THIS WARRANT AND ANY SHARES OF COMMON STOCK ISSUABLE UPON ITS EXERCISE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR WITH ANY STATE
SECURITY COMMISSION, AND MAY NOT BE TRANSFERRED OR DISPOSED OF BY THE HOLDER IN
THE ABSENSE OF A REGISTRATION STATEMENT WHICH IS EFFECTIVE UNDER THE ACT 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 ACT AND
OTHER APPLICABLE STATE LAWS AND RULES.
WARRANT TO PURCHASE COMMON STOCK
OF
THERMA-WAVE, INC.
November 22, 2005
This is to certify that, FOR VALUE RECEIVED, Deephaven
Relative Value Equity Trading Ltd. or assigns ("Holder"), is entitled to
purchase, subject to the provisions of this Warrant, from Therma-Wave, Inc., a
Delaware corporation ("Company"), Six Hundred Thirty Thousand (630,000) fully
paid, validly issued and nonassessable shares of Common Stock of the Company
("Common Stock") at a price of $1.55 per share (as adjusted from time to time in
accordance with the terms hereof, the "Exercise Price") at any time or from time
to time during the period from May 22, 2006 through November 22, 2010, provided,
however, if either such day is a day on which banking institutions in the State
of California are authorized by law to close, then on the next succeeding day
which shall not be such a day (the "Exercise Period") upon 61 days prior written
notice or upon a Change of Control (as defined below) occurring during the
Exercise Period. This Warrant is one of a series of warrants (collectively, the
"Warrants") originally issued in connection with a private placement of the
Company's common stock pursuant to a Stock Purchase Agreement dated November 18,
2005 (the "Purchase Agreement").
The number of shares of Common Stock to be received upon the
exercise of the Warrants and the Exercise Price may be adjusted from time to
time as hereinafter set forth. The shares of Common Stock deliverable upon such
exercise, and as adjusted from time to time, are hereinafter sometimes referred
to as "Warrant Shares". (a) EXERCISE OF WARRANT. This Warrant may be exercised
in whole or in part at any time or from time to time during the Exercise Period
by presentation and surrender hereof to the Company at its principal office, or
at the office of its stock transfer agent, if any, with the Purchase Form
annexed hereto duly executed and accompanied by payment of the Exercise Price
for the number of Warrant Shares specified in such form, and the date such items
are received by the Company is an "Exercise Date." The Holder shall pay the
Exercise Price (i) in cash, by certified bank check payable to the order of the
Company or by wire transfer of immediately available funds in accordance with
the Company's instructions or (ii) if the Current Market Value (as defined
below) exceeds the Exercise Price, by means of a "cashless exercise", by
presenting and surrendering to the Company this Warrant, in which event the
Company shall issue to the Holder the number of Warrant Shares determined as
follows:
X = Y [(A-B)/A]
where:
X = the number of Warrant Shares to be issued
to the Holder upon such cashless exercise;
Y = the number of Warrant Shares with respect to which
this Warrant is being exercised;
A = the Current Market Value on the Exercise Date; and
B = the Exercise Price.
As soon as practicable after each such exercise of the warrants, and in any
event within three (3) business days thereafter, the Company shall issue and
deliver to the Holder a certificate or certificate for the Warrant Shares
issuable upon such exercise, registered in the name of the Holder or its
designee. If this Warrant should be exercised in part only, the Company shall,
upon surrender of this Warrant for cancellation, execute and deliver a new
Warrant evidencing the rights of the Holder thereof to purchase the balance of
the Warrant Shares purchasable hereunder. Upon receipt by the Company of this
Warrant at its office, or by the stock transfer agent of the Company at its
office, in proper form for exercise, the Holder shall be deemed to be the holder
of record of the shares of Common Stock issuable upon such exercise,
notwithstanding that the stock transfer books of the Company shall then be
closed or that certificates representing such shares of Common Stock shall not
then be physically delivered to the Holder.
(b) RESERVATION OF SHARES. The Company shall at all times reserve, and keep
available, solely for issuance and/or delivery upon exercise of this Warrant
such number of shares of its Common Stock as shall be required for issuance
and delivery upon exercise of the Warrants.
(c) PAYMENT OF TAXES AND EXPENSES. The Company and Holder shall each pay
one-half of any recording, filing, stamp or similar tax which may be
payable in respect of any transfer involved in the issuance of, and the
preparation and delivery of certificates (if applicable) representing,
(i) any Warrant Shares purchased upon exercise of this Warrant and/or
(ii) new or replacement warrants in the Holder's name or the name of
any transferee of all or any portion of this Warrant. (d) FRACTIONAL
SHARES. No fractional shares or script representing fractional shares
shall be issued upon the exercise of this Warrant. With respect to any
fraction of a share called for upon any exercise hereof, the Company
shall pay to the Holder an amount in cash equal to such fraction
multiplied by the "Current Market Value" of a share, determined as
follows:
(1) If the Common Stock is listed on a national securities exchange or
admitted to unlisted trading privileges on such exchange or listed for
trading on the Nasdaq National Market, the Current Market Value shall
be the last reported sale price of the Common Stock on such exchange or
market on the last business day prior to the date of exercise of this
Warrant or if no such sale is made on such day, the average closing bid
and asked prices for such day on such exchange or market; or
(2) If the Common Stock is not so listed or admitted to unlisted trading
privileges, but is traded on the Nasdaq SmallCap Market, the Current
Market Value shall be the closing price for such day on such market and
if the Common Stock is not so traded, the Current Market Value shall be
the mean of the last reported bid and asked prices reported by the
National Quotation Bureau, Inc. on the last business day prior to the
date of the exercise of this Warrant; or
(3) If the Common Stock is not so listed or admitted to unlisted trading
privileges and bid and asked prices are not so reported, the Current
Market Value shall be an amount, not less than book value thereof as at
the end of the most recent fiscal year of the Company ending prior to
the date of the exercise of the Warrant, determined in such reasonable
manner as may be prescribed by the Board of Directors of the Company
(the "Board").
(e) RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof, be
entitled to any rights of a stockholder in the Company, either at law
or equity, and the rights of the Holder are limited to those expressed
in the Warrant and are not enforceable against the Company except to
the extent set forth herein.
(f) ADJUSTMENT PROVISIONS. The Exercise Price in effect at any time and the
number and kind of securities purchasable upon the exercise of the
Warrants shall be subject to adjustment from time to time upon the
happening of certain events as follows:
(1) In case the Company shall (i) declare a dividend or make a distribution
on its outstanding shares of Common Stock in shares of Common Stock,
(ii) subdivide or reclassify its outstanding shares of Common Stock
into a greater number of shares, or (iii) combine or reclassify its
outstanding shares of Common Stock into a smaller number of shares, the
Exercise Price in effect at the time of the record date for such
dividend or distribution or of the effective date of such subdivision,
combination or reclassification shall be adjusted so that it shall
equal the price determined by multiplying the Exercise Price by a
fraction, the denominator of which shall be the number of shares of
Common Stock outstanding after giving effect to such action, and the
numerator of which shall be the number of shares of Common Stock
outstanding immediately prior to such action. Such adjustment shall be
made successively whenever any event listed above shall occur.
(2) Whenever the Exercise Price payable upon exercise of each Warrant is
adjusted pursuant to Subsection (1) above, the number of Shares
purchasable upon exercise of this Warrant shall simultaneously be
adjusted by multiplying the number of Shares initially issuable upon
exercise of this Warrant by the Exercise Price in effect on the date
hereof and dividing the product so obtained by the Exercise Price, as
adjusted.
(3) In the event that at any time, as a result of an adjustment made
pursuant to Subsection (1) above, the Holder of this Warrant thereafter
shall become entitled to receive any shares of the Company, other than
Common Stock, thereafter the number of such other shares so receivable
upon exercise of this Warrant shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as practicable to
the provisions with respect to the Common Stock contained in
Subsections (1) and (2) above.
(4) Irrespective of any adjustments in the Exercise Price or the number or
kind of shares purchasable upon exercise of this Warrant, Warrants
theretofore or thereafter issued may continue to express the same price
and number and kind of shares as are stated in the similar Warrants
initially issuable pursuant to this Agreement.
(5) The Exercise Price may be adjusted from time to time in the same manner
in which adjustments are made to the Conversion Price (as defined in
the Certificate of Designation) in accordance with Section 6C of the
Certificate of Designation of Rights, Preferences and Privileges of the
Series B Convertible Preferred Stock (the "Certificate of
Designation"); provided, however, that in no event shall the Exercise
Price be reduced below $1.40 (as adjusted for any stock dividends,
combinations, reclassifications or splits).
(6) Upon the occurrence of each adjustment pursuant to this
Section (f), the Company will promptly deliver to the Holder a
certificate executed by the Company's Chief Financial Officer setting
forth, in reasonable detail, the event requiring such adjustment and
the method by which such adjustment was calculated, the adjusted
Exercise Price and the adjusted number or type of Warrant Shares or
other securities issuable upon exercise of this Warrant (as
applicable). The Company will retain at its office copies of all such
certificates and cause the same to be available for inspection at said
office during normal business hours by the Holder or any prospective
purchaser of the Warrant designated by the Holder.
(g) RECLASSIFICATION, REORGANIZATION OR MERGER. In case of any reclassification,
capital reorganization or other change of outstanding shares of Common Stock of
the Company, or in case of any consolidation or merger of the Company with or
into another corporation (other than a merger with a subsidiary in which merger
the Company is the continuing corporation and which does not result in any
reclassification, capital reorganization or other change of outstanding shares
of Common Stock of the class issuable upon exercise of this Warrant) or in case
of any sale, lease or conveyance to another corporation of the property of the
Company as an entirety, the Company shall, as a condition precedent to such
transaction, cause effective provisions to be made so that the Holder shall have
the right thereafter by exercising this Warrant at any time prior to the
expiration of the Warrant, to purchase the kind and amount of shares of stock
and other securities and property receivable upon such reclassification, capital
reorganization and other change, consolidation, merger, sale or conveyance by a
holder of the number of shares of Common Stock which might have been purchased
upon exercise of this Warrant immediately prior to such reclassification,
change, consolidation, merger, sale or conveyance. Any such provision shall
include provision for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Warrant. The foregoing
provisions of this Section (g) shall similarly apply to successive
reclassifications, capital reorganizations and changes of shares of Common Stock
and to successive consolidations, mergers, sales or conveyances. In the event
that in connection with any such capital reorganization or reclassification,
consolidation, merger, sale or conveyance, additional shares of Common Stock
shall be issued in exchange, conversion, substitution or payment, in whole or in
part, for a security of the Company other than Common Stock, any such issue
shall be treated as an issue of Common Stock covered by the provisions of
Subsection (1) of Section (f) hereof.
(h) REGISTRATION RIGHTS. The holders of the Warrants and the Warrant Shares or
their transferees shall have the registration rights set forth in the
Registration Rights Agreement dated November 22, 2005 between the Company and
each of the signatories to the Purchase Agreement.
(i) REDEMPTION. In the event of a Change of Control (as defined below) during
the period between the date of issuance of this Warrant and the expiration of
the Exercise Period, prior to such Change of Control, the Company shall give
fifteen (15) days prior written notice of such Change of Control describing in
reasonable detail the material terms and anticipated date of consummation
thereof to the Holder. The Holder may, upon five (5) days prior written notice
at any time thereafter but prior to the Change of Control, at his or her option,
require the Company to repurchase for cash this Warrant, at the election of the
Holder (i) for the amount the Holder would have received in a complete
liquidation occurring immediately prior to the Change of Control of the Company
pursuant to the terms of the Company's Certificate of Incorporation, had this
Warrant been exercised by means of a "cashless exercise" pursuant to Section (a)
immediately prior to such liquidation or (ii) the amount the Holder would have
received if the Holder was permitted to exercise the Warrant by means of a
"cashless exercise" pursuant to Section (a) immediately prior to the Change of
Control. If the Change of Control is a transaction in which the Common Stock of
the Company is being sold for stock or securities of another entity, the Holder
may elect to receive such stock or securities in lieu of cash; provided,
however, under no circumstances may such Holder elect to receive voting
securities in the Company
Any payment of consideration under this Section (i) shall be contingent
upon the actual closing of the Change of Control transaction.
For purposes of this Section (i) and Section (j), "Change of Control"
shall mean any of the events described below:
(1) The occurrence of any event that would, if known to the
Company's management, be required to be reported by the Company under
Item 5.01(a) of Form 8-K pursuant to the Securities Exchange Act of
0000 (xxx "Xxxxxxxx Xxx"); or
(2) The acquisition or receipt, in any manner, by any person
(as defined for purposes of the Exchange Act) or any group of persons
acting in concert, of direct or indirect beneficial ownership (as
defined for purposes of the Exchange Act) of fifty percent (50%) or
more of the combined voting securities ordinarily having the right to
vote for the election of directors of the Company; provided that the
following shall not constitute a Change of Control: (i) any acquisition
directly from the Company; (ii) any acquisition by the Company or any
of its affiliates, or (iii) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Company or any
of its affiliates; or
(3) A change in the constituency of the Board with the result
that individuals (the "Incumbent Directors") who are members of the
Board as of the date of this Warrant cease for any reason to constitute
at least a majority of the Board; provided that any individual who is
elected to the Board after the date of this Warrant and whose
nomination for election was unanimously approved by the Incumbent
Directors shall be considered an Incumbent Director beginning on the
date of his or her election to the Board; or
(4) Consummation of a merger, consolidation or reorganization
involving the Company, unless such merger, consolidation or
reorganization results in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into voting securities
of the surviving entity or parent thereof) more than fifty percent
(50%) of the total voting power represented by the voting securities of
the Company or such surviving entity or parent thereof outstanding
immediately after such merger, consolidation or reorganization; or
(5) A complete liquidation or dissolution of the Company;
(6) A sale, exchange or other disposition or transfer of all
or substantially all of the Company's business or assets, other than
pursuant to a spin-off or comparable transaction in which the
transferee is controlled by the Company or its existing stockholders
immediately prior to such transfer; or
(7) execution of a binding agreement with respect to a
transaction that, if completed, would constitute or result in a Change
of Control.
(j) TERMINATION OF WARRANT. In addition to the termination of this Warrant
pursuant to the second paragraph of Section (i) hereof, this Warrant shall
expire and shall no longer be exercisable on 5:00 p.m., California local time,
on November 22, 2010; provided, however, if either such day is a day on which
banking institutions in the State of California are authorized by law to close,
then on the next succeeding day which shall not be such a day.
(k) MODIFICATIONS AND WAIVERS. The provisions of this Warrant may from time to
time be amended, modified or waived, if such amendment, modification or waiver
is applicable to all of the Warrants and is in writing and consented to by the
Company and the holders of at least a majority of the outstanding Warrants
and Warrant Shares. Any such amendment, modification or waiver shall be binding
upon the holder of this Warrant (and any assignee thereof) regardless of
whether the Holder consented to such amendment, modification or waiver;
provided that nothing shall prevent the Company and a registered holder from
consenting to amendments and modifications to this Warrant which affect or are
applicable to such registered holder only.
(l) ASSIGNMENT. Holder may sell, transfer or assign this Warrant without the
prior written consent of the Company. (m) GOVERNING LAW. This Warrant shall be
governed by and construed under the laws of the State of Delaware (without
giving effect to any conflicts or choice of law provisions thereof that would
cause the application of the domestic substantive laws of any other
jurisdiction).
(n) NOTICES. Any and all notices or other communications or deliveries hereunder
shall be in writing and shall be mailed by a nationally recognized courier
service or delivered (in person or by facsimile), against receipt to the party
to whom such notice or other communication is to be given. The address for such
notices or communications shall be as set forth in the Purchase Agreement
entered into by the Holder and the Company. Any notice or other communication
given by means permitted by this Section (n) shall be deemed given at the time
of receipt thereof.
(o) NO IMPAIRMENT. The Company will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issuance or sale of securities, sale or
other transfer of any of its assets or properties, or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
of this Warrant, but will at all times in good faith assist in the carrying out
of all such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder hereunder against
impairment. Without limiting the generality of the foregoing, the Company (a)
will not increase the par value of any shares of Common Stock receivable upon
the exercise of this Warrant above the amount payable therefor on such exercise,
(b) will take all action that may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares of
Common Stock upon the exercise of this Warrant, and (c) will not close its
shareholder books or records in any manner which interferes with the timely
exercise of this Warrant.
(p) SEVERABILITY. In case any one or more of the provisions contained
in this Warrant shall 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. The parties shall
endeavor in good faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
(q) SECURITIES LAWS. Upon any issuance of Warrant Shares upon exercise
of this Warrant, the Company will be required to comply with the requirements of
(1) the Securities Act, (2) the Exchange Act, as amended, (3) any applicable
listing requirements of any national securities exchange, (4) any state
securities regulation or "Blue Sky" laws, and (5) requirements under any other
law or regulation applicable to the issuance or transfer of such shares. If
required by the Company, in connection with each issuance of Warrant Shares upon
exercise of this Warrant, the Holder will give (x) assurances in writing,
satisfactory to the Company, that such shares are not being purchased with a
view to the distribution thereof in violation of applicable laws, (y) sufficient
representations, warranties and information, in writing, to enable
the Company to rely on exemptions from the registration or qualification
requirements of applicable laws, if available, with respect to such exercise,
and (z) the Holder's cooperation to the Company in connection with such
compliance.
THERMA-WAVE, INC.
By:
----------------------------------------
Name: Xxxxxx Xxxxxxxxxx
----------------------------------------
Title: Chief Financial Officer and Secretary
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[SIGNATURE PAGE TO WARRANT FOR DEEPHAVEN RELATIVE VALUE EQUITY TRADING]
PURCHASE FORM
Dated
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The undersigned hereby irrevocably elects to exercise the
within Warrant to the extent of purchasing shares of Common Stock and hereby
makes payment of $ in payment of the actual exercise price thereof.
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name
------------------------------------------------
(Please typewrite or print in block letters)
Address
------------------------------------
Signature
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ASSIGNMENT FORM
FOR VALUE RECEIVED,
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hereby sells, assigns and transfers unto
Name
------------------------------------------------
(Please typewrite or print in block letters)
Address
------------------------------------
the right to purchase Common Stock represented by this Warrant to the extent of
shares as to which such right is exercisable and does hereby irrevocably
constitute and appoint Attorney, to transfer the same on the books of the
Company with full power of substitution in the premises.
Date
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Signature
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