Document:

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EXHIBIT
10.1

FIRST MODIFICATION TO

LOAN AND SECURITY AGREEMENT

     This First Modification to Loan and Security Agreement (the “First Modification”) is
entered into as of September 30, 2005 by and between Therma-Wave, Inc., a California corporation
(“Borrower”) and Silicon Valley Bank, a California-chartered bank (“Bank”).

1. DESCRIPTION OF EXISTING INDEBTEDNESS. Among other indebtedness which may be owing by
Borrower to Bank, Borrower is indebted to Bank pursuant to that certain Amended and Restated Loan
and Security Agreement dated as of June 10, 2005 (as may be amended from time to time, the “Loan
Agreement”). The Loan Agreement provides for, among other things, a Committed Revolving Line in
the principal amount of up to Fifteen Million Dollars ($15,000,000.00). Capitalized terms used
herein but not otherwise defined herein shall have the respective meanings accorded to them in the
Loan Agreement; provided, that all indebtedness owing by Borrower to Bank under the Loan Agreement
shall be referred to herein as the “Indebtedness.”

2. DESCRIPTION OF COLLATERAL. Repayment of the Indebtedness is secured by the Collateral
as described in the Loan Agreement and herein. Hereinafter, all documents securing repayment of
the Indebtedness, together with all other documents evidencing or securing the Indebtedness, shall
be referred to as the “Existing Loan Documents.”

3. DESCRIPTION OF CHANGES TO THE TERMS OF THE EXISTING LOAN DOCUMENTS.

     3.1 Maturity Date. Section 6.1 of the Loan Agreement is hereby amended and restated
in its entirety to read in full as follows:

This Agreement shall continue in effect until the Term Loan Maturity
Date set forth in Section 1.7 of the Schedule, subject to Section
6.3 below, provided, however that the Domestic Credit Line and EXIM
Credit Line shall terminate on the Maturity Date set forth in
Section 4 of the Schedule, and on that date all Loans outstanding
together with accrued interest and other amounts owed to Bank
thereunder shall become due and payable.

     3.2 Early Termination. Section 6.2 of the Loan Agreement is hereby amended and restated in
its entirety to read in full as follows:

This Agreement may be terminated prior to the Term Loan Maturity
Date as follows: (i) by Borrower, effective three Business Days
after written notice of termination is given to Silicon; or (ii) by
Silicon at any time after the occurrence and during the continuance
of an Event of Default, without notice, effective immediately. If
this Agreement is terminated by Borrower or by Silicon under this
Section 6.2, Borrower shall pay to Silicon a termination fee as
follows: (i) if the termination occurs prior to the Maturity Date
then the amount of the early termination

 

 

fee will equal the sum of (A) either: (y) one percent (1.0%) of the
Credit Limit if the Agreement is terminated on or before June 10,
2006 or (z) one-half of one percent (0.5%) of the Credit Limit if
the Agreement is terminated after June 10, 2006 and before the
Maturity Date plus (B) either: (y) 1.5% of the outstanding
principal amount of the Term Loan at the date of termination, if the
termination occurs on or before September 30, 2007 or (z) 0.5% of
the outstanding principal amount of the Term Loan at the date of
termination, if the termination occurs after September 30, 2007 or
(ii) if the termination occurs after the Maturity Date, then the
amount of the early termination fee will equal to either (1) 1.5% of
the outstanding principal amount of the Term Loan at the date of
termination, if the termination occurs on or before September 30,
2007 or (2) 0.5% of the outstanding principal amount of the Term
Loan at the date of termination, if the termination occurs after
September 30, 2007. Notwithstanding the foregoing, no termination
fee shall be charged if the credit facility hereunder is replaced
with a new facility from another division of Silicon Valley Bank.
The termination fee shall be due and payable on the effective date
of termination and thereafter shall bear interest at a rate equal to
the highest rate applicable to any of the Obligations.

     3.3 Payment of Obligations. Section 6.3 of the Loan Agreement is hereby amended and
restated in its entirety to read in full as follows:

Payment of Obligations. On the Term Loan Maturity Date or on any
earlier effective date of termination, Borrower shall pay and
perform in full all Obligations under this Agreement, whether
evidenced by installment notes or otherwise, and whether or not all
or any part of such Obligations under this Agreement are otherwise
then due and payable. Without limiting the generality of the
foregoing, any amounts due under the Domestic Credit Line or EXIM
Credit Line shall be due and payable on the Maturity Date, or on any
earlier effective date of termination. If on the Maturity Date, or
on any earlier effective date of termination, there are any
outstanding Letters of Credit issued by Silicon or issued by another
institution based upon an application, guarantee, indemnity or
similar agreement on the part of Silicon or outstanding FX Forward
Contracts, then on such date Borrower shall provide to Silicon cash
collateral in an amount equal to 105% of the face amount of all such
Letters of Credit and the FX Reserve plus all interest, fees and
cost due or to become due in connection therewith (as estimated by
Silicon in its good faith business judgment), to secure all of the
Obligations relating to said Letters of Credit or FX Forward
Contracts, pursuant to Silicon’s then standard form cash pledge
agreement. Notwithstanding any termination of this Agreement, all
of Silicon’s security interests in

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all of the Collateral and all of the terms and provisions of this
Agreement shall continue in full force and effect until all
Obligations under this Agreement have been paid and performed in
full; provided that Silicon may, in its sole discretion, refuse to
make any further Loans after termination. No termination shall in
any way affect or impair any right or remedy of Silicon, nor shall
any such termination relieve Borrower of any Obligation hereunder to
Silicon, until all of the Obligations hereunder have been paid and
performed in full. Upon payment and performance in full of all the
Obligations under this Agreement and termination of this Agreement,
Silicon shall promptly terminate its financing statements with
respect to the Borrower and deliver to Borrower such other documents
as may be required to fully terminate Silicon’s security interests.
Silicon agrees to execute and deliver to Borrower from time to time
such Collateral releases as Borrower may request and as are
necessary to give other lenders or lessors that finance the purchase
of Equipment and related software after the date hereof a first
priority Lien in such Equipment and related software so long as the
Liens and Indebtedness incurred with respect thereto are permitted
under this Agreement; provided that Silicon may, in its sole
discretion, refuse to make any further loans after termination.

     3.4 Payment of Obligations. Section 8 of the Loan Agreement is hereby amended by
adding the following definitions in the appropriate alphabetical order:

“ Domestic Credit Line” is the line of credit described in Section
1.1 of the Schedule.

“EXIM Credit Line” is the line of credit described in Section 1.2 of the Schedule.

     3.5 Term Loan. Section 1.7 of Schedule 1 of the Loan Agreement (the “Schedule”) is
hereby added to read in full as follows:

1.7 Term Loan. Bank will make a term loan available to Borrower in
an amount not to exceed $5,000,000 (the “Term Loan”), which shall be
made in a single draw by Borrower no later than September 30, 2005.
Borrower will pay interest on the Term Loan commencing on October
31, 2005, and then on the last day of each month thereafter until
September 30, 2006. Commencing October 31, 2006, Borrower will pay
24 equal installments of principal plus interest, which shall be
payable on the last day of each month until September 30, 2008 (the
“Term Loan Maturity Date”). On the Term Loan Maturity Date, all
principal and interest due on the Term Loan shall be paid in full.

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     3.6 Maximum Outstanding. Section 1.8 of Schedule 1 of the Loan Agreement is hereby
added to read in full as follows:

1.8 Maximum Outstanding. Notwithstanding anything to the contrary
in this Section 1, amounts outstanding under Section 1.1, 1.2 and
1.7 (the “Amounts Outstanding”) shall at no time exceed $15,000,000.
If the Amounts Outstanding exceed $15,000,000 at any time, it will
be considered an Overadvance and Borrower must immediately pay Bank
the excess. Without limiting Borrower’s obligation to repay Bank
the amount of such Overadvance, Borrower agrees to pay Bank interest
on the outstanding amount of any Overadvance, on demand, at the
Default Rate.

     3.7 Interest. Section 2.4 of the Schedule is hereby added to read in full as follows:

2.4 Interest Rate for the Term Loan. A rate equal to the “Prime
Rate” in effect from time to time, plus 2.5 percentage points.

     3.8 Term Loan Fee. Section 3.4 of the Schedule is hereby added to read in full as
follows:

3.4 Term Loan Fee. Borrower shall pay to Bank a Term Loan Fee in
the amount of $25,000.00 the date the Term Loan is made. The Term
Loan Fee is fully earned upon payment and is non-refundable. The
good faith deposit of $15,000 which Borrower paid to Bank shall be
credited against the Term Loan Fee.

     3.9 Financial Covenants.

     (a) Section 5.2 of the Schedule is hereby amended and restated to read in full as follows:

5.2 Minimum Tangible Net Worth. Borrower shall maintain a Tangible
Net Worth of not less than (1) $16,000,000 for the month ended
August 31, 2005; (2) $22,750,000 for the month ended September 30,
2005; (3) $19,750,000 for the months ended October 31, 2005 through
December 31, 2005; and (4) $17,750,000 thereafter, plus (i) 50% of
all consideration received after the date hereof for equity
securities and subordinated debt of the Borrower, plus (ii) 25% of
the Borrower’s net income in each fiscal quarter ending after the
date hereof. Increases in the Minimum Tangible Net Worth covenant
based on consideration received for equity securities and
subordinated debt of the Borrower shall be effective as of the end
of the month in which such consideration is received, and shall
continue effective thereafter. Increases in the Minimum Tangible Net
Worth covenant based on net income shall be effective on the last
day of the fiscal quarter in which said net income is realized, and
shall continue

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effective thereafter. In no event shall the Minimum Tangible Net
Worth covenant be decreased.

(b) Section 5.4 of the Schedule is hereby added to read in full as follows:

5.4 Minimum Liquidity Ratio. Borrower shall maintain a Minimum
Liquidity Ratio of at least 2.0 to 1.0 at all times, tested weekly.
Minimum Liquidity Ratio is calculated as (i) unrestricted cash and
cash equivalents held at the Bank plus availability under the
Domestic Credit Line and EXIM Credit Line divided by
(ii) the outstanding amount of the Term Loan.

4. AMENDMENT TO STREAMLINE FACILITY AGREEMENT. The second paragraph of the Streamline
Facility Agreement, dated June 10, 2005, between Borrower and Bank (the “Streamline Agreement”), is
hereby amended and restated to read in full as follows:

“This will confirm the agreement of Silicon and Borrower that the
following provisions shall apply, effective from and after the date
hereof, so long as: (i) no Default or Event of Default has occurred
and is continuing; (ii) Borrower is not in breach of its obligations
under this Agreement; and (iii) either: (1) there are no Obligations
outstanding with respect to the Domestic Credit Line of the EXIM
Credit Line (but without taking into account outstanding Letters of
Credit) or (2) outstanding Letters of Credit do not exceed
$3,500,000 in the aggregate (such application of the following
provisions is referred to as the “Streamline Option”):

5. AMENDMENT TO STREAMLINE FACILITY AGREEMENT. Section 2 of the Streamline Agreement is
hereby amended and restated to read in full as follows:

Daily Delivery of Proceeds of Accounts Not Required.
Notwithstanding anything in this Agreement to the contrary, so long
as (i) there are no extensions of credit (other than Letters of
Credit) under either of the Domestic Credit Line or the EXIM Credit
Line or (ii) outstanding Letters of Credit do not exceed $3,500,000
in the aggregate, Borrower shall not be required to deliver the
proceeds of Accounts to Silicon upon receipt as provided in Section
4.4 of the Loan Agreement; provided that if any Event of Default has
occurred and is continuing, without limiting its other rights and
remedies, Silicon shall have the right to require that all proceeds
of all Accounts be delivered to Silicon upon receipt and in the form
received.

6. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever necessary
to reflect the changes described in Section 3 hereof.

7. NO DEFENSES OF BORROWER. Borrower agrees that, as of the date hereof, it has no
defenses against the obligations to pay any amounts of the Indebtedness.

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8. CONTINUING VALIDITY. Borrower understands and agrees that, in modifying the Existing
Loan Documents, Bank is relying upon Borrower’s representations, warranties and agreements, all as
set forth in the Existing Loan Documents. Except as expressly modified pursuant to this First
Modification, the terms of the Existing Loan Documents remain unchanged and in full force and
effect, and hereafter the Existing Loan Documents shall include the terms of this First
Modification as if set forth therein in full. Bank’s agreement to modifications to the Existing
Loan Documents pursuant to this First Modification shall in no way obligate Bank to make any future
modifications to the Existing Loan Documents. Nothing in this First Modification shall constitute
a satisfaction of the Indebtedness or any portion thereof. It is the intention of Bank and
Borrower to retain Borrower as the liable party under the Existing Loan Documents, and Borrower is
not released by virtue of this First Modification. The terms of this paragraph apply not only to
this First Modification, but also to all subsequent loan modification agreements.

9. CONDITION PRECEDENT TO EFFECTIVENESS. Before this First Modification, (and Bank’s and
Borrower’s respective rights and obligations hereunder) shall be effective, Borrower shall have (i)
paid to Bank all Bank Expenses incurred by Bank in connection with its entering into this First
Modification and (ii) deliver a warrant to Bank for its capital stock in form and substance
satisfactory to Bank.

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IN WITNESS WHEREOF, each of the parties hereto has caused its duly authorized representative to
execute and deliver this First Modification as of the date first set forth above.

	 	 	 	 	 
	BORROWER:

	 	BANK:	 	 
	 
	 	 	 	 
	THERMA-WAVE, INC.,

	 	SILICON VALLEY BANK,	 	 
	a Delaware corporation

	 	a California-chartered bank	 	 
	 
	 	 	 	 
	By: /s/ Boris Lipkin

	 	By: /s/ Tim Walsh	 	 
	 

Name: Boris Lipkin

	 	 

Name: Tim Walsh
	 	 
	Title: President & Chief Executive Officer

	 	Title: Senior Relationship Manager	 	 

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EXHIBIT 10.2

THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AND PURSUANT
TO THE PROVISIONS OF ARTICLE 5 BELOW, MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAW OR, IN
THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES,
SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM REGISTRATION.

WARRANT TO PURCHASE STOCK

Company: Therma-Wave, Inc., a Delaware corporation

Number of Shares: 115,000

Class of Stock: Common

Warrant Price: $1.71

Issue Date: Is the Warrant Effective Date, which is the date in which the Holder executes this

Warrant

Expiration Date: The 5th anniversary after the Issue Date

     THIS WARRANT CERTIFIES THAT, for the agreed upon value of $1.00 and for other good and
valuable consideration, SILICON VALLEY BANK (“Holder”) is entitled to purchase the number of fully
paid and nonassessable shares of the class of securities (the “Shares”) of the company (the
“Company”) at the Warrant Price, all as set forth above and as adjusted pursuant to Article 2 of
this Warrant, subject to the provisions and upon the terms and conditions set forth in this
Warrant.

ARTICLE 1 EXERCISE.

     1.1 Method of Exercise. Holder may exercise this Warrant by delivering a duly
executed Notice of Exercise in substantially the form attached as Appendix 1 to the principal
office of the Company. Unless Holder is exercising the conversion right set forth in Article 1.2,
Holder shall also deliver to the Company a check, wire transfer (to an account designated by the
Company), or other form of payment acceptable to the Company for the aggregate Warrant Price for
the Shares being purchased.

     1.2 Conversion Right. In lieu of exercising this Warrant as specified in Article 1.1,
Holder may from time to time convert this Warrant, in whole or in part, into a number of Shares
determined by dividing (a) the aggregate fair market value of the Shares or other securities
otherwise issuable upon exercise of this Warrant minus the aggregate Warrant Price of such Shares
by (b) the fair market value of one Share. The fair market value of the Shares shall be determined
pursuant to Article 1.3.

     1.3 Fair Market Value. If the Company’s common stock is traded in a public market and
the Shares are common stock, the fair market value of each Share shall be the closing price of a
Share reported for the business day immediately before Holder delivers its Notice of

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Exercise to the Company. If the Company’s common stock is not traded in a public market, the
Board of Directors of the Company shall determine fair market value in its reasonable good faith
judgment.

     1.4 Delivery of Certificate and New Warrant. Promptly after Holder exercises or
converts this Warrant and, if applicable, the Company receives payment of the aggregate Warrant
Price, the Company shall deliver to Holder certificates for the Shares acquired and, if this
Warrant has not been fully exercised or converted and has not expired, a new Warrant representing
the Shares not so acquired.

     1.5 Replacement of Warrants. On receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss,
theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and
amount to the Company or, in the case of mutilation on surrender and cancellation of this Warrant,
the Company shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor.

     1.6 Treatment of Warrant Upon Acquisition of Company.

          1.6.1 “Acquisition”. For the purpose of this Warrant, “Acquisition” means any sale,
license, or other disposition of all or substantially all of the assets of the Company, or any
reorganization, consolidation, or merger of the Company where the holders of the Company’s
securities before the transaction beneficially own less than 50% of the outstanding voting
securities of the surviving entity after the transaction.

          1.6.2 Treatment of Warrant at Acquisition.

A) Upon the written request of the Company, Holder agrees that, in the event of an Acquisition that
is not an asset sale and in which the sole consideration is cash, either (a) Holder shall exercise
its conversion or purchase right under this Warrant and such exercise will be deemed effective
immediately prior to the consummation of such Acquisition or (b) if Holder elects not to exercise
the Warrant, this Warrant will expire upon the consummation of such Acquisition. The Company shall
provide the Holder with written notice of its request relating to the foregoing (together with such
reasonable information as the Holder may request in connection with such contemplated Acquisition
giving rise to such notice), which is to be delivered to Holder not less than ten (10) days prior
to the closing of the proposed Acquisition.

B) Upon the written request of the Company, Holder agrees that, in the event of an Acquisition that
is an “arms length” sale of all or substantially all of the Company’s assets (and only its assets)
to a third party that is not an Affiliate (as defined below) of the Company (a “True Asset Sale”),
either (a) Holder shall exercise its conversion or purchase right under this Warrant and such
exercise will be deemed effective immediately prior to the consummation of such Acquisition or (b)
if Holder elects not to exercise the Warrant, this Warrant will continue until the Expiration Date
if the Company continues as a going concern following the closing of any such True Asset Sale. The
Company shall provide the Holder with written notice of its request relating to the foregoing
(together with such reasonable information as the Holder may request in connection with such
contemplated Acquisition giving rise to such notice), which is to be delivered to Holder not less
than ten (10) days prior to the closing of the proposed Acquisition.

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C) Upon the closing of any Acquisition other than those particularly described in subsections (A)
and (B) above, the successor entity shall assume the obligations of this Warrant, and this Warrant
shall be exercisable for the same securities, cash, and property as would be payable for the Shares
issuable upon exercise of the unexercised portion of this Warrant as if such Shares were
outstanding on the record date for the Acquisition and subsequent closing. The Warrant Price
and/or number of Shares shall be adjusted accordingly.

As used herein “Affiliate” shall mean any person or entity that owns or controls directly or
indirectly ten (10) percent or more of the stock of Company, any person or entity that controls or
is controlled by or is under common control with such persons or entities, and each of such
person’s or entity’s officers, directors, joint venturers or partners, as applicable.

ARTICLE 2 ADJUSTMENTS TO THE SHARES.

     2.1 Stock Dividends, Splits, Etc. If the Company declares or pays a dividend on the
Shares payable in common stock, or other securities, then upon exercise of this Warrant, for each
Share acquired, Holder shall receive, without cost to Holder, the total number and kind of
securities to which Holder would have been entitled had Holder owned the Shares of record as of the
date the dividend occurred. If the Company subdivides the Shares by reclassification or otherwise
into a greater number of shares or takes any other action which increase the amount of stock into
which the Shares are convertible, the number of shares purchasable hereunder shall be
proportionately increased and the Warrant Price shall be proportionately decreased. If the
outstanding shares are combined or consolidated, by reclassification or otherwise, into a lesser
number of shares, the Warrant Price shall be proportionately increased and the number of Shares
shall be proportionately decreased.

     2.2 Reclassification, Exchange, Combinations or Substitution. Upon any
reclassification, exchange, substitution, or other event that results in a change of the number
and/or class of the securities issuable upon exercise or conversion of this Warrant, Holder shall
be entitled to receive, upon exercise or conversion of this Warrant, the number and kind of
securities and property that Holder would have received for the Shares if this Warrant had been
exercised immediately before such reclassification, exchange, substitution, or other event. The
Company or its successor shall promptly issue to Holder an amendment to this Warrant setting forth
the number and kind of such new securities or other property issuable upon exercise or conversion
of this Warrant as a result of such reclassification, exchange, substitution or other event that
results in a change of the number and/or class of securities issuable upon exercise or conversion
of this Warrant. The amendment to this Warrant shall provide for adjustments which shall be as
nearly equivalent as may be practicable to the adjustments provided for in this Article 2
including, without limitation, adjustments to the Warrant Price and to the number of securities or
property issuable upon exercise of the new Warrant. The provisions of this Article 2.2 shall
similarly apply to successive reclassifications, exchanges, substitutions, or other events.

     2.3 No Impairment. The Company shall not, by amendment of its Certificate of
Incorporation or through a reorganization, transfer of assets, consolidation, merger, dissolution,
issue, or sale of securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed under this Warrant by the Company,
but shall at all times in good faith assist in carrying out of all the provisions of this Article 2
and in taking all such action as may be necessary or appropriate to protect Holder’s rights under
this Article against impairment.

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     2.4 Fractional Shares. No fractional Shares shall be issuable upon exercise or
conversion of this Warrant and the number of Shares to be issued shall be rounded down to the
nearest whole Share. If a fractional share interest arises upon any exercise or conversion of the
Warrant, the Company shall eliminate such fractional share interest by paying Holder the amount
computed by multiplying the fractional interest by the fair market value of a full Share.

     2.5 Certificate as to Adjustments. Upon each adjustment of the Warrant Price, the
Company shall promptly notify Holder in writing, and, at the Company’s expense, promptly compute
such adjustment, and furnish Holder with a certificate of its Chief Financial Officer setting forth
such adjustment and the facts upon which such adjustment is based. The Company shall, upon written
request, furnish Holder a certificate setting forth the Warrant Price in effect upon the date
thereof and the series of adjustments leading to such Warrant Price.

ARTICLE 3 REPRESENTATIONS AND COVENANTS OF THE COMPANY.

     3.1 Representations and Warranties. The Company represents and warrants to the Holder
as follows:

          (a) All Shares which may be issued upon the exercise of the purchase right represented by this
Warrant, and all securities, if any, issuable upon conversion of the Shares, shall, upon issuance,
be duly authorized, validly issued, fully paid and nonassessable, and free of any liens and
encumbrances except for restrictions on transfer provided for herein or under applicable federal
and state securities laws.

     3.2 No Shareholder Rights. Except as provided in this Warrant, the Holder will not
have any rights as a shareholder of the Company until the exercise of this Warrant.

ARTICLE 4 REPRESENTATIONS, WARRANTIES OF THE HOLDER. The Holder represents and warrants to
the Company as follows:

     4.1 Purchase for Own Account. This Warrant and the securities to be acquired upon
exercise of this Warrant by the Holder will be acquired for investment for the Holder’s account,
not as a nominee or agent, and not with a view to the public resale or distribution within the
meaning of the Act. Holder also represents that the Holder has not been formed for the specific
purpose of acquiring this Warrant or the Shares.

     4.2 Disclosure of Information. The Holder has received or has had full access to all
the information it considers necessary or appropriate to make an informed investment decision with
respect to the acquisition of this Warrant and its underlying securities. The Holder further has
had an opportunity to ask questions and receive answers from the Company regarding the terms and
conditions of the offering of this Warrant and its underlying securities and to obtain additional
information (to the extent the Company possessed such information or could acquire it without
unreasonable effort or expense) necessary to verify any information furnished to the Holder or to
which the Holder has access.

     4.3 Investment Experience. The Holder understands that the purchase of this Warrant
and its underlying securities involves substantial risk. The Holder has experience as an investor
in securities and acknowledges that the Holder can bear the economic risk of such Holder’s
investment in this Warrant and its underlying securities and has such knowledge and experience in
financial or business matters that the Holder is capable of evaluating the merits

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and risks of its investment in this Warrant and its underlying securities and/or has a
preexisting personal or business relationship with the Company and certain of its officers,
directors or controlling persons of a nature and duration that enables the Holder to be aware of
the character, business acumen and financial circumstances of such persons.

     4.4 Accredited Investor Status. The Holder is an “accredited investor” within the
meaning of Regulation D promulgated under the Act.

     4.5 The Act. The Holder understands that this Warrant and the Shares issuable upon
exercise or conversion hereof have not been registered under the Act in reliance upon a specific
exemption therefrom, which exemption depends upon, among other things, the bona fide nature of the
Holder’s investment intent as expressed herein. The Holder understands that this Warrant and the
Shares issued upon any exercise or conversion hereof must be held indefinitely unless subsequently
registered under the Act and qualified under applicable state securities laws, or unless exemption
from such registration and qualification are otherwise available.

ARTICLE 5 MISCELLANEOUS.

     5.1 Term. This Warrant is exercisable in whole or in part at any time and from time
to time on or before the Expiration Date.

     5.2 Legends. This Warrant and the Shares (and the securities issuable, directly or
indirectly, upon conversion of the Shares, if any) shall be imprinted with a legend in
substantially the following form:

THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”),
OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AND PURSUANT TO THE
PROVISIONS OF ARTICLE 5 BELOW, MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED
UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAW OR, IN THE
OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE
ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR
HYPOTHECATION IS EXEMPT FROM REGISTRATION.

     5.3 Compliance with Securities Laws on Transfer. This Warrant and the Shares issuable
upon exercise of this Warrant (and the securities issuable, directly or indirectly, upon conversion
of the Shares, if any) may not be transferred or assigned in whole or in part without compliance
with applicable federal and state securities laws by the transferor and the transferee (including,
without limitation, the delivery of investment representation letters and legal opinions reasonably
satisfactory to the Company, as reasonably requested by the Company). The Company shall not
require Holder to provide an opinion of counsel if the transfer is to Holder’s parent company, SVB
Financial Group (formerly Silicon Valley Bancshares), or any other affiliate of Holder.
Additionally, the Company shall also not require an opinion of counsel if there is no material
question as to the availability of current information as referenced in Rule 144(c),

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Holder represents that it has complied with Rule 144(d) and (e) in reasonable detail, the
selling broker represents that it has complied with Rule 144(f), and the Company is provided with a
copy of Holder’s notice of proposed sale.

     5.4 Transfer Procedure. Upon receipt by Holder of the executed Warrant, Holder will
transfer all of this Warrant to Holder’s parent company, SVB Financial Group, by execution of an
Assignment substantially in the form of Appendix 2. Subject to the provisions of Article 5.3 and
upon providing Company with written notice, SVB Financial Group and any subsequent Holder may
transfer all or part of this Warrant or the Shares issuable upon exercise of this Warrant (or the
Shares issuable directly or indirectly, upon conversion of the Shares, if any) to any transferee,
provided, however, in connection with any such transfer, SVB Financial Group or any subsequent
Holder will give the Company notice of the portion of the Warrant being transferred with the name,
address and taxpayer identification number of the transferee and Holder will surrender this Warrant
to the Company for reissuance to the transferee(s) (and Holder if applicable). The Company may
refuse to transfer this Warrant or the Shares to any person who directly competes with the Company.

     5.5 Notices. All notices and other communications from the Company to the Holder, or
vice versa, shall be deemed delivered and effective when given personally or mailed by first-class
registered or certified mail, postage prepaid, at such address as may have been furnished to the
Company or the Holder, as the case may (or on the first business day after transmission by
facsimile) be, in writing by the Company or such Holder from time to time. Effective upon receipt
of the fully executed Warrant and the initial transfer described in Article 5.4 above, all notices
to the Holder shall be addressed as follows until the Company receives notice of a change of
address in connection with a transfer or otherwise:

	 	 	 	 	 
	 

	 	SVB Financial Group	 	 
	 

	 	Attn: Treasury Department	 	 
	 

	 	3003 Tasman Drive, HA 200	 	 
	 

	 	Santa Clara, CA 95054	 	 
	 

	 	Telephone: 408-654-7400	 	 
	 

	 	Facsimile: 408-496-2405	 	 

Notice to the Company shall be addressed as follows until the Holder receives notice of a change in
address:

	 	 	 
	 

	 	Therma-Wave, Inc.
	 

	 	1250 Reliance Way
	 

	 	Fremont, CA 94539
	 

	 	Telephone:
	 

	 	Facsimile:

     5.6 Waiver. This Warrant and any term hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party against which enforcement of such
change, waiver, discharge or termination is sought.

     5.7 Attorney’s Fees. In the event of any dispute between the parties concerning the
terms and provisions of this Warrant, the party prevailing in such dispute shall be entitled to
collect from the other party all costs incurred in such dispute, including reasonable attorney’s
fees.

6

 

     5.8 Automatic Conversion upon Expiration. In the event that, upon the Expiration
Date, the fair market value of one Share (or other security issuable upon the exercise hereof) as
determined in accordance with Section 1.3 above is greater than the Exercise Price in effect on
such date, then this Warrant shall automatically be deemed on and as of such date to be converted
pursuant to Section 1.2 above as to all Shares (or such other securities) for which it shall not
previously have been exercised or converted, and the Company shall promptly deliver a certificate
representing the Shares (or such other securities) issued upon such conversion to the Holder.

     5.9 Counterparts. This Warrant may be executed in counterparts, all of which together
shall constitute one and the same agreement.

7

 

     5.10 Governing Law. This Warrant shall be governed by and construed in accordance with the
laws of the State of California, without giving effect to its principles regarding conflicts of
law.

	 	 	 	 	 	 	 
	THERMA-WAVE, INC.
	 
	 	 
	By:

	 	/s/ Boris Lipkin
	Name:

	 	Boris Lipkin (Print)
	Title:

	 	President & Chief Executive Officer
	 
	 	 
	SILICON VALLEY BANK
	 
	 	 
	By:

	 	/s/ Tim Walsh
	Name:

	 	Tim Walsh (Print)
	Title:

	 	Senior Relationship Manager

Warrant Effective Date: September 30, 2005

8

 

APPENDIX 1

NOTICE OF EXERCISE

     1. Holder elects to purchase                     shares of the Common Stock of                     
pursuant to the terms of the attached Warrant, and tenders payment of the purchase price of the
shares in full.

[or]

     1. Holder elects to convert the attached Warrant into Shares/cash [strike one] in the manner
specified in the Warrant. This conversion is exercised for                                          of the Shares
covered by the Warrant.

[Strike paragraph that does not apply.]

     2. Please issue a certificate or certificates representing the shares in the name specified
below:

	 	 	 	 	 
	 

	 	 	 	 
	 

	 	          Holders Name	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	           (Address)	 	 

     3. By its execution below and for the benefit of the Company, Holder hereby restates each of
the representations and warranties in Article 4 of the Warrant as the date hereof.

	 	 	 	 	 
	 

	 	HOLDER:	 	 
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	 

	 	(Date):	 	 

Appendix 1

 

 

APPENDIX 2

ASSIGNMENT

For value received, Silicon Valley Bank hereby sells, assigns and transfers unto

	 	 	 	 	 
	 

	 	Name:

Address:

Tax ID:
	 	SVB Financial Group

3003 Tasman Drive (HA-200)

Santa Clara, CA 95054

91-1962278

that certain Warrant to Purchase Stock issued by Therma-Wave, Inc. (the “Company”), on September
___, 2005 (the “Warrant”) together with all rights, title and interest therein.

	 	 	 
	 

	 	SILICON VALLEY BANK
	 
	 	 
	 

	 	By:
	 

	 	Name:
	 

	 	Title:

Date:

By its execution below, and for the benefit of the Company, SVB Financial Group makes each of the
representations and warranties set forth in Article 4 of the Warrant and agrees to all other
provisions of the Warrant as of the date hereof.

	 	 	 
	 

	 	SVB FINANCIAL GROUP
	 
	 	 
	 

	 	By:
	 

	 	Name:
	 

	 	Title:

Appendix 2

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