Document:

exv10w1

 

Exhibit 10.1

THERMA-WAVE, INC.

PURCHASE AGREEMENT

     This Purchase Agreement (this “Agreement”) is made and entered into as of November 18,
2005, by and between Therma-Wave, Inc., a Delaware corporation (the “Company”), and each of
the purchasers listed on Exhibit A attached hereto (collectively, the “Purchasers”
and individually, a “Purchaser”).

RECITALS

     WHEREAS, the Company desires to sell to the Purchasers, and the Purchasers desire to purchase
from the Company, an aggregate of ten thousand four hundred (10,400) units (each, a “Unit”
and collectively, the “Units”), with each Unit being comprised of (i) one share of Series B
Preferred Stock, par value $0.01 per share (the “Preferred Stock”) and (ii) one hundred
fifty (150) warrants to purchase common stock of the Company, par value $0.01 per share
(“Common Stock”), (each a “Warrant” and, together with the Preferred Stock, the
“Securities”) of Common Stock, on the terms and conditions set forth in this Agreement; and

     NOW, THEREFORE, in consideration of the foregoing, the mutual promises hereinafter set forth,
and other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

     1. AGREEMENT TO PURCHASE AND SELL STOCK.

          (a) Authorization. The Company’s Board of Directors has authorized the issuance,
pursuant to the terms and conditions of this Agreement, of up to ten thousand four hundred (10,400)
Units.

          (b) Agreement to Purchase and Sell Securities. Subject to the terms and conditions of
this Agreement, each Purchaser severally agrees to purchase, and the Company agrees to sell and
issue to each Purchaser, at the Closing (as defined below), that number of Units set forth opposite
the appropriate Purchaser’s name on Exhibit A attached hereto. The purchase price of each
Unit (the “Per Unit Price”) shall be $1,000.

          (c) Use of Proceeds. The Company intends to apply the net proceeds from the sale of
the Units for general corporate purposes.

     2. CLOSING. Subject to the satisfaction of closing conditions, the purchase and sale
of the Units shall take place within two (2) business days after the satisfaction of closing
conditions at the offices of Wilson Sonsini Goodrich & Rosati, Professional Corporation, 650 Page
Mill Road, Palo Alto, California, at 10:00 a.m. California time, on November 22, 2005, or at such
other time and place as the Company and the Purchasers mutually agree upon (which time and place
are referred to in this Agreement as the “Closing”). At the Closing, the Company shall
authorize its transfer agent

 

 

to issue to each Purchaser, against delivery of payment for the Units, one or more stock
certificates (the “Certificates”) registered in the name of each Purchaser, representing
the number of shares of Preferred Stock set forth opposite such Purchaser’s name on Exhibit
A hereto, and bearing the legend set forth in Section 4(k) herein and one or more warrant
certificates representing the number of Warrants set forth opposite such person’s name on
Exhibit A hereto. Closing documents may be delivered by facsimile with original signature
pages sent by overnight courier. The date of the Closing is referred to herein as the “Closing
Date”.

     3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby represents and
warrants to each Purchaser that the statements in this Section 3 are true and correct as of the
date hereof and as of the Closing Date, except as set forth in the disclosure letter delivered to
the Purchasers concurrently herewith (the “Disclosure Letter”):

          (a) Organization Good Standing and Qualification. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of Delaware and has
all corporate power and authority required to (a) carry on its business as presently conducted and
(b) enter into this Agreement, the Stockholder Agreement dated as of the date hereof (the
“Stockholder Agreement”), the Registration Rights Agreement, dated as of the date hereof
(the “Registration Rights Agreement”) and the Warrants (collectively, the “Operative
Documents”), and to consummate the transactions contemplated hereby and thereby. The Company
is qualified to do business and is in good standing in each jurisdiction in which the failure to so
qualify would have a Material Adverse Effect. As used in this Agreement, “Material Adverse
Effect” means a material adverse effect on, or a material adverse change in, or a group of such
effects on or changes in, the business, operations, financial condition, results of operations,
assets or liabilities of the applicable party and its subsidiaries, taken as a whole.

          (b) Capitalization. The capitalization of the Company, without giving effect to the
transactions contemplated by this Agreement, is as follows. The authorized stock of the Company
consists of (i) 75,000,000 shares of Common Stock; and (ii) 1,000,000 shares of Series A
Convertible Preferred Stock, and (iii) 5,000,000 shares of undesignated Preferred Stock. As of
October 28, 2005, the Company consists of 36,867,751 shares of Common Stock issued and outstanding
and no shares issued and outstanding of Series A Convertible Preferred Stock or undesignated
Preferred Stock. All such shares of Common Stock and Preferred Stock have been duly authorized, and
all such issued and outstanding shares of Common Stock have been validly issued, are fully paid and
nonassessable. No such outstanding shares of Common Stock were issued in violation of any
pre-emptive rights.

          The Company has also reserved: (i) 3,500,000 shares of Common Stock for issuance upon exercise
of options granted under the Company’s 2000 Employee Stock Purchase Plan; and (ii) 8,387,429 shares
of Common Stock for issuance to employees of the Company under the Company’s 2000 Equity Incentive
Plan. All shares of Common Stock subject to issuance as aforesaid, upon issuance on the terms and
conditions specified in the instruments pursuant to which they are issuable, will be duly
authorized, validly issued, fully paid and nonassessable. Except as provided in this Agreement and
set forth in the Disclosure Letter, and except for the (i) shares of Common Stock subject to
outstanding options issued under any of the Company’s stock plans referenced in this paragraph, and
(ii) 162,006 shares of Common Stock subject to outstanding

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warrants, there are no other equity securities, options, warrants, calls, rights, commitments
or agreements of any character to which the Company is a party or by which it is bound obligating
the Company to issue, deliver, sell, repurchase or redeem, or cause to be issued, delivered, sold,
repurchased or redeemed, any shares of the capital stock of the Company or obligating the Company
to grant, extend or enter into any such equity security, option, warrant, call, right, commitment
or agreement.

          (c) Due Authorization. All corporate actions on the part of the Company necessary for
the authorization, execution, delivery of, and the performance of all obligations of the Company
under the Operative Documents and the authorization, issuance, reservation for issuance and
delivery of all of the Securities being sold under the Operative Documents have been taken, and the
Operative Documents constitute the legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except (a) as may be limited by (i) applicable
bankruptcy, insolvency, reorganization or others laws of general application relating to or
affecting the enforcement of creditors’ rights generally and (ii) the effect of rules of law
governing the availability of equitable remedies and (b) as rights to indemnity or contribution may
be limited under federal or state securities laws or by principles of public policy thereunder.

          (d) Valid Issuance of Stock.

               (i) Valid Issuance. The Securities to be issued pursuant to this Agreement will be,
upon payment therefor by the Purchasers in accordance with this Agreement, duly authorized, validly
issued, fully paid and non-assessable, free from all taxes, liens and charges with respect to the
issue thereof. The issuance of the shares of Common Stock issued or issuable from time to time
upon the conversion of the Preferred Stock will be, and at all times prior to such conversion, will
have been, duly authorized, duly reserved for issuance upon such conversion, and will be, upon such
conversion, validly issued, fully paid and non-assessable, free from all taxes, liens and charges
with respect to the issue thereof. The issuance of the shares of Common Stock issued or issuable
from time to time upon the exercise of the Warrants will be, and at all times prior to such
exercise, will have been, duly authorized, duly reserved for issuance upon such exercise and
payment of the exercise price of the Warrants, and will be, upon such exercise and payment, validly
issued, fully paid and non-assessable, free from all taxes, liens and charges with respect to the
issue thereof.

               (ii) Compliance with Securities Laws. Subject to the accuracy of the representations
made by the Purchasers in Section 4 hereof, the Securities will be issued to the Purchasers in
compliance with applicable exemptions from (i) the registration and prospectus delivery
requirements of the Securities Act of 1933, as amended (the “Securities Act”) and (ii) the
registration and qualification requirements of all applicable securities laws of the states of the
United States.

          (e) Governmental Consents. Except as set forth in the Disclosure Letter, no consent,
approval, order or authorization of, or registration, qualification, designation, declaration or
filing with, or notice to, any federal, state or local governmental authority on the part of the
Company is required in connection with the issuance of the Securities to the Purchasers, or the
consummation of the other transactions contemplated by this Agreement, except (i) such filings as

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have been made prior to the date hereof, (ii) the filing of a notification form with The
Nasdaq Stock Market, Inc. (“Nasdaq”) and (iii) the filing of the notice required by Section
25102(f) or 25102.1 of the California Corporations Code and (b) the filing of a notice on Form D
with the Securities and Exchange Commission.

          (f) Non-Contravention. Except as set forth in the Disclosure Letter, the execution,
delivery and performance of this Agreement by the Company, and the consummation by the Company of
the transactions contemplated hereby (including issuance of the Securities), do not (i) contravene
or conflict with the Certificate of Incorporation, as amended, or Bylaws of the Company; (ii)
constitute a violation of any provision of any federal, state, local or foreign law binding upon or
applicable to the Company or its assets, etc.; or (iii) constitute a default or require any consent
under, give rise to any right of termination, cancellation or acceleration of, or to a loss of any
material benefit to which the Company is entitled under, or result in the creation or imposition of
any lien, claim or encumbrance on any assets of the Company under, any Material Contract (as
defined below) to which the Company is a party or any material permit, license or similar right
relating to the Company or by which the Company may be bound or affected.

          (g) Litigation. There is no material action, suit, proceeding, claim, arbitration or
investigation (“Action”) pending or, to the Company’s knowledge, threatened: (a) against
the Company, its activities, properties or assets, or any officer, director or employee of the
Company in connection with such officer’s, director’s or employee’s relationship with, or actions
taken on behalf of, the Company, or (b) that seeks to prevent, enjoin, alter or delay the
transactions contemplated by this Agreement (including issuance of the Securities). The Company is
not a party to or subject to the provisions of, any order, writ, injunction, judgment or decree of
any court or government agency or instrumentality. The Company does not intend to initiate any
Action that is reasonably likely to have a Material Adverse Effect on the Company.

          (h) Compliance with Law and Charter Documents. The Company is not in violation or
default of any provisions of its Certificate of Incorporation, as amended, or Bylaws. The Company
has complied in all material respects and is in compliance in all material respects with all
applicable statutes, laws, rules, regulations and orders of the United States of America and all
states thereof, foreign countries and other governmental bodies and agencies having jurisdiction
over the Company’s business or properties.

          (i) SEC Documents.

                    (1) Reports. The Company has filed in a timely manner all reports, schedules, forms,
statements and other documents required to be filed by it with the SEC pursuant to the reporting
requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules
and regulations promulgated thereunder, except for where the failure to do so would not be
reasonably likely to have a Material Adverse Effect. The Company has made available to the
Purchasers prior to the date hereof copies of its Annual Report on Form 10-K for the fiscal year
ended April 3, 2005, its quarterly report on Form 10-Q for the fiscal quarters ended July 3, 2005
and October 2, 2005, its current reports on Form 8-K filed on August 23, 2005, October 6, 2005 and
October 27, 2005 and its Proxy Statement for its 2005 Annual Meeting of Stockholders filed by the
Company with the Securities and Exchange Commission (“SEC”) (the Form 10-K, Form 10-Q and

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Proxy Statement are collectively referred to herein as the “SEC Documents”). Each of
the SEC Documents, as of the respective date thereof (or if amended or superseded by a filing prior
to the date hereof, then on the date of such filing), did not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not misleading. The Company has
filed all material contracts that are required to be filed as exhibits to the SEC Documents (the
“Material Contracts”).

                    (2) Financial Statements. The financial statements of the Company in the SEC
Documents present fairly, in accordance with United States generally accepted accounting principles
(“GAAP”), the financial position of the Company as of the dates indicated, and the results
of its operations and cash flows for the period therein specified, subject, in the case of
unaudited financial statements for interim periods, to normal year-end audit adjustments.

                    (3) Sarbanes-Oxley. The Chief Executive Officer and the acting Chief Financial
Officer of the Company have signed, and the Company has furnished to the SEC, all certifications
required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002. Such certifications contain no
qualifications or exceptions to the matters certified therein and have not been modified or
withdrawn; and neither the Company nor any of its officers has received notice from any
governmental entity questioning or challenging the accuracy, completeness, form or manner of filing
or submission of such certifications. The Company is otherwise in compliance with all applicable
effective provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations issued
thereunder by the SEC, except where such non-compliance would not be reasonably likely to have a
Material Adverse Effect

          (j) Absence of Certain Changes. Since June 27, 2005, and the date hereof, and except
as set forth in the Disclosure Letter or in the SEC Documents, the business and operations of the
Company have been conducted in the ordinary course consistent with past practice. Since June 27,
2005, and the date hereof, and except as set forth in the Disclosure Letter, there has not been (i)
any change, circumstance or event that is reasonably likely to have a Material Adverse Effect, (ii)
any declaration, setting aside or payment of any dividend or other distribution of the assets of
the Company with respect to any shares of capital stock of the Company or any repurchase,
redemption or other acquisition by the Company of any outstanding shares of the Company’s capital
stock, (iii) any damage, destruction or loss, whether or not covered by insurance, except for such
occurrences, individually and collectively, that have not had, and would not reasonably be expected
to have, a Material Adverse Effect, (iv) any waiver by the Company of a valuable right or of a
material debt owed to it, except for such waivers, individually and collectively, that have not
had, and would not reasonably be expected to have, a Material Adverse Effect, (v) any material
change by the Company in its accounting principles, methods or practices or in the manner in which
it keeps its accounting books and records, except any such change required by a change in GAAP or
by the SEC, and (vi) any entry into, amendment of, termination or non-renewal by the Company of any
material contract, license, lease, transaction, commitment or other right or obligation.

          (k) Registration Rights. Except as provided in Section 5 herein and the Disclosure
Letter, effective upon the Closing, the Company is not currently subject to any agreement providing
any person or entity any rights (including piggyback registration rights) to have any securities of
the Company registered with the SEC or registered or qualified with any other governmental
authority.

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          (l) Taxes. The Company has filed all necessary federal, state, and foreign income and
franchise tax returns due prior to the date hereof and has paid or accrued all taxes shown as due
thereon, and the Company has no knowledge of any material tax deficiency which has been or might be
asserted or threatened against it.

          (m) General Solicitation. Neither the Company nor any other person or entity
authorized by the Company to act on its behalf has engaged in a general solicitation or general
advertising (within the meaning of Regulation D of the Securities Act) of investors with respect to
offers or sales of the Securities.

          (n) S-3 Eligibility. The Company meets the eligibility requirements for use of a Form
S-3 Registration Statement.

          (o) Intellectual Property. The Company owns or possesses sufficient rights to use all
inventions, trade secrets, know-how, trademarks, service marks, trade names, copyrights or other
intellectual property and, to its knowledge, all patent and patent rights (collectively,
“Intellectual Property”), which are necessary to conduct its businesses as currently
conducted, except where the failure to currently own or possess would not reasonably be expected to
result, either individually or in the aggregate, in a Material Adverse Effect. The Company has not
received any written notice of, and has no actual knowledge of, any infringement of or conflict
with asserted rights of others with respect to any Intellectual Property, and to the Company’s
knowledge, none of the patent rights owned or licensed by the Company are unenforceable or invalid.

          (p) Internal Accounting Controls. Except as expressly set forth under Item 9A of the
Company’s Annual Report on Form for the fiscal year ended on April 3, 2005, the Company maintains a
system of internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management’s general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of financial statements in conformity
with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in
accordance with management’s general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.

          (q) No Undisclosed Liabilities. Except as disclosed, reflected or reserved against in
the financial statements and supporting schedules included in the Company’s Quarterly Report on
Form 10-Q for fiscal quarter ended July 3, 2005, to the Company’s knowledge there are no material
liabilities of the Company or any subsidiary, other than liabilities incurred in the ordinary
course of business consistent with past practice since July 3, 2005 or which in the aggregate would
not reasonably be expected to result in a Material Adverse Effect.

          (r) Related Party Transactions. Except as expressly disclosed in the SEC Documents,
the Company has not entered into any agreements, understandings, or proposed transactions between
the Company or any subsidiary, on the one hand, and any of its officers, affiliates or directors,
or any of their affiliates on the other hand that would be required
to be

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disclosed pursuant to Regulation SK, Item 404, as promulgated by the Securities and Exchange
Commission.

     4. REPRESENTATIONS, WARRANTIES AND CERTAIN AGREEMENTS OF THE PURCHASER. Each
Purchaser hereby represents and warrants to the Company severally and not jointly, and agrees that:

          (a) Organization Good Standing and Qualification. The Purchaser has all corporate,
membership or partnership power and authority required to enter into this Agreement and the other
Operative Documents, and to consummate the transactions contemplated hereby and thereby.

          (b) Authorization. The execution of this Agreement has been duly authorized by all
necessary corporate, membership or partnership action on the part of the Purchaser. This Agreement
constitutes the Purchaser’s legal, valid and binding obligation, enforceable in accordance with its
terms, except (a) as may be limited by (i) applicable bankruptcy, insolvency, reorganization or
other laws of general application relating to or affecting the enforcement of creditors’ rights
generally and (ii) the effect of rules of law governing the availability of equitable remedies and
(b) as rights to indemnity or contribution may be limited under federal or state securities laws or
by principles of public policy thereunder.

          (c) Litigation. There is no Action pending against the Purchaser that seeks to
prevent, enjoin, alter or delay the transactions contemplated by this Agreement.

          (d) Purchase for Own Account. The Securities are being acquired for investment for
the Purchaser’s own account, not as a nominee or agent, and not with a view to the public resale or
distribution thereof within the meaning of the Securities Act, without prejudice, however, to such
Purchaser’s right at all times to sell or otherwise dispose of all or any part of such securities
in compliance with applicable federal and state securities laws and as otherwise contemplated by
this Agreement. The Purchaser also represents that it has not been formed for the specific purpose
of acquiring the Securities.

          (e) Investment Experience. The Purchaser understands that the purchase of the
Securities involves substantial risk. The Purchaser has experience as an investor in securities of
companies and acknowledges that it is able to fend for itself, can bear the economic risk of its
investment in the Securities and has such knowledge and experience in financial or business matters
that it is capable of evaluating the merits and risks of this investment in the Securities and
protecting its own interests in connection with this investment.

          (f) Accredited Purchaser Status. The Purchaser is an “accredited investor” within the
meaning of Regulation D promulgated under the Securities Act.

          (g) Reliance Upon Purchaser’s Representations. The Purchaser understands that the
issuance and sale of the Securities to it will not be registered under the Securities Act on the
ground that such issuance and sale will be exempt from registration under the Securities Act

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pursuant to Section 4(2) thereof, and that the Company’s reliance on such exemption is based
on each Purchaser’s representations set forth herein.

          (h) Receipt of Information. The Purchaser has had an opportunity to ask questions and
receive answers from the Company regarding the terms and conditions of the issuance and sale of the
Securities and the business, properties, prospects and financial condition of the Company and to
obtain any additional information requested and has received and considered all information it
deems relevant to make an informed decision to purchase the Securities.

          (i) Restricted Securities. The Purchaser will not sell, offer to sell, assign,
pledge, hypothecate or otherwise transfer any of the Securities unless (i) pursuant to an effective
registration statement under the Securities Act, (ii) such holder provides the Company with an
opinion of counsel, in a generally acceptable form, to the effect that a public sale, assignment or
transfer of the Securities may be made without registration under the Securities Act, or (iii) such
holder provides the Company with reasonable assurances that the Securities can be sold pursuant to
Rule 144 under the Securities Act without any restriction as to the number of securities acquired
as of a particular date that can be immediately sold. Notwithstanding anything to the contrary
contained in the Agreement, the Purchaser may transfer (without restriction and without the need
for an opinion of counsel) the Securities to its affiliates provided that such affiliate is an
“accredited investor” under Regulation D and such affiliate agrees to be bound by the terms and
conditions of the Agreement.

          (j) No Affiliation. The Purchaser represents and warrants that it is not affiliated
with any other Purchaser, that it has not been identified as a party to any group with any other
Investor in any filing with the Securities and Exchange Commission, and that it not otherwise a
member of an identified group that includes any other Investor.

          (k) Legends. The Purchaser agrees that the certificates for the Preferred Stock and
the Common Stock issuable upon exercise of the Warrants shall bear the following legend:

“The securities represented by this certificate have not been registered
under the Securities Act of 1933 or with any state securities commission, and
may not be transferred or disposed of by the holder in the absence of a
registration statement which is effective under the Securities Act of 1933
and applicable state laws and rules, or, unless, immediately prior to the
time set for transfer, such transfer may be effected without violation of the
Securities Act of 1933 and other applicable state laws and rules.”

     In addition, the Purchaser agrees that the Company may place stop transfer orders with its
transfer agents with respect to such certificates. The legend set forth above shall be removed
from the certificates for the Preferred Stock and the Common Stock issuable upon exercise of the
Warrants, (i) following any sale of such Preferred Stock or Common Stock pursuant to Rule 144 or
any effective registration statement, or (ii) if such Preferred Stock or Common Stock is eligible
for sale under Rule 144(k) (and the holder of such Preferred Stock or Common Stock has submitted a
written request for removal of the legend indicating that the holder has complied with the
applicable provisions of Rule 144), or (iii) if such legend is not required under applicable
requirements of the Securities Act (including judicial interpretations and pronouncements issued by
the Staff of the SEC)

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(and the holder of such Preferred Stock or Common Stock has submitted a written request for
removal of the legend indicating that the holder has complied with such judicial interpretation or
pronouncement). Subject to receipt of appropriate certifications, the Company shall cause its
counsel to issue a legal opinion to the Company’s transfer agent promptly upon the occurrence of
any of the events in clauses (i), (ii) or (iii) above to effect the removal of the legend on
certificates for the Preferred Stock or Common Stock. The Company agrees that at such time as such
legend is no longer required under this Section 4(k), it will, no later than three (3) business
days following the delivery by a Purchaser to the Company (attention: Chief Financial Officer) or
the Company’s transfer agent (with a copy to the Company or the transfer agent, as applicable) of a
certificate representing the Preferred Stock or Common Stock issued with a restrictive legend,
deliver or cause to be delivered to such Purchaser a certificate representing such Preferred Stock
or Common Stock that is free from all restrictive and other legends; provided that in the
case of removal of the legend for reasons set forth in clause (ii) above, the holder of such
Preferred Stock or Common Stock has submitted a written request for removal of the legend
indicating that the holder has complied with the applicable provisions of Rule 144. The Company may
not make any notation on its records or give instructions to any transfer agent of the Company that
enlarge the restrictions on transfer set forth in this Section 4(k).

          (l) HSR Compliance.

               (i) Each Purchaser is its own “ultimate parent entity” as defined in the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended or the rules and regulations promulgated thereto
(together, the “HSR Act”).

               (ii) Each Investor will hold less than $50,000,000 in voting securities of the Company
following execution of this Agreement, as valued under the HSR Act.

     5. COMPANY COVENANTS.

          (a) Reporting for Income Tax. The Preferred Stock is intended to be Common Stock for
tax purposes, and the Company intends to report the Preferred Stock for purposes of Section 305 of
the Internal Revenue Code of 1986, as amended (the “Code”).

          (b) Covenant Regarding Dividends. Until the third anniversary of the date on which no
Preferred Stock is outstanding, the Company shall not make any payment or declaration of any
dividend or making of any other distribution on any share of capital stock or other security or
interest in the Corporation other than the Preferred Stock if the effect of such dividend or
distribution could reasonably be expected to (i) cause the right to receive the Liquidation Value
(as defined in the Certificate of Designation) to result in, (ii) cause an increase in the
Liquidation Value to be, (iii) cause the conversion of the Preferred Stock into Common Stock to be
or (iv) make an adjustment of the Conversion Rate (as defined in the Certificate of Designation) a
taxable event to the holders of the Preferred Stock.

          (c) Covenant Regarding Stock Issuance. Until the Closing Date, Company shall not
issue any shares of Common Stock, Series A Convertible Preferred Stock, undesignated Preferred
Stock or securities convertible into or exchangeable or exercisable
for equity securities of the

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Company, except those shares of Common Stock issued pursuant to the Company’s employee stock
purchase plan and equity incentive plan and shares of Common Stock issued upon the exercise or
conversion of options or convertible securities outstanding as of the date hereof.

     6. PURCHASER COVENANT REGARDING SHORT SALE.

          (a) Short Sale Restrictions. Prior to the earlier of (i) the second anniversary of
the issuance of the Preferred Stock and (ii) the time at which all shares of Preferred Stock have
converted into shares of Common Stock, each Purchaser, severally and not jointly, agrees it will
not engage in any short sale transactions (or transactions, including transactions in derivative
securities, having the effect of a short sale) of the Common Stock, as defined in Rule 200(a) of
Regulation SHO under the Exchange Act. For the avoidance of doubt, the parties agree that nothing
herein shall be interpreted to (i) prevent a sale by a Purchaser of the Common Stock now owned or
herein after acquired that does not involve a short sale (including a short sale “against the box”)
or (ii) limit the ability to receive the transaction consideration paid by another person or entity
in connection with an acquisition of the Company by means of any transaction or series of
transactions (including any reorganization, merger, consolidation or share transfer), where the
shareholders of the Company immediately preceding such transaction own, following such transaction,
less than 50% of the voting securities of the Company (a “Change of Control”).

     7. CONDITIONS TO THE PURCHASERS’ OBLIGATIONS AT CLOSING. The obligations of the
Purchasers under Section 2(a) of this Agreement are subject to the fulfillment or waiver, on or
before the Closing, of each of the following conditions:

          (a) Representations and Warranties True. Each of the representations and warranties
of the Company contained in Section 3 shall be true and correct in all material respects on and as
of the date of the date hereof and on and as of the date of the Closing, with the same effect as
though such representations and warranties had been made as of the Closing.

          (b) Performance. The Company shall have performed and complied in all material
respects with all agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing and shall have obtained
all approvals, consents and qualifications necessary to complete the purchase and sale described
herein.

          (c) Compliance Certificate. The Company will have delivered to the Purchasers at the
Closing a certificate signed on its behalf by its Chief Executive Officer or Chief Financial
Officer certifying that the conditions specified in Sections 7(a) and 7(b) hereof have been
fulfilled.

          (d) Securities Exemptions. The offer and sale of the Securities to the Purchasers
pursuant to this Agreement shall be exempt from the registration requirements of the Securities Act
and the registration and/or qualification requirements of all applicable state securities laws.

          (e) Opinion of Company Counsel. The Purchasers will have received an opinion on
behalf of the Company, dated as of the date of the Closing, from Wilson, Sonsini, Goodrich &
Rosati, PC, counsel to the Company, in the form attached as Exhibit B.

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          (f) No Suspension of Trading or Listing of Common Stock. The Common Stock of the
Company (i) shall be designated for quotation or listed on Nasdaq and (ii) shall not have been
suspended from trading on Nasdaq.

          (g) Good Standing Certificates. The Company shall have delivered to the Purchasers a
certificate of the Secretary of State of the State of Delaware, dated as of a date within five days
of the date of the Closing, with respect to the good standing of the Company.

          (h) Secretary’s Certificate. The Company shall have delivered to the Purchasers a
certificate of the Company executed by the Company’s Secretary attaching and certifying to the
truth and correctness of (1) the Certificate of Incorporation, (2) the Bylaws and (3) the
resolutions adopted by the Company’s Board of Directors in connection with the transactions
contemplated by the Operative Documents.

          (i) No Statute or Rule Challenging Transaction. No statute, rule, regulation,
executive order, decree, ruling, injunction, action, proceeding or interpretation by a court,
regulatory body, self-regulatory organization or governmental authority of competent jurisdiction
shall have been enacted, entered, promulgated, or adopted by any court, regulatory body,
self-regulatory organization or governmental authority of competent jurisdiction or the staff of
any of the foregoing, having authority over the matters contemplated hereby which questions the
validity of, or challenges or prohibits the consummation of, any of the transactions contemplated
by this Agreement.

          (j) Closing. The Closing shall occur by no later than November 30, 2005.

          (k) Other Actions. The Company shall have executed such certificates, agreements,
instruments and other documents, and taken such other actions as shall be customary or reasonably
requested by the Purchasers in connection with the transactions contemplated hereby.

     8. CONDITIONS TO THE COMPANY’S OBLIGATIONS AT CLOSING. The obligations of the Company
to the Purchasers under this Agreement are subject to the fulfillment or waiver, on or before the
Closing, of each of the following conditions:

          (a) Representations and Warranties True. The representations and warranties of the
Purchasers contained in Section 4 shall be true and correct in all material respects on and as of
the date hereof and on and as of the date of the Closing with the same effect as though such
representations and warranties had been made as of the Closing.

          (b) Performance. The Purchasers shall have performed and complied in all material
respects with all agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing.

          (c) Securities Exemptions. The offer and sale of the Securities to the Purchasers
pursuant to this Agreement shall be exempt from the registration requirements of the Securities Act
and the registration and/or qualification requirements of all applicable state securities laws.

          (d) Payment of Purchase Price. The Purchasers shall have delivered to the Company
same day funds in full payment of the purchase price as specified in Section 1(b).

-11-

 

          (e) Other Actions. The Purchasers shall have executed such certificates, agreements,
instruments and other documents, and taken such other actions as shall be customary or reasonably
requested by the Company in connection with the transactions contemplated hereby.

     9. MISCELLANEOUS.

          (a) Successors and Assigns. The terms and conditions of this Agreement will inure to
the benefit of and be binding upon the respective successors and permitted assigns of the parties.
The Company may not assign this Agreement or any rights or obligations hereunder without the prior
written consent of each Purchaser; provided, however, that upon any Change of Control, this
Agreement and all rights or obligations hereunder may be assigned by the Company only to the
surviving entity without the prior written consent of the other party or parties. Each Purchaser
may assign or transfer any or all of its rights under this Agreement to an affiliate or an entity
advised by the same management company that advises such Purchaser, provided that such assignee or
transferee agrees in writing to be bound, with respect to the transferred Securities, by Section 6
hereof; whereupon such assignee or transferee shall be deemed to be a “Purchaser” for all purposes
of this Agreement

          (b) Governing Law. This Agreement will be governed by and construed under the
internal laws of the State of Delaware, without reference to principles of conflict of laws or
choice of laws.

          (c) Counterparts. This Agreement may be executed in two or more counterparts, each of
which will be deemed an original, but all of which together will constitute one and the same
instrument.

          (d) Headings. The headings and captions used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this Agreement. All
references in this Agreement to sections, paragraphs, exhibits and schedules will, unless otherwise
provided, refer to sections and paragraphs hereof and exhibits and schedules attached hereto, all
of which exhibits and schedules are incorporated herein by this reference.

          (e) Notices. Any notice required or permitted under this Agreement shall be given in
writing, shall be effective when received, and shall in any event be deemed received and
effectively given upon personal delivery to the party to be notified or three (3) business days
after deposit with the United States Post Office, by registered or certified mail, postage prepaid,
or one (1) business day after deposit with a nationally recognized courier service such as Federal
Express for next business day delivery under circumstances in which such service guarantees next
business day delivery, or one (1) business day after facsimile with copy delivered by registered or
certified mail, in any case, postage prepaid and addressed to the party to be notified at the
address indicated for such party on the signature page hereof or at such other address as the
Purchaser or the Company may designate by giving at least ten (10) days advance written notice
pursuant to this Section 10(e).

          (f) Amendments and Waivers. This Agreement may be amended and the observance of any
term of this Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company and the

-12-

 

holders of Preferred Stock representing at least a majority of the total aggregate number of
Preferred Stock then outstanding. Any amendment or waiver effected in accordance with this Section
10(f) will be binding upon the Purchasers, the Company and their respective successors and assigns.

          (g) Severability. If any provision of this Agreement is held to be unenforceable
under applicable law, such provision will be excluded from this Agreement and the balance of the
Agreement will be interpreted as if such provision were so excluded and will be enforceable in
accordance with its terms.

          (h) Entire Agreement. This Agreement, together with all exhibits and schedules hereto
and thereto constitutes the entire agreement and understanding of the parties with respect to the
subject matter hereof and supersedes any and all prior negotiations, correspondence, agreements,
understandings, duties or obligations between the parties with respect to the subject matter
hereof.

          (i) Further Assurances. From and after the date of this Agreement upon the request of
the Company or the Purchasers, the Company and the Purchasers will execute and deliver such
instruments, documents or other writings, and take such other actions, as may be reasonably
necessary or desirable to confirm and carry out and to effectuate fully the intent and purposes of
this Agreement.

          (j) Meaning of Include and Including. Whenever in this Agreement the word “include”
or “including” is used, it shall be deemed to mean “include, without limitation” or “including,
without limitation,” as the case may be, and the language following “include” or “including” shall
not be deemed to set forth an exhaustive list.

          (k) Fees, Costs and Expenses. The Company and each Purchaser shall each pay their own
expenses in connection with the transactions contemplated by this Agreement; provided, however,
that if the Closing is effected, the Company shall pay Purchasers’ reasonable and out-of-pocket
expenses, including fees of counsel, consultants and accountants, incurred in connection with the
purchase of the Securities and the negotiation, execution and delivery under the Operative
Documents, such expenses not to exceed two hundred thousand dollars ($200,000) in the aggregate.

          (l) Survival. The representations and warranties of the Company and the Purchasers
contained in Sections 3 and 4 of this Agreement shall survive until eighteen (18) months after the
Closing Date.

          (m) No Third Party Rights. This Agreement is intended solely for the benefit of the
parties hereto and their respective successors and permitted assigns and is not intended to confer
any benefits upon, or create any rights in favor of, any person (including, without limitation, any
stockholder or debt holder of the Company) other than the parties hereto.

          (o) Remedies. In addition to being entitled to exercise all rights provided herein or
granted by law, including recovery of damages, each Purchaser and the Company will be entitled to
specific performance under this Agreement. The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of obligations described in the

-13-

 

foregoing sentence and hereby agrees to waive in any action for specific performance of any
such obligation the defense that a remedy at law would be adequate.

[The balance of this page is intentionally left blank.]

-14-

 

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

	 	 	 	 	 
	 	 	THERMA-WAVE, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Boris Lipkin
	 

	 	 	 	 
	 

	 	Name:

Title:
	 	Boris Lipkin

Chief Executive Officer

[PURCHASER SIGNATURE PAGES TO FOLLOW]

[SIGNATURE PAGE TO COMMON STOCK PURCHASE AGREEMENT]

 

 

SIGNATURE PAGE TO

PURCHASE AGREEMENT

DATED AS OF NOVEMBER 18, 2005

BY AND AMONG

THERMA-WAVE, INC.

AND EACH PURCHASER NAMED THEREIN

     The undersigned hereby executes and delivers to Therma-Wave, Inc. the Purchase Agreement (the
“Agreement”) to which this Signature Page is attached effective as of the date of the
Agreement, which Agreement and Signature Page, together with all counterparts of such Agreement and
signature pages of the other Purchasers named in such Agreement, shall constitute one and the same
document in accordance with the terms of such Agreement.

	 	 	 	 	 
	 	 	Number of Units: 5,200
	 
	 	 	 	 
	 	 	North Run Master Fund, LP
	 
	 	 	 	 
	 

	 	By:

By:
	 	North Run GP, LP, its General Partner

North Run Advisors, LLC, its General

Partner
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Thomas B. Ellis
	 

	 	 	 	 
	 

	 	 	 	Thomas B. Ellis, Member
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Todd B. Hammer
	 

	 	 	 	 
	 

	 	 	 	Todd B. Hammer, Member
	 
	 	 	 	 
	 

	 	Address:
	 	North Run Capital, LP

One International Place,

Suite 2401

Boston, MA 02110

[SIGNATURE PAGE TO COMMON STOCK PURCHASE AGREEMENT]

 

 

SIGNATURE PAGE TO

PURCHASE AGREEMENT

DATED AS OF NOVEMBER 18, 2005

BY AND AMONG

THERMA-WAVE, INC.

AND EACH PURCHASER NAMED THEREIN

     The undersigned hereby executes and delivers to Therma-Wave, Inc. the Purchase Agreement (the
“Agreement”) to which this Signature Page is attached effective as of the date of the
Agreement, which Agreement and Signature Page, together with all counterparts of such Agreement and
signature pages of the other Purchasers named in such Agreement, shall constitute one and the same
document in accordance with the terms of such Agreement.

	 	 	 	 	 
	 	 	Number of Units: 4,200
	 
	 	 	 	 
	 	 	Deephaven Relative Value Equity Trading Ltd.
	 
	 	 	 	 
	 

	 	By:
	 	/a/ Colin Smith
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Name:
	 	Colin Smith
	 
	 	 	 	 
	 

	 	Title:
	 	CEO
	 
	 	 	 	 
	 

	 	Address:
	 	130 Cheshire Parkway, Suite 102

Minnetonka, MN 55305

[SIGNATURE PAGE TO COMMON STOCK PURCHASE AGREEMENT]

 

 

SIGNATURE PAGE TO

PURCHASE AGREEMENT

DATED AS OF NOVEMBER 18, 2005

BY AND AMONG

THERMA-WAVE, INC.

AND EACH PURCHASER NAMED THEREIN

     The undersigned hereby executes and delivers to Therma-Wave, Inc. the Purchase Agreement (the
“Agreement”) to which this Signature Page is attached effective as of the date of the
Agreement, which Agreement and Signature Page, together with all counterparts of such Agreement and
signature pages of the other Purchasers named in such Agreement, shall constitute one and the same
document in accordance with the terms of such Agreement.

	 	 	 	 	 
	 	 	Number of Units: 1,000
	 
	 	 	 	 
	 	 	Deephaven Long Short Equity Trading Ltd.
	 
	 	 	 	 
	 

	 	By:
	 	/a/ Colin Smith
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Name:
	 	Colin Smith
	 
	 	 	 	 
	 

	 	Title:
	 	CEO
	 
	 	 	 	 
	 

	 	Address:
	 	130 Cheshire Parkway, Suite 102

Minnetonka, MN 55305

[SIGNATURE PAGE TO COMMON STOCK PURCHASE AGREEMENT]

 

 

Exhibit A

Schedule of Purchasers

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Shares of	 	 	 	 
	 	 	 	 	 	 	Series B	 	 	 	 
	 	 	Number	 	 	Convertible	 	 	Number of	 
	Name of Purchaser	 	of Units	 	 	Preferred Stock	 	 	Warrants	 
	North Run Master Fund, LP
	 	 	5,200	 	 	 	5,200	 	 	 	780,000	 
	One International Place, Suite 2401
	 	 	 	 	 	 	 	 	 	 	 	 
	Boston, MA 02110
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Deephaven Relative Value Equity Trading Ltd.
	 	 	 	 	 	 	 	 	 	 	 	 
	130 Cheshire Parkway, Suite 102
	 	 	4,200	 	 	 	4,200	 	 	 	630,000	 
	Minnetonka, MN 55305
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Deephaven Long Short Equity Trading Ltd.
	 	 	 	 	 	 	 	 	 	 	 	 
	130 Cheshire Parkway, Suite 102
	 	 	1,000	 	 	 	1,000	 	 	 	150,000	 
	Minnetonka, MN 55305
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	TOTAL
	 	 	10,400	 	 	 	10,400	 	 	 	1,560,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 

 

 

Exhibit B

Form of Legal Opinionexv10w2

 

Exhibit 10.2

REGISTRATION RIGHTS AGREEMENT

     THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is dated as of this November 22,
2005, by and between Therma-Wave, Inc., a Delaware corporation (the “Company”), and persons
signatory hereto (each, a “Stockholder” and collectively, the “Stockholders”).

     WHEREAS, the Company and the Stockholders have entered into a Stock Purchase Agreement (the
“Purchase Agreement”) of even date herewith pursuant to which the Company will issue to the
Stockholders an aggregate of ten thousand four hundred (10,400) units, each consisting of (i) one
share of the Company’s Series B Convertible Preferred Stock (the “Shares”) and (ii) one
hundred fifty (150) warrants to purchase of the Company’s common stock (the “Warrants”);
and

     WHEREAS, the Purchase Agreement provides that the Shares and the shares of the Company’s
common stock issuable upon exercise of the Warrants (the “Warrant Shares”) are entitled to
registration rights.

     NOW, THEREFORE, in consideration of the premises in the Purchase Agreement, as an inducement
to the Stockholders to consummate the transactions contemplated by the Purchase Agreement, and for
other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
the Company and the Stockholders hereby covenant and agree with each other as follows:

1. Required Registrations of the Shares.

          1.1 (a) Request for Registration. Subject to the conditions set forth in this
Section 1.1, if the Company shall receive from any Stockholder a written request signed by such
Stockholder that the Company effect any registration with respect to all or a part of the
Registrable Securities (such request shall state the number of shares of Registrable Securities (as
defined below) to be disposed of and the intended methods of disposition of such shares by such
Stockholders), the Company will:

                    (i) promptly give written notice of the proposed registration to all other Stockholders; and

                    (ii) as soon as practicable, file and use its commercially reasonable efforts to effect such
registration on Form S-3 (or any successor form), except if the Company is not then eligible for to
register for resale the Registrable Securities on Form S-3, in which case such registration shall
be on Form S-1 (or any successor form), (including, without limitation, filing post-effective
amendments, appropriate qualifications under applicable blue sky or other state securities laws,
and appropriate compliance with the Securities Act of 1933 (the “Securities Act”)) and to
permit or facilitate the sale and distribution of all or such portion of such Registrable
Securities as are specified in such request, together with all or such portion of the Registrable
Securities of any Stockholder or Stockholders joining in such request as are specified in a written
request received by the Company within ten (10) days after such written notice from the Company is
mailed or delivered.

 

 

               (b) Mandatory Registration Statement. Subject to the conditions set forth in this
Section 1.1, the Company shall be obligated to file prior to the later of (x) sixty (60) days after
the date of this Agreement or (y) December 31, 2005 and use its commercially reasonable efforts to
effect a registration on Form S-3 (including, without limitation, filing post-effective amendments,
appropriate qualifications under applicable blue sky or other state securities laws, and
appropriate compliance with the Securities Act) and to permit or facilitate the resale of all
Registrable Securities. Such registration statement shall be a Shelf Registration Statement (as
defined below) pursuant to Section 1.1(g). The Company shall be obligated to prepare and file
additional Shelf Registration Statements every three years as necessary to allow a shelf
registration statement to continue to be available for the use as required by applicable rules and
regulations of the SEC until the date on which all Shareholders have consummated the sale of all
such Shareholder’s Registrable Securities registered under the Shelf Registration Statement.

               (c) Limitations on Requested Registration. The Company shall not be obligated to
effect, or to take any action to effect, any such registration pursuant to this Section 1.1:

                    (i) In any particular jurisdiction in which the Company would be required to execute a general
consent to service of process in effecting such registration, qualification, or compliance, unless
the Company is already subject to service in such jurisdiction and except as may be required by the
Securities Act;

                    (ii) During the period starting with the date sixty (60) days prior to the Company’s good
faith estimate of the date of filing of, and ending on a date ninety (90) days after the effective
date of, a Company-initiated registration; provided that the Company is actively employing
in good faith commercially reasonable efforts to cause such registration statement to become
effective;

                    (iii) During such time as the Company has an effective Shelf Registration Statement (as
defined below) available for use by the stockholders; or

                    (iv) Within six (6) months of the filing of another registration statement pursuant to this
Section 1.1.

     For purposes of this Agreement, “Registrable Securities” shall mean (i) shares of
Common Stock issued or issuable pursuant to the conversion of the Shares and the Warrant Shares,
and (ii) any Common Stock issued as a dividend or other distribution with respect to or in exchange
for or in replacement of the shares referenced in (i) above; provided, however,
that Registrable Securities shall not include any shares of Common Stock described in clause (i) or
(ii) above that have previously been registered or which have been sold to the public either
pursuant to a registration statement or Rule 144 promulgated by the Securities and Exchange
Commission under the Securities Act (“Rule 144”), or that have been sold in a private
transaction in which the transferor’s rights under this Agreement are not validly assigned in
accordance with this Agreement.

               (d) Deferral. If (i) in the good faith judgment of the Board of Directors of the
Company, the filing of a registration statement covering the Registrable Securities (other than a
registration statement filed pursuant to Section 1.1(b)) would be materially detrimental to the
Company, because such action would (1) materially interfere with a significant acquisition,
corporate

-2-

 

reorganization, or other similar transaction involving the Company; (2) require premature
disclosure of material information that the Company has a bona fide business purpose for preserving
as confidential; or (3) render the Company unable to comply with requirements under the Securities
Act or the Exchange Act of 1934 (the “Exchange Act”), and the Board of Directors of the
Company concludes, as a result, that it is in the best interests of the Company to defer the filing
of such registration statement at such time, and (ii) the Company shall promptly furnish to such
Stockholders a certificate signed by the President and General Counsel, if any, of the Company
stating that in the good faith judgment of the Board of Directors of the Company, it would be
materially detrimental to the Company for such registration statement to be filed in the near
future and that it is, therefore, in the best interests of the Company to defer the filing of such
registration statement, then (in addition to the limitations set forth in Section 1.1(c) above) the
Company shall have the right to defer such filing for a period of not more than ninety (90) days
after receipt of the request of the Stockholders; provided, however, that the Company shall not
defer its obligation in this manner more than once in any twelve-month period; provided further
that the determination of the Company to defer such filing or effectiveness shall be further
confirmed by the Board of Directors at its next meeting, or, it is not so confirmed, such deferral,
if still in effect, shall immediately terminate; provided further that the Company shall not
register any securities for its own account or that of any other stockholder during such ninety
(90) day period other than pursuant to a registration relating solely to employee benefit plans, a
registration relating to the offer and sale of debt securities, a registration relating to a
corporate reorganization or other Rule 145 transaction, or a registration on any registration form
that does not permit secondary sales. The Company shall promptly notify the Stockholders of the
expiration of any period during which it exercised its rights under this Section 1.1(d). The
Company agrees that, in the event it exercises its rights under this Section 1.1(d), it shall,
prior to the expiration of the applicable deferral period, file or update and use its reasonable
best efforts to cause the effectiveness of, as applicable, the applicable deferred registration
statement.

               (e) Other Shares. The registration statement filed pursuant to the request of the
Stockholders may, subject to the provisions of Section 1.1(f), include other shares with respect to
which registration rights have been granted, and may include securities of the Company being sold
for the account of the Company.

               (f) Underwriting. In the event the request to effect a registration specifies such
registration is to be underwritten (including a Shelf Underwritten Offering (defined below)), the
right of any Stockholder to include all or any portion of its Registrable Securities such
registration shall be conditioned upon such Stockholder’s participation in such underwriting and
the inclusion of such Stockholder’s Registrable Securities to the extent provided herein; provided,
however that Stockholders will have the right to initiate only two (2) such underwritten offerings
(including any Shelf Underwritten Offerings). If the Company shall request inclusion in any
registration pursuant to Section 1.1 of securities being sold for its own account, the Stockholders
shall, on behalf of all holders of the Company’s securities, offer to include such securities in
the underwriting and such offer shall be conditioned upon the participation of the Company or such
other persons in such underwriting and the inclusion of the Company’s and such person’s other
securities of the Company and their acceptance of the further applicable provisions of this
Agreement. The Company shall (together with all persons proposing to distribute their securities
through such underwriting) enter into an underwriting agreement in customary form with the
representative of the underwriter or underwriters. The underwriter or underwriters shall be
mutually designated by the Company and a majority in interest of the selling

-3-

 

Stockholders. The
selling Stockholders on whose behalf the Registrable Securities are to be distributed
by such underwriters shall be parties to any such underwriting agreement and the
representations and warranties by, and the other agreements on the part of, the Company to and for
the benefit of such underwriters, shall also be made to and for the benefit of such selling
Stockholders. Such underwriting agreement shall also contain such representations and warranties
by such selling Stockholders and such other terms and provisions as are customarily contained in
underwriting agreements with respect to secondary distributions, when relevant. The Company shall
not require any Holder in any such underwriting agreement or related documents to make any
representations or warranties to or agreements with the Company or the underwriters other than
customary representations, warranties or agreements regarding such Stockholder’s title to
Registrable Securities and any written information provided by the Stockholder to the Company
expressly for inclusion in the related registration statement.

     In connection with the preparation and filing of each registration statement registering
Registrable Securities under the Securities Act pursuant to this Section 1.1(f), the Company shall
make available upon reasonable notice at reasonable times and for reasonable periods for inspection
by each selling Stockholders, by any managing underwriter or underwriters participating in any
disposition to be effected pursuant to such registration statement, and by any attorney, accountant
or other agent retained by any selling Stockholders or any managing underwriter, all pertinent
financial and other records, pertinent corporate documents and properties of the Company, and cause
all of the Company’s officers, directors and employees and the independent public accountants who
have certified the Company’s financial statements to make themselves available to discuss the
business of the Company and to supply all information reasonably requested by any such selling
Stockholders, managing underwriters, attorneys, accountants or agents in connection with such
registration statement as shall be necessary to enable them to exercise their due diligence
responsibility (subject to entry by each such person into customary confidentiality agreements in a
form reasonably acceptable to the Company).

     Notwithstanding any other provision of this Section 1.1, if the underwriters advise the
Company or the selling stockholders that marketing factors require a limitation on the number of
shares to be underwritten, the underwriters may (subject to the limitations set forth below)
include in the offering only that number of such securities, including Registrable Securities,
which the underwriters determine will not jeopardize the success of the offering. The Company
shall so advise all holders of securities requesting registration, and the number of shares of
securities that are entitled to be included in the registration and underwriting shall be
allocated, as follows: (i) first, to the Stockholders requesting to include Registrable Securities
in such registration statement based on the pro rata percentage of Registrable Securities held by
such Stockholders, assuming conversion, (ii) second, to the Company for securities being sold for
its own account and (iii) third, to the other holders of securities of the Company with
registration rights to participate therein distributing their securities through such underwriting
based on the pro rata percentage of securities held by such other holders, assuming conversion.

     If a person who has requested inclusion in such registration as provided above does not agree
to the terms of any such underwriting, such person shall also be excluded therefrom by written
notice from the Company or the underwriter. The Registrable Securities or other securities so
excluded shall also be withdrawn from such registration. If shares are so withdrawn from the
registration and if the number of shares of Registrable Securities to be included in such
registration was previously reduced as a result of marketing factors pursuant to Section 1.1(c),
the Company may then offer to all persons who have

-4-

 

retained the right to include securities in the
registration the right to include additional securities in the
registration in an aggregate amount equal to the number of shares so withdrawn, with such shares to
be allocated among the persons requesting additional inclusion, in the manner set forth above.

               (g) Shelf Registration. Subject to any applicable limitations set forth in this
Section 1.1, any Stockholder shall have the right at any time, and from time to time, to request,
that any registration requested or required under this Section 1.1 (including an underwritten
offering) be a “shelf” registration statement (the “Shelf Registration Statement”), and
that the Company prepare and file with the SEC a Shelf Registration Statement on the appropriate
form for an offering to be made, covering the Registrable Securities requested to be included
therein, on a continuous or delayed basis pursuant to Rule 415 under the Securities Act (or any
successor rule or similar provision then in effect) in the manner or manners designated by the
requesting Stockholders . The Company shall use its reasonable best efforts to have the Shelf
Registration declared effective by the SEC as soon as practicable and to keep such Shelf
Registration Statement continuously effective and free of material misstatements or omissions
(including the preparation and filing of additional Shelf Registration Statements every three years
as necessary to allow a shelf registration statement to continue to be available for the use as
required by applicable rules and regulations of the SEC) until the date on which all Shareholders
have consummated the sale of all such Shareholder’s Registrable Securities registered under the
Shelf Registration Statement. The Company agrees, if necessary, to supplement or amend the Shelf
Registration Statement, as required by the rules, regulations or instructions applicable to the
registration form used by the Company for such Shelf Registration Statement or by the Securities
Act or as otherwise required by this Agreement, and shall use its reasonable best efforts to have
such supplements and amendments declared effective, if required, as soon as practicable after
filing.

               (h) Shelf Underwritten Offering. At any time that a Shelf Registration Statement is
effective, if any Shareholder delivers a notice to the Company stating that it intends to effect an
underwritten offering of Registrable Securities pursuant a take-down from a Shelf Registration
Statement of all or part of its Registrable Securities included by it on the Shelf Registration
Statement (the “Shelf Underwritten Offering”) and stating the aggregate offering price
and/or number of the Registrable Securities to be included in the Shelf Underwritten Offering, then
the Company shall amend or supplement the Shelf Registration Statement as may be necessary in order
to enable such Registrable Securities to be distributed pursuant to the Shelf Underwritten Offering
(taking into account the inclusion of Registrable Securities by any other holders of the Company’s
securities pursuant to Section 1.1(f)).

          1.2 Company Registration.

               (a) Company Registration. If the Company shall determine to register any of its
securities either for its own account or the account of a security holder or holders, other than a
registration pursuant to Sections 1.1, a registration relating solely to employee benefit plans, a
registration relating to the offer and sale of non-convertible debt securities, a registration
relating to a corporate reorganization or other Rule 145 transaction, the Company will:

                    (i) promptly give written notice of the proposed registration to all Stockholders; and

-5-

 

                    (ii) include in such registration (and any related qualification under blue sky laws or other
compliance), except as set forth in Section 1.2(b) below, and in any underwriting involved therein,
all of such Registrable Securities as are specified in a written request or requests made by any
Stockholder or Stockholders received by the Company within ten (10) days after such written notice
from the Company is mailed or delivered. Such written request may specify all or a part of a
Stockholder’s Registrable Securities.

               (b) Underwriting. If the registration of which the Company gives notice is for a
registered public offering involving an underwriting, the Company shall so advise the Stockholders
as a part of the written notice given pursuant to Section 1.2(a)(i). In such event, the right of
any Stockholder to registration pursuant to this Section 1.2 shall be conditioned upon such
Stockholder’s participation in such underwriting and the inclusion of such Stockholder’s
Registrable Securities in the underwriting to the extent provided herein. All Stockholders
proposing to distribute their securities through such underwriting shall (together with the Company
and other holders of securities of the Company with registration rights to participate therein
distributing their securities through such underwriting) enter into an underwriting agreement in
customary form with the representative of the underwriter or underwriters selected by the Company
with customary limitations of liability and indemnity provisions. The selling Stockholders on
whose behalf the Registrable Securities are to be distributed by such underwriters shall be parties
to any such underwriting agreement. Such underwriting agreement shall also contain such
representations and warranties by such selling Stockholders and such other terms and provisions as
are customarily contained in underwriting agreements with respect to secondary distributions, when
relevant. The Company shall not require, nor request or require the applicable underwriters to
require any Holder in any such underwriting agreement or related documents to make any
representations or warranties to or agreements with the Company or the underwriters other than
customary representations, warranties or agreements regarding such Stockholder’s title to
Registrable Securities and any written information provided by the Stockholder to the Company
expressly for inclusion in the related registration statement.

     In connection with the preparation and filing of each registration statement registering
Registrable Securities under the Securities Act pursuant to this Section 1.2(b), the Company shall
make available upon reasonable notice at reasonable times and for reasonable periods for inspection
by each selling Stockholders, by any managing underwriter or underwriters participating in any
disposition to be effected pursuant to such registration statement, and by any attorney, accountant
or other agent retained by any selling Stockholders or any managing underwriter, all pertinent
financial and other records, pertinent corporate documents and properties of the Company, and cause
all of the Company’s officers, directors and employees and the independent public accountants who
have certified the Company’s financial statements to make themselves available to discuss the
business of the Company and to supply all information reasonably requested by any such selling
Stockholders, managing underwriters, attorneys, accountants or agents in connection with such
registration statement as shall be necessary to enable them to exercise their due diligence
responsibility (subject to entry by each such person into customary confidentiality agreements in a
form reasonably acceptable to the Company).

     Notwithstanding any other provision of this Section 1.2, if the underwriters advise the
Company in writing that marketing factors require a limitation on the number of shares to be
underwritten, the underwriters may (subject to the limitations set forth below) exclude all
Registrable Securities from, or

-6-

 

limit the number of Registrable Securities to be included in, the
registration and underwriting. The
Company shall so advise all holders of securities requesting registration, and the number of shares
of securities that are entitled to be included in the registration and underwriting shall be
allocated, as follows: (i) first, to the Company for securities being sold for its own account,
(ii) second, to the Stockholders requesting to include Registrable Securities in such registration
statement based on the pro rata percentage of Registrable Securities held by such Stockholders,
assuming conversion and (iii) third, to the other holders of securities of the Company with
registration rights to participate therein distributing their securities through such underwriting
based on the pro rata percentage of securities held by such other
holders, assuming conversion.

If a person who has requested inclusion in such registration as provided above does not agree to
the terms of any such underwriting, such person shall also be excluded therefrom by written notice
from the Company or the underwriter. The Registrable Securities or other securities so excluded
shall also be withdrawn from such registration. If shares are so withdrawn from the registration
and if the number of shares of Registrable Securities to be included in such registration was
previously reduced as a result of marketing factors pursuant to Section 1.2(b), the Company shall
then offer to all persons who have retained the right to include securities in the registration the
right to include additional securities in the registration in an aggregate amount equal to the
number of shares so withdrawn, with such shares to be allocated among the persons requesting
additional inclusion, in the manner set forth above.

               (c) Right to Terminate Registration. The Company shall have the right to terminate or
withdraw any registration initiated by it under this Section 1.2 prior to the effectiveness of such
registration whether or not any Stockholder has elected to include securities in such registration.

          1.3 Market Standoff. If requested in connection with an underwritten offering by the
Company and an underwriter of Common Stock (or other securities) of the Company, if any, each
selling Stockholder shall not sell or otherwise transfer, make any short sale of, grant any option
for the purchase of, or enter into any hedging or similar transaction with the same economic effect
as a sale, of any Common Stock (or other securities) of the Company held by such Stockholder (other
than those included in the registration) during the ninety (90) day period following the effective
date of a registration statement of the Company filed under the Securities Act; provided that each
such Stockholder shall only be bound so long as each director and executive officer of the Company
is similarly bound. The obligations described in this Section 1.3 shall not apply to a registration
relating solely to employee benefit plans on Form S-l or Form S-8 or similar forms that may be
promulgated in the future, or a registration relating solely to a transaction on Form S-4 or
similar forms that may be promulgated in the future. The Company may impose stop-transfer
instructions and may stamp each such certificate with an appropriate legend with respect to the
shares of Common Stock (or other securities) subject to the foregoing restriction until the end of
such one hundred eighty (180) day period. Each Stockholder agrees to execute a market standoff
agreement with said underwriters in customary form consistent with the provisions of this Section
1.3.

          1.4 Provision of Information. It shall be a condition precedent to the obligations of
the Company to take any action pursuant to this Section 1 that the Stockholders furnish to the
Company such information regarding the Stockholders, the Registrable Securities to be sold by the
Stockholders, and the intended method of disposition of the Registrable Securities as shall be
required to effect the registration of the Registrable Securities.

-7-

 

     2. Registration Procedures. In the case of each registration affected by the Company pursuant
to Section 1, the Company will keep each Stockholder advised in writing as to the initiation of
each registration and as to the completion thereof. At its expense, the Company will as promptly
as possible:

               (a) prepare and file with the Securities and Exchange Commission (“SEC”) such
amendments and supplements to each registration statement and the prospectus used in connection
therewith as may be necessary to keep the registration statement current and effective for a period
of time ending on the earlier of (i) the date on which each Stockholder may sell all the
Registrable Securities then held by the Stockholder without restriction by the volume limitations
of Rule 144(e) of the Securities Act or (ii) such time as all the Registrable Securities included
in the registration statement have been sold by the Stockholders; use its commercially reasonable
efforts to furnish to the lead underwriter or underwriters, if any, and to the Stockholders that
have requested that Registrable Securities be covered by such registration statement, prior to the
filing thereof with the SEC, a copy of the registration statement, and each amendment thereof, and
a copy of any prospectus, and each amendment or supplement thereto (excluding amendments caused by
the filing of a report under the Exchange Act) and shall in good faith consider for inclusion in
each such document all comments as such Stockholders may on a timely basis propose;

               (b) use its commercially reasonable efforts to furnish to the Stockholders such number of
copies of the registration statement, prospectuses and preliminary prospectuses and such other
documents related to the registration statement as the Stockholder may reasonably request, in order
to facilitate the public sale or other disposition of all or any of the Registrable Securities by
the Stockholder, provided, however, that the obligation of the Company to deliver copies of
prospectuses or preliminary prospectuses to the Stockholder shall be subject to the receipt by the
Company of reasonable assurances from the Stockholder that the Stockholder will comply with the
applicable provisions of the Securities Act and of such other securities or blue sky laws as may be
applicable in connection with any use of such prospectuses or preliminary prospectuses; cause
authorized officers of the Company to execute customary certificates as may be reasonably requested
by any selling Stockholder or any underwriter of such Registrable Securities;

               (c) use its commercially reasonable efforts to register or qualify the securities covered by
such registration statement under such state securities or blue sky laws of such jurisdictions as
the Stockholders may reasonably request in writing within twenty (20) days following the original
filing of such registration statement, provided, however, that the Company shall not be required to
qualify to do business or consent to service of process in any jurisdiction in which it is not now
so qualified or has not so consented;

               (d) notify the Stockholders and any underwriter of such Registrable Securities in writing (i)
after it receives notice of the time when the registration statement has become effective or a
supplement to any prospectus forming a part of such registration statement has been filed, (ii) of
the occurrence of any event as a result of which the registration statement or the prospectus
included in such registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were made, not
misleading, (iii) of any request by the SEC or any other regulatory body or other body having
jurisdiction for any amendment of or supplement to any registration statement or other document
relating to such offering, (iv) any request by the SEC that the

-8-

 

Company amend or supplement such registration statement or prospectus, and (v) if for any
other reason it shall be necessary to amend or supplement such registration statement or prospectus
in order to comply with the Securities Act and, in any such case as promptly as reasonably
practicable thereafter, prepare and file with the SEC an amendment or supplement to such
registration statement or prospectus which will correct such statement or omission or effect such
compliance;

               (e) advise the Stockholders promptly after it receives notice or obtains knowledge of the
issuance of any stop order by the SEC delaying or suspending the effectiveness of the registration
statement or of the initiation or threat of any proceeding in any jurisdiction for that purpose;
and it will promptly use its commercially reasonable efforts to prevent the issuance of any stop
order or to obtain its withdrawal at the earliest possible moment if such stop order should be
issued;

               (f) in the event of any underwritten public offering, enter into and perform its obligations
under an underwriting agreement, in usual and customary form, with the underwriter of such
offering;

               (g) use its commercially reasonable efforts to cause all such Registrable Securities covered
by such registration statement to be listed on a national securities exchange or trading system and
each securities exchange and trading system (if any) on which similar securities issued by the
Company are then listed;

               (h) provide a transfer agent and registrar for all Registrable Securities registered pursuant
to this Agreement and provide a CUSIP number for all such Registrable Securities, in each case not
later than the effective date of such registration;

               (i) promptly make available for inspection by the selling Stockholders, any underwriter
participating in any disposition pursuant to such registration statement, and any attorney or
accountant or other agent retained by any such underwriter or selected by the selling Stockholders,
all financial and other records, pertinent corporate documents, and properties of the Company, and
cause the Company’s officers, directors, employees, and independent accountants to supply all
information reasonably requested by any such seller, underwriter, attorney, accountant, or agent in
connection with any such registration statement, provided the disclosure of such information shall
be pursuant to a reasonable confidentiality agreement in customary form;

               (j) use all reasonable efforts to furnish to each Stockholder and to the managing underwriter,
if any, a signed counterpart, addressed to the managing underwriter, if any, of (i) an opinion or
opinions of counsel to the Company and (ii) a comfort letter or comfort letters from the Company’s
independent public accountants, each in customary form and covering such matters of the type
customarily covered by opinions or comfort letters, as the case may be, as each such Stockholders
and the managing underwriter, if any, reasonably requests;

               (k) to the extent reasonably requested by the lead or managing underwriters in connection with
an underwritten offering, send appropriate officers of the Company to attend “road shows” scheduled
in reasonable number and at reasonable times in connection with any such underwritten offering with
all out-of-pocket costs and expenses incurred by the Company or such officers in connection with
such attendance to be paid by the Company;

-9-

 

               (l) cooperate with each selling Stockholder and each underwriter or agent, if any,
participating in the disposition of such Registrable Securities and their respective counsel in
connection with any filings required to be made with the National Association of Securities
Dealers, Inc; and

               (m) comply with all applicable rules and regulations of the SEC in all material respects.

     3. Expenses of Registration. All reasonable expenses incurred in effecting the registration
of a registration statement, including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel for the Company, underwriting expenses (other
than fees, commissions or discounts), expenses of any audits incident to or required by any such
registration and expenses of complying with the securities or blue sky laws of any jurisdictions,
and the reasonable fees and expenses of one special counsel to the Stockholders (such fees and
expenses of the special counsel not to exceed $50,000) shall be paid by the Company;
provided, however, that the Company shall not be required to pay for any expenses
of any registration proceeding begun if the registration request is subsequently withdrawn at the
request of the holders of a majority of the Registrable Securities to be registered (in which case
all participating holders shall bear such expenses pro rata among each other based on the number of
Registrable Securities requested to be so registered); provided further that if, at the
time of such withdrawal, such participating holders have learned of a material adverse change in
the condition, business, or prospects of the Company from that known to such participating holders
at the time of their request and have withdrawn the request with reasonable promptness after
learning of such information, then such participating holders shall not be required to pay any of
such expenses and shall not forfeit their right to one registration pursuant to Section
1.1(f).

     4. Transfer of Registrable Securities; Suspension. The Stockholders agree that they will not
offer to sell or make any sale, assignment, pledge, hypothecation or other transfer with respect to
the Registrable Securities that would constitute a sale within the meaning of the Securities Act
except pursuant to either (i) a registration statement, (ii) Rule 144 or (iii) another exemption
from registration that may be then available, and that they will promptly notify the Company of any
changes in the information set forth in any registration statement after it is prepared regarding
the Stockholder or its plan of distribution to the extent required by applicable law.

               (a) If (i) in the good faith judgment of the Board of Directors of the Company, upon the
happening of an event that renders it advisable to suspend use of the prospectus, because use of
the prospectus would (1) materially interfere with a significant acquisition, corporate
reorganization, or other similar transaction involving the Company; (2) require premature
disclosure of material information that the Company has a bona fide business purpose for preserving
as confidential; or (3) render the Company unable to comply with requirements under the Securities
Act or the Exchange Act, and the Board of Directors of the Company concludes, as a result, that it
is in the best interests of the Company to suspend use of the prospectus at such time, and (ii) the
Company shall promptly furnish to such Stockholders a certificate signed by the President and
General Counsel, if any, of the Company stating that in the good faith judgment of the Board of
Directors of the Company, it would be materially detrimental to the Company for the prospectus to
be used and that it is, therefore, in the best interests of the Company to suspend use of the
prospectus (which certificate will not disclose the content of any material non-public information
and will indicate the date of the beginning and end of the intended suspension, if known), then the
Company shall have the right to suspend use of the prospectus for not

-10-

 

greater than thirty (30) consecutive days and not more than twice in any twelve (12) month
period of time, in which case each Stockholder shall discontinue disposition of Registrable
Securities covered by the registration statement or prospectus until copies of a supplemented or
amended prospectus are distributed to the Stockholders or until the Stockholders are advised in
writing by the Company that the use of the applicable prospectus may be resumed. The suspension
and certificate thereof described in this Section 4(a) shall be held in strictest confidence and
not disclosed by the Stockholders.

               (b) Subject to paragraph (c) below, in the event of: (i) any request by the SEC or any other
federal or state governmental authority during the period of effectiveness of any registration
statement for amendments or supplements to a registration statement or related prospectus or for
additional information, (ii) the issuance by the SEC or any other federal or state governmental
authority of any stop order suspending the effectiveness of a registration statement or the
initiation of any proceedings for that purpose, (iii) the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption from qualification of
any of the Registrable Securities for sale in any jurisdiction or the initiation of any proceeding
for such purpose, (iv) any event or circumstance which necessitates the making of any changes in
the registration statement or prospectus, or any document incorporated or deemed to be incorporated
therein by reference, so that, in the case of the registration statement, it will not contain any
untrue statement of a material fact or any omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and that in the case of the
prospectus, it will not contain any untrue statement of a material fact or any omission to state a
material fact required to be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading, then the Company shall
deliver a certificate in writing signed by the President and General Counsel, if any, of the
Company to the Stockholders (the “Suspension Notice”) to the effect of the foregoing (which
notice will not disclose the content of any material non-public information and will indicate the
date of the beginning and end of the intended suspension, if known), then the Company shall have
the right to suspend use of the prospectus and, upon receipt of such Suspension Notice, the
Stockholders will refrain from selling any Registrable Securities pursuant to the registration
statement (a “Suspension”) until the Stockholders’ receipt of copies of a supplemented or
amended prospectus prepared and filed by the Company, or until it is advised in writing by the
Company that the current prospectus may be used, and has received copies of any additional or
supplemental filings that are incorporated or deemed incorporated by reference in any such
prospectus; provided that in the event of any such Suspension, the Company will as promptly
as reasonably practicable cause the use of the prospectus so suspended to be resumed as soon as
possible and, if necessary, prepare and file with the SEC an amendment or supplement to the
registration statement or prospectus to correct any such untrue statement of material fact or
omission. The Suspension and Suspension Notice described in this Section 4(b) shall be held in
strictest confidence and not disclosed by the Stockholders. The Company agrees that, in the event
of any Suspension under this Section 4(b), it shall, prior to the expiration of the applicable
suspension period, update the suspended Shelf registration statement as may be necessary to permit
the Shareholders to resume use thereof in connection with the offer and sale of their Registrable
Securities in accordance with applicable law.

               (c) Provided that a Suspension is not then in effect, the Stockholders may sell Registrable
Securities under the registration statement, provided that the selling Stockholder arranges for
delivery of a current prospectus to the transferee of such Registrable Securities.

-11-

 

               (d) In the event of a sale of Registrable Securities by a Stockholder, such Stockholder must
also deliver to the Company’s transfer agent, with a copy to the Company, a certificate of
subsequent sale reasonably satisfactory to the Company, so that ownership of the Registrable
Securities may be properly transferred.

     5. Indemnification.

               (a) The Company will indemnify and hold harmless each holder of Registrable Securities that
are included in a registration statement pursuant to the provisions of Section 2 hereof, its
directors, officers, agents, investment advisors, partners, members and employees, and any
underwriter (as defined in the Securities Act) for such holder and each person, if any, who
controls such holder and the directors, officers, agents, investment advisors, partners, members
and employees of such controlling person or such underwriter within the meaning of the Securities
Act, from and against, and will reimburse such holder and each such underwriter and controlling
person with respect to, any and all loss, damage, liability, cost and expense to which such holder
or any such underwriter or controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, damages, liabilities, costs or expenses are caused by any untrue
statement or alleged untrue statement of any material fact contained in such registration
statement, any prospectus contained therein or any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading; provided, however, that the Company will not be liable in any such
case to the extent that any such loss, damage, liability, cost or expenses arises out of or is
based upon an untrue statement or alleged untrue statement or omission or alleged omission so made
in conformity with information furnished by or on behalf of such holder, such underwriter or such
controlling person in writing specifically for use in the preparation thereof.

               (b) Each holder of Registrable Securities included in a registration statement pursuant to the
provisions of Section 1 hereof will indemnify and hold harmless the Company, its directors and
officers, any controlling person and any underwriter from and against, and will reimburse the
Company, its directors and officers, any controlling person and any underwriter with respect to,
any and all loss, damage, liability, cost or expense to which the Company or any controlling person
and/or any underwriter may become subject under the Securities Act or otherwise, insofar as such
losses, damages, liabilities, costs or expenses are caused by any untrue statement or alleged
untrue statement of any material fact contained in such registration statement, any prospectus
contained therein or any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in which they were made,
not misleading, in each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was so made in reliance upon information
furnished by or on behalf of such holder specifically for use in the preparation thereof.
Notwithstanding the foregoing, the liability of the Stockholders with respect to losses referred to
in this Section 5(b) shall not exceed the gross proceeds received by the holder from the sale of
the Shares and the Warrant Shares.

               (c) Promptly after receipt by an indemnified party pursuant to the provisions of Sections 5(a)
or 5(b) of notice of the commencement of any action involving the subject matter of the foregoing
indemnity provisions such indemnified party will, if a claim thereof is to be made against the

-12-

 

indemnifying party pursuant to the provisions of said Sections 5(a) or 5(b), promptly notify
the indemnifying party of the commencement thereof; but the omission to so notify the indemnifying
party will not relieve it from any liability that it may have to any indemnified party otherwise
than hereunder. In case such action is brought against any indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying party shall have the right to
participate in, and, to the extent that it may wish, jointly with any other indemnifying party
similarly notified, assume the defense thereof, with counsel satisfactory to such indemnified
party, provided, however, if counsel for the indemnifying party concludes that a single counsel
cannot under applicable legal and ethical considerations represent both the indemnifying party and
the indemnified party, the indemnified party or parties have the right to select separate counsel
to participate in the defense of such action on behalf of such indemnified party or parties. After
notice from the indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified party for any legal
or other expense subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation, unless (i) the indemnified party shall have
employed counsel in accordance with the provisions of the preceding sentence, (ii) the indemnifying
party shall not have employed counsel reasonably satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after the notice of the commencement of the action
or (iii) the indemnifying party has, in its sole discretion, authorized the employment of counsel
for the indemnified party at the expense of the indemnifying party.

     6. Limitations on Subsequent Registration Rights. If the Company at any time grants to any
person or entity any rights to request the Company to effect the registration (whether on demand or
by “piggyback” rights or otherwise) under the Securities Act of any equity securities of the
Company, or securities convertible into or exchangeable for such equity securities on any terms
more favorable to such persons than the rights granted to the Stockholders hereunder, the
Stockholders shall be deemed to be granted such more favorable rights and benefits and this
Agreement shall be deemed amended or supplemented to the extent necessary to grant the Stockholders
such more favorable rights and benefits.

     7. Right of First Refusal to Significant Holders. The Company hereby grants to each
Stockholder, the right of first refusal to purchase its pro rata share of New Securities (as
defined in Section 7(a)) that the Company may, from time to time, propose to sell and issue after
the date of this Agreement. A Stockholder’s pro rata share, for purposes of this right of first
refusal, is equal to the ratio of (a) the number of shares of Common Stock owned by such
Stockholder immediately prior to the issuance of New Securities (assuming full conversion of the
Shares and exercise of all outstanding convertible securities, rights, options and warrants,
directly or indirectly, into Common Stock held by said Stockholder) to (b) the total number of
shares of Common Stock outstanding immediately prior to the issuance of New Securities (assuming
full conversion of the Shares and exercise of all outstanding convertible securities, rights,
options and warrants, directly or indirectly, held by all of the Stockholders).

               (a) “New Securities” shall mean any capital stock (including Common Stock and/or Preferred
Stock) of the Company whether now authorized or not, and rights, convertible securities, options or
warrants to purchase such capital stock, and securities of any type whatsoever that are, or may
become, exercisable or convertible into capital stock; provided that the term “New
Securities” does not include:

-13-

 

                    (i) the Shares, Warrant Shares and the Common Stock into which such Registrable Securities are
convertible or exercisable into;

                    (ii) shares of Common Stock and options, warrants or other rights to purchase Common Stock
issued to employees, officers or directors of, or consultants or advisors to the Company or any
subsidiary pursuant to restricted stock purchase agreements, stock option plans or similar
arrangements;

                    (iii) shares of Common Stock issued upon the exercise or conversion of options or convertible
securities outstanding as of the date of the filing the Certificate of Designation or upon the
exercise or conversion of options or convertible securities referenced in the paragraph above;

                    (iv) shares of Common Stock issued or issuable as a dividend or distribution on Preferred
Stock or pursuant to any event for which adjustment is made pursuant to the Certificate of
Designation;

                    (v) shares of Common Stock issued or issuable pursuant to the acquisition of another
corporation by the Company by merger, purchase of substantially all of the assets or other
reorganization or to a joint venture agreement, provided, that such issuances are approved by the
Board of Directors;

                    (vi) shares of Common Stock issued or issuable to banks, equipment lessors or other financial
institutions pursuant to a debt financing or commercial leasing transaction approved by the Board
of Directors;

                    (vii) shares of Common Stock issued or issuable in connection with any settlement of any
action, suit, proceeding or litigation approved by the Board of Directors;

                    (viii) shares of Common Stock issued or issuable in connection with sponsored research,
collaboration, technology license, development, original equipment manufacturers, marketing or
other similar agreements or strategic partnerships approved by the Board of Directors;

                    (ix) shares of Common Stock issued or issuable to suppliers or third party service providers
in connection with the provision of goods or services pursuant to transactions approved by the
Board of Directors; provided, however, that the aggregate shares of Common Stock issued pursuant to
subsections (vi)-(ix) shall not exceed three hundred thousand (300,000) shares (as adjusted for any
stock dividends, combinations or splits with respect to such shares); and

                    (x) any right, option or warrant to acquire any security convertible into the securities
excluded from the definition of New Securities pursuant to subsections (i) through (x) above.

               (b) In the event the Company proposes to undertake an issuance of New Securities, it shall
give each Stockholder written notice of its intention, describing the type of New Securities, and
their price and the general terms upon which the Company proposes to issue the same. Each
Stockholder shall have ten (10) days after any such notice is mailed or delivered to agree to

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purchase such Stockholder’s pro rata share of such New Securities for the price and upon the terms
specified in the notice by giving written notice to the Company and stating therein the
quantity of New Securities to be purchased.

               (c) In the event the Stockholders fail to exercise fully the right of first refusal within
said ten (10) day period (the “Election Period”), the Company shall have ninety (90) days
thereafter to sell or enter into an agreement (pursuant to which the sale of New Securities covered
thereby shall be closed, if at all, within ninety (90) days from the date of said agreement) to
sell that portion of the New Securities with respect to which the Stockholder’s right of first
refusal option set forth in this Section 7 was not exercised, at a price and upon terms no more
favorable to the purchasers thereof than specified in the Company’s notice to Stockholders
delivered pursuant to Section 7(b). In the event the Company has not sold within such ninety (90)
day period following the Election Period, or such ninety (90) day period following the date of said
agreement, the Company shall not thereafter issue or sell any New Securities, without first again
offering such securities to the Stockholders in the manner provided in this Section 7.

               (d) The right of first refusal granted under this Agreement shall expire upon, and shall not
be applicable at such time all Shares are converted into Common Stock.

     8. Notices. All notices, requests, consents and other communications hereunder shall be in
writing, shall be mailed (A) if within domestic United States by nationally recognized overnight
express courier, postage prepaid, or by facsimile, or (B) if delivered from outside the United
States, by International Federal Express or facsimile, and shall be deemed given (i) if delivered
by first-class registered or certified mail domestic, three business days after so mailed, (ii) if
delivered by nationally recognized overnight carrier, one (1) business day after so mailed, (iii)
if delivered by International Federal Express, two (2) business days after so mailed, (iv) if
delivered by facsimile, upon electric confirmation of receipt and shall be delivered as addressed
as follows:

	 	 	 	 	 
	 	 	(a) if to the Company, to:
	 

	 	 	 	Therma-Wave, Inc.

1250 Reliance Way

Fremont, CA 94539

Attn: Chief Executive Officer

Phone: 510-668-2200

Telecopy: 510-656-3852
	 
	 	 	 	 
	 	 	(b) with a copy mailed to:
	 

	 	 	 	Wilson Sonsini Goodrich & Rosati, PC

650 Page Mill Road

Palo Alto, CA 94304

Attn: Matthew Sonsini

Phone: 650-493-9300

Telecopy: 650-493-6811

                    (c) if to the Stockholder, at the Stockholder’s address on the signature page hereto, or at
such other address or addresses as may have been furnished to the Company in writing.

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     9. Changes. This Agreement may not be modified or amended except pursuant to an instrument in
writing signed by the Company and Stockholders owning at least a majority of the Shares.

     10. Reports Under the Exchange Act. With a view to making available to the Stockholders the
benefits of Rule 144 and any other rule or regulation of the SEC that may at any time permit a
Stockholder to sell securities of the Company to the public without registration or pursuant to a
registration on Form S-3, the Company shall use all reasonable efforts to:

               (a) make and keep public information available, as those terms are understood and defined in
Rule 144;

               (b) file with the SEC in a timely manner all reports and other documents required of the
Company under the Securities Act and the Exchange Act; and

               (c) furnish to any Stockholder, so long as the Stockholder owns any Registrable Securities,
forthwith upon request (i) a written statement by the Company that it has complied with the
reporting requirements of Rule 144, the Securities Act, and the Exchange Act; (ii) a copy of the
most recent annual or quarterly report of the Company and such other reports and documents so filed
by the Company; (iii) such other information as may be reasonably requested in availing any
Stockholder of any rule or regulation of the SEC that permits the selling of any such securities
without registration and (iv) undertake any additional actions reasonably necessary to maintain the
availability of a registration statement, including any successor or substitute forms, or the use
of Rule 144.

     11. Transfer of Registration Rights. The provisions of this Agreement shall be binding upon
and accrue to the benefit of the parties hereto and their respective heirs, successors and
permitted assigns. The Company may not assign this Agreement or any rights or obligations
hereunder without the prior written consent of each Stockholder; provided that upon a Change of
Control, this Agreement and all rights or obligations hereunder may be assigned by the Company only
to the surviving entity without the prior written consent of the other party or parties. A
Stockholder may assign and transfer its rights and obligations hereunder in connection with a
transfer of Shares or Registrable Securities to any affiliate of such Stockholder, any entity
advised by the same management company that advises such Stockholder, any entity that succeeds to
all or substantially all of the asset of the Stockholder or any other party that purchases not less
than five hundred thousand dollars ($500,000) of Shares or Registrable Securities (as valued as of
the closing price immediately preceding the execution of a definitive purchase agreement with
respect to such Shares or Registrable Securities), such assignment to be effective upon receipt by
the Company of a written notice from the transferring Stockholder stating the name and address of
any transferee and identifying the number of Shares or Registrable Securities with respect to which
the rights under this Agreement are being transferred and the nature of the rights so transferred;
provided such assignee or transferee agrees in writing to be bound by the provisions hereof that
apply to such assigning or transferring Stockholder. Upon any such, and each successive,
assignment or transfer to any permitted assignee or transferee in accordance with the terms of this
Section 11, such permitted assignee or transferee shall be deemed to be a “Stockholder” for all
purposes of this Agreement.

     12. Headings. The headings of the various sections of this Agreement have been inserted for
convenience of reference only and shall not be deemed to be part of this Agreement.

-16-

 

     13. Severability. In case any provision contained in this Agreement should be invalid,
illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired thereby.

     14. Governing Law. This Agreement shall be governed by, and construed in accordance with, the
internal laws of the State of Delaware, without giving effect to the principles of conflicts of
law.

     15. Counterparts. This Agreement may be executed in two or more counterparts, each of which
shall constitute an original, but all of which, when taken together, shall constitute but one
instrument, and shall become effective when one or more counterparts have been signed by each party
hereto and delivered to the other parties.

[Signature Page Follows]

-17-

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of
the date first set forth above.

	 	 	 	 	 
	 	 	THERMA-WAVE, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Boris Lipkin
	 

	 	 	 	 
	 

	 	 	 	Name: Boris Lipkin

Title: Chief Executive Officer
	 
	 	 	 	 
	 	 	STOCKHOLDERS:
	 
	 	 	 	 
	 	 	North Run Master Fund, LP
	 
	 	 	 	 
	 

	 	By:

By:
	 	North Run GP, LP, its General Partner

North Run Advisors, LLC, its General Partner
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Thomas B. Ellis
	 

	 	 	 	 
	 

	 	 	 	Thomas B. Ellis, Member
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Todd B. Hammer
	 

	 	 	 	 
	 

	 	 	 	Todd B. Hammer, Member

	 	 	 	 	 
	 

	 	Address:
	 	North Run Capital, LP

One International Place, Suite 2401

Boston, MA 02110
	 
	 	 	 	 
	 	 	Deephaven Relative Value Equity Trading Ltd.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Colin Smith
	 

	 	 	 	 
	 

	 	 	 	Name: Colin Smith

Title: CEO
	 
	 	 	 	 
	 	 	Deephaven Long Short Equity Trading Ltd.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Colin Smith
	 

	 	 	 	 
	 

	 	 	 	Name: Colin Smith
	 

	 	 	 	Title: CEO
	 
	 	 	 	 
	 

	 	Address:
	 	Deephaven Capital Management LLC
	 

	 	 	 	130 Cheshire Parkway, Suite 102
	 

	 	 	 	Minnetonka, MN 55305

[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

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