requiring the use of such Trade Secrets to any person or entity competing with the Company or
engaged in a similar business. Executive accordingly covenants and agrees with the Company that
during the period commencing with the date of this Agreement and ending on the second anniversary
of the date of the termination of Executive’s employment with the Company (the “Protection
Period”), Executive shall not, directly or indirectly, either for himself or for any other
individual, corporation, partnership, joint venture or other entity, participate in any business in
the United States, Europe, China, Japan, Korea, Singapore and Taiwan in which he would be required
to employ, reveal, or otherwise utilize Trade Secrets used hereafter by the Company but prior to
the Executive’s termination. For purposes of this Agreement, the term “participate in” shall
include, without limitation, having any direct or indirect interest in any corporation,
partnership, joint venture or other entity, whether as a sole proprietor, owner, stockholder,
partner, joint venturer, creditor or otherwise, or rendering any direct or indirect service or
assistance to any individual, corporation, partnership, joint venture and other business entity
(whether as a director, officer, manager, supervisor, employee, agent, consultant or otherwise).

     9. Nonsolicitation. During the Protection Period, Executive shall not (i) induce or
attempt to induce any employee of the Company to leave the employ of the Company, or in any way

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interfere with the relationship between the Company and any employee thereof, or (ii) induce
or attempt to induce any customer, supplier, licensee or other business relation of the Company to
cease doing business with the Company (including, without limitation, making any negative
statements or communications concerning the Company).

     10. Executive’s Representations. Executive hereby represents and warrants to the
Company that (i) the execution, delivery and performance of this Agreement by Executive do not and
shall not conflict with, breach, violate or cause a default under any contract, agreement,
instrument, order, judgment or decree to which Executive is a party or by which he is bound, (ii)
Executive is not a party to or bound by any employment agreement, noncompete agreement or
confidentiality agreement with any other person or entity and (iii) upon the execution and delivery
of this Agreement by the Company, this Agreement shall be the valid and binding obligation of
Executive, enforceable in accordance with its terms. Executive hereby acknowledges and represents
that he has consulted with independent legal counsel regarding his rights and obligations under
this Agreement and that he fully understands the terms and conditions contained herein.

     11. Survival. Sections 5 through 19 shall survive and continue in full force in
accordance with their terms notwithstanding the expiration or termination of the Employment Period.

     12. Notices. Any notice provided for in this Agreement shall be in writing and shall
be either personally delivered, sent by reputable overnight courier service or mailed by first
class mail, return receipt requested, to the recipient at the address below indicated:

Notices to Executive:

Boris Lipkin

412 Sand Hill Circle

Menlo Park, CA 94025

Notices to the Company:

Therma-Wave, Inc.

1250 Reliance Way

Fremont, California 94539

With a copy to:

Wilson Sonsini Goodrich & Rosati

650 Page Mill Road

Palo Alto, CA 94304

Attn: Matthew W. Sonsini

or such other address or to the attention of such other person as the recipient party shall have
specified by prior written notice to the sending party. Any notice under this Agreement shall be
deemed to have been given when so delivered, sent or mailed.

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     13. Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement is held to be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall
not affect any other provision of this Agreement or any action in any other jurisdiction, but this
Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.

     14. Complete Agreement. This Agreement, those documents expressly referred to herein
and other documents of even date herewith embody the complete agreement and understanding among the
parties and supersede and preempt any prior understandings, agreements or representations by or
among the parties, written or oral, which may have related to the subject matter hereof in any way.

     15. No Strict Construction. The language used in this Agreement shall be deemed to be
the language chosen by the parties hereto to express their mutual intent, and no rule of strict
construction shall be applied against any party.

     16. Counterparts. This Agreement may be executed in separate counterparts, each of
which is deemed to be an original and all of which taken together constitute one and the same
agreement.

     17. Successors and Assigns. This Agreement is intended to bind and inure to the
benefit of and be enforceable by Executive, the Company and their respective heirs, successors and
assigns, except that Executive may not assign his rights or delegate his duties or obligations
hereunder without the prior written consent of the Company.

     18. Choice of Law. All issues and questions concerning the construction, validity,
enforcement and interpretation of this Agreement and the exhibits and schedules hereto shall be
governed by, and construed in accordance with, the laws of the State of California, without giving
effect to any choice of law or conflict of law rules or provisions (whether of the State of
California or any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of California.

     19. Amendment and Waiver. The provisions of this Agreement may be amended or waived
only with the prior written consent of the Company (as approved by the Board) and Executive, and no
course of conduct or course of dealing or failure or delay by any party hereto in enforcing or
exercising any of the provisions of this Agreement (including, without limitation, the Company’s
right to terminate the Employment Period for Cause) shall affect the validity, binding effect or
enforceability of this Agreement or be deemed to be an implied waiver of any provision of this
Agreement.

-8-

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
written above.

	 	 	 	 	 
	 	THERMA-WAVE, INC.

 	 
	 	By:  	/s/ Joseph J. Passarello
 	 
	 	 	Its: Senior Vice President and Chief Financial
Officer 	 
	 	 

 	 
	 	 	/s/ Boris Lipkin
 	 
	 	 	Boris Lipkin	 

-9-

 

Exhibit A

GENERAL RELEASE

     I, Boris Lipkin, in consideration of and subject to the performance by Therma-Wave, Inc., a
Delaware corporation (together with its subsidiaries, the “Company”), of its obligations
under the Amended and Restated Employment Agreement, dated as of August 10, 2005 (the
“Agreement”), do hereby release and forever discharge as of the date hereof the Company and
its affiliates and all present and former directors, officers, agents, representatives, employees,
successors and assigns of the Company and its affiliates and the Company’s direct or indirect
owners (collectively, the “Released Parties”) to the extent provided below.

     1. I understand that any payments or benefits paid or granted to me under paragraph 5(b) of
the Agreement represent, in part, consideration for signing this General Release and are not
salary, wages or benefits to which I was already entitled. I understand and agree that I will not
receive the payments and benefits specified in paragraph 5(b) of the Agreement unless I execute
this General Release and do not revoke this General Release within the time period permitted
hereafter or breach this General Release. Such payments and benefits will not be considered
compensation for purposes of any employee benefit plan, program, policy or arrangement maintained
or hereafter established by the Company or its affiliates. I also acknowledge and represent that I
have received all payments and benefits that I am entitled to receive (as of the date hereof) by
virtue of any employment by the Company.

     2. Except as provided in paragraph 4 below and except for the provisions of my Employment
Agreement which expressly survive the termination of my employment with the Company, I knowingly
and voluntarily (for myself, my heirs, executors, administrators and assigns) release and forever
discharge the Company and the other Released Parties from any and all claims, suits, controversies,
actions, causes of action, cross-claims, counter-claims, demands, debts, compensatory damages,
liquidated damages, punitive or exemplary damages, other damages, claims for costs and attorneys’
fees, or liabilities of any nature whatsoever in law and in equity, both past and present (through
the date this General Release becomes effective and enforceable) and whether known or unknown,
suspected, or claimed against the Company or any of the Released Parties which I, my spouse, or any
of my heirs, executors, administrators or assigns, may have, which arise out of or are connected
with my employment with, or my separation or termination from, the Company (including, but not
limited to, any allegation, claim or violation, arising under: Title VII of the Civil Rights Act
of 1964, as amended; the Civil Rights Act of 1991; the Age Discrimination in Employment Act of
1967, as amended (including the Older Workers Benefit Protection Act); the Equal Pay Act of 1963,
as amended; the Americans with Disabilities Act of 1990; the Family and Medical Leave Act of 1993;
the Worker Adjustment Retraining and Notification Act; the Employee Retirement Income Security Act
of 1974; any applicable Executive Order Programs; the Fair Labor Standards Act; or their state or
local counterparts; or under any other federal, state or local civil or human rights law, or under
any other local, state, or federal law, regulation or ordinance; or under any public policy,
contract or tort, or under common law; or arising under any policies, practices or procedures of
the Company; or any claim for wrongful discharge, breach of contract, infliction of

A-1

 

emotional distress, defamation; or any claim for costs, fees, or other expenses, including
attorneys’ fees incurred in these matters) (all of the foregoing collectively referred to herein as
the “Claims”).

     3. I represent that I have made no assignment or transfer of any right, claim, demand, cause
of action, or other matter covered by paragraph 2 above.

     4. I agree that this General Release does not waive or release any rights or claims that I may
have under the Age Discrimination in Employment Act of 1967 which arise after the date I execute
this General Release. I acknowledge and agree that my separation from employment with the Company
in compliance with the terms of the Agreement shall not serve as the basis for any claim or action
(including, without limitation, any claim under the Age Discrimination in Employment Act of 1967).

     5. In signing this General Release, I acknowledge and intend that it shall be effective as a
bar to each and every one of the Claims hereinabove mentioned or implied. I expressly consent that
this General Release shall be given full force and effect according to each and all of its express
terms and provisions, including those relating to unknown and unsuspected Claims (notwithstanding
any state statute that expressly limits the effectiveness of a general release of unknown,
unsuspected and unanticipated Claims), if any, as well as those relating to any other Claims
hereinabove mentioned or implied. I acknowledge and agree that this waiver is an essential and
material term of this General Release and that without such waiver the Company would not have
agreed to the terms of the Agreement. I further agree that in the event I should bring a Claim
seeking damages against the Company, or in the event I should seek to recover against the Company
in any Claim brought by a governmental agency on my behalf, this General Release shall serve as a
complete defense to such Claims. I further agree that I am not aware of any pending charge or
complaint of the type described in paragraph 2 as of the execution of this General Release.

     6. I represent that I am not aware of any claim by me other than the claims that are released
by this Agreement. I acknowledge that I am familiar with the provisions of California Civil Code
Section 1542, which provides as follows:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN
BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”

     Being aware of such provisions of law, I agree to expressly waive any rights I may have
thereunder, as well as under any other statute or common law principles of similar effect.

     7. I agree that neither this General Release, nor the furnishing of the consideration for this
General Release, shall be deemed or construed at any time to be an admission by the Company, any
Released Party or myself of any improper or unlawful conduct.

     8. I agree that I will forfeit all amounts payable by the Company pursuant to the Agreement if
I challenge the validity of this General Release. I also agree that if I violate this

A-2

 

General Release by suing the Company or the other Released Parties, I will pay all costs and
expenses of defending against the suit incurred by the Released Parties, including reasonable
attorneys’ fees, and return all payments received by me pursuant to the Agreement.

     9. I agree that this General Release is confidential and agree not to disclose any information
regarding the terms of this General Release, except to my immediate family and any tax, legal or
other counsel I have consulted regarding the meaning or effect hereof or as required by law, and I
will instruct each of the foregoing not to disclose the same to anyone.

     10. Any non-disclosure provision in this General Release does not prohibit or restrict me (or
my attorney) from responding to any inquiry about this General Release or its underlying facts and
circumstances by the Securities and Exchange Commission (SEC), the National Association of
Securities Dealers, Inc. (NASD), any other self-regulatory organization or governmental entity.

     11. I agree to reasonably cooperate with the Company in any internal investigation or
administrative, regulatory, or judicial proceeding. I understand and agree that my cooperation may
include, but not be limited to, making myself available to the Company upon reasonable notice for
interviews and factual investigations; appearing at the Company’s request to give testimony without
requiring service of a subpoena or other legal process; volunteering to the Company pertinent
information; and turning over to the Company all relevant documents which are or may come into my
possession all at times and on schedules that are reasonably consistent with my other permitted
activities and commitments. I understand that in the event the Company asks for my cooperation in
accordance with this provision, the Company will reimburse me solely for reasonable travel
expenses, including lodging and meals, upon my submission of receipts.

     12. I agree not to disparage the Company, its past and present investors, officers, directors
or employees or its affiliates and to keep all confidential and proprietary information about the
past or present business affairs of the Company and its affiliates confidential unless a prior
written release from the Company is obtained. I further agree that as of the date hereof, I have
returned to the Company any and all property, tangible or intangible, relating to its business,
which I possessed or had control over at any time (including, but not limited to, company-provided
credit cards, building or office access cards, keys, computer equipment, manuals, files, documents,
records, software, customer data base and other data) and that I shall not retain any copies,
compilations, extracts, excerpts, summaries or other notes of any such manuals, files, documents,
records, software, customer data base or other data.

     13. Notwithstanding anything in this General Release to the contrary, this General Release
shall not relinquish, diminish, or in any way affect any rights or claims arising out of any breach
by the Company or by any Released Party of the Agreement after the date hereof.

     14. Whenever possible, each provision of this General Release shall be interpreted in, such
manner as to be effective and valid under applicable law, but if any provision of this General
Release is held to be invalid, illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any
other provision or any other jurisdiction, but this General Release shall be reformed, construed
and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never
been contained herein.

A-3

 

     BY SIGNING THIS GENERAL RELEASE, I REPRESENT AND AGREE THAT:

          (a) I HAVE READ IT CAREFULLY;

          (b) I UNDERSTAND ALL OF ITS TERMS AND KNOW THAT I AM GIVING UP IMPORTANT RIGHTS, INCLUDING BUT
NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, TITLE
VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED; THE EQUAL PAY ACT OF 1963, THE AMERICANS WITH
DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED;

          (c) I VOLUNTARILY CONSENT TO EVERYTHING IN IT;

          (d) I HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND I HAVE DONE SO OR,
AFTER CAREFUL READING AND CONSIDERATION I HAVE CHOSEN NOT TO DO SO OF MY OWN VOLITION;

          (e) I HAVE HAD AT LEAST 21 DAYS FROM THE DATE OF MY RECEIPT OF THIS RELEASE SUBSTANTIALLY IN
ITS FINAL FORM ON          ,           TO CONSIDER IT AND THE CHANGES MADE SINCE THE          ,
          VERSION OF THIS RELEASE ARE NOT MATERIAL AND WILL NOT RESTART THE REQUIRED 21-DAY PERIOD;

          (f) THE CHANGES TO THE AGREEMENT SINCE          ,           EITHER ARE NOT MATERIAL OR WERE MADE
AT MY REQUEST.

          (g) I UNDERSTAND THAT I HAVE SEVEN DAYS AFTER THE EXECUTION OF THIS RELEASE TO REVOKE IT AND
THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS
EXPIRED;

          (h) I HAVE SIGNED THIS GENERAL RELEASE KNOWINGLY AND VOLUNTARILY AND WITH THE ADVICE OF ANY
COUNSEL RETAINED TO ADVISE ME WITH RESPECT TO IT; AND

          (i) I AGREE THAT THE PROVISIONS OF THIS GENERAL RELEASE MAY NOT BE AMENDED, WAIVED, CHANGED OR
MODIFIED EXCEPT BY AN INSTRUMENT

A-4

 

     IN WRITING SIGNED BY AN AUTHORIZED REPRESENTATIVE OF THE COMPANY AND BY ME.

	 	 	 	 	 
	 	 	 
	DATE:  _______, 20__ 	 	 
	 	Boris Lipkin 	 
	 	 	 
	 

A-5

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