Semiconductors

This LOAN AND SECURITY AGREEMENT dated June 13, 2003, between SILICON VALLEY BANK ("Bank"), whose address is 3003 Tasman Drive, Santa Clara, California 95054 and THERMA-WAVE, INC., a Delaware corporation ("Borrower"), whose address is 1250 Reliance Way, Fremont, California 94539 provides the terms on which Bank will lend to Borrower and Borrower will repay Bank. The parties agree as follows:

1. ACCOUNTING AND OTHER TERMS.
   
   
   

   Accounting terms not defined in this Agreement will be construed following GAAP. Calculations and determinations must be made following GAAP. The term "financial statements" includes the notes and schedules. The terms "including" and "includes" always mean "including (or includes) without limitation," in this or any Loan Document.

   
   
   
   
2. LOAN AND TERMS OF PAYMENT
   
   
   
   
   

   
   

   1. Credit Extensions.
      
      
      

      Borrower will pay Bank the unpaid principal amount of all Credit Extensions and interest on the unpaid principal amount of the Credit Extensions.

      
      
      
      

      
      

      1. Revolving Advances.
         
         
         
         
         

         
         

         1. Bank will make Advances under the Committed Revolving Line as follows:
            
            
            

            (1) Advances under the Domestic Committed Line not to exceed (X) the lesser of (A) the Domestic Committed Line minus the sum of (x) the aggregate amounts deemed outstanding under the Cash Management Services sublimit described in Section 2.1.4, plus, (y) the amount of all outstanding Letters of Credit (including such drawn but unreimbursed Letters of Credit) booked under the Domestic Committed Line, plus (z) the FX Reserve (arising from FX Forward Contracts booked under the Domestic Committed Line), or (B) the Domestic Borrowing Base minus the sum of (x) the aggregate amounts deemed outstanding under the Cash Management Services sublimit described in Section 2.1.4, plus, (y) the amount of all outstanding domestic Letters of Credit (including such drawn but unreimbursed Letters of Credit) booked under the Domestic Committed Line and (z) the FX Reserve (arising from FX Forward Contracts booked under the Domestic Committed Line); and

            
            

            (2) Advances under the Exim Committed Line not to exceed (X) the lesser of (A) the Exim Committed Line minus the sum of (x) the FX Reserve (arising from FX Forward Contracts booked under the Exim Committed Line), plus, (y) the amount of all outstanding export related Letters of Credit (including such drawn but unreimbursed Letters of Credit) booked under the Exim Committed Line, plus, (z) the Domestic Standby Letter of Credit Reserve or (B) the Exim Borrowing Base minus the sum of (x) the FX Reserve (arising from FX Forward Contracts under the Exim Committed Line), plus, (y) the amount of all outstanding export related Letters of Credit (including such drawn but unreimbursed Letters of Credit) booked under the Exim Committed Line, plus, (z) the Domestic Standby Letter of Credit Reserve. The sum of subparagraphs (x) and (y) are sometimes referred to herein as the "Exim Soft Advances".

            
            

            Amounts borrowed under this Section may be repaid and reborrowed during the term of this Agreement.

            
            
            
            
         2. To obtain an Advance, Borrower must notify Bank by facsimile or telephone by 12:00 noon Pacific time on the Business Day the Advance is to be made. Borrower must promptly confirm the notification by delivering to Bank the Payment/Advance Form attached as Exhibit B and submit copies of Export Orders in connection with any Exim Advance. Bank will credit Advances to Borrower's deposit account. Bank may make Advances under this Agreement based on instructions from a Responsible Officer or his or her designee or without instructions if the Advances are necessary to meet Obligations which have become due. Bank may rely on any telephone notice given by a person whom Bank believes is a Responsible Officer or designee. Borrower will indemnify Bank for any loss Bank suffers due to such reliance, unless such loss is the result of Bank's gross negligence or willful misconduct.
            
            
            
            
            
         3. The Committed Revolving Line terminates on the Revolving Maturity Date, when all Advances are immediately payable.
            

         
         
         
         
      2. Letters of Credit Sublimit.
         
         
         
         
         

         
         

         1. Bank will issue or have issued letters of credit (the "Letters of Credit") as follows:
            
            
            

            (1) Letters of Credit booked under the Domestic Committed Line for Borrower's account not exceeding the lesser of: (i) $5,000,000 and (ii) Availability under the Domestic Committed Line;

            
            

            (2) export related Letters of Credit booked under the Exim Committed Line for Borrower's account not exceed the lesser of (i) $10,000,000 and (ii) Availability under the Exim Committed Line; and

            
            

            (3) Excess Standby Letters of Credit.

            
            
            
            
         2. Each Letter of Credit will have an expiry date of no later than ninety (90) days after the Revolving Maturity Date, but Borrower's reimbursement obligation will be secured by cash on terms acceptable to Bank (provided that Bank agrees that cash equal to 105% of the outstanding letter of credit shall be deemed acceptable) at any time after the Revolving Maturity Date if the term of this Agreement is not extended by Bank. Borrower agrees to execute any further documentation in connection with the Letters of Credit as Bank may reasonably request.
            
            
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