**Exhibit 10.12**
**THERMA-WAVE, INC.**
**FORM OF INDEMNIFICATION AGREEMENT**
     THIS AGREEMENT is entered into, effective as of by and between Therma-Wave, Inc., aDelaware corporation (the “Company”), and (“Indemnitee”).
     WHEREAS, it is essential to the Company to retain and attract as directors and officers themost capable persons available;
     WHEREAS, Indemnitee is a director and/or officer of the Company;
     WHEREAS, both the Company and Indemnitee recognize the increased risk of litigation and otherclaims currently being asserted against directors and officers of corporations;
     WHEREAS, the Certificate of Incorporation permits and Bylaws of the Company require or permit,as the case may be, the Company to indemnify and advance expenses to its directors and officers tothe fullest extent permitted under Delaware law, and the Indemnitee has been serving and continuesto serve as a director and/or officer of the Company in part in reliance on the Company’sCertificate of Incorporation and Bylaws; and
     WHEREAS, in recognition of Indemnitee’s need for (i) substantial protection against personalliability based on Indemnitee’s reliance on the aforesaid Certificate of Incorporation and Bylaws,(ii) specific contractual assurance that the protection promised by the Certificate ofIncorporation and Bylaws will be available to Indemnitee (regardless of, among other things, anyamendment to or revocation of the Certificate of Incorporation and Bylaws or any change in thecomposition of the Company’s Board of Directors or acquisition transaction relating to theCompany), and (iii) an inducement to provide effective services to the Company as a director and/orofficer, the Company wishes to provide in this Agreement for the indemnification of and theadvancing of expenses to Indemnitee to the fullest extent (whether partial or complete) permittedunder Delaware law and as set forth in this Agreement, and, to the extent insurance is maintained,to provide for the continued coverage of Indemnitee under the Company’s directors’ and officers’liability insurance policies.
     NOW, THEREFORE, in consideration of the above premises and of Indemnitee continuing to servethe Company directly or, at its request, with another enterprise, and intending to be legally boundhereby, the parties agree as follows:
     1. Certain Definitions:
          (a) Board: the Board of Directors of the Company.
          (b) Affiliate: any corporation or other person or entity that directly, or indirectlythrough one or more intermediaries, controls or is controlled by, or is under common control with,the person specified.
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          (c) Change in Control: shall be deemed to have occurred if (i) any “person” (as suchterm is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the“Exchange Act”)), other than a trustee or other fiduciary holding securities under an employeebenefit plan of the Company or a corporation owned directly or indirectly by the stockholders ofthe Company in substantially the same proportions as their ownership of stock of the Company, is orbecomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly orindirectly, of securities of the Company representing 30% or more of the total voting powerrepresented by the Company’s then outstanding Voting Securities, or (ii) during any period of twoconsecutive years, individuals who at the beginning of such period constitute the Board and any newdirector whose election by the Board or nomination for election by the Company’s stockholders wasapproved by a vote of at least two-thirds (2/3) of the directors then still in office who eitherwere directors at the beginning of the period or whose election or nomination for election waspreviously so approved, cease for any reason to constitute a majority of the Board, or (iii) thestockholders of the Company approve a merger or consolidation of the Company with any other entity,other than a merger or consolidation that would result in the Voting Securities of the Companyoutstanding immediately prior thereto continuing to represent (either by remaining outstanding orby being converted into Voting Securities of the surviving entity) at least 80% of the total votingpower represented by the Voting Securities of the Company or such surviving entity outstandingimmediately after such merger or consolidation, or (iv) the stockholders of the Company approve aplan of complete liquidation of the Company or an agreement for the sale or disposition by theCompany (in one transaction or a series of transactions) of all or substantially all of theCompany’s assets.
          (d) Expenses: any expense, liability, or loss, including attorneys’ fees, judgments,fines, ERISA excise taxes and penalties, amounts paid or to be paid in settlement, any interest,assessments, or other charges imposed thereon, any federal, state, local, or foreign taxes imposedas a result of the actual or deemed receipt of any payments under this Agreement, and all othercosts and obligations, paid or incurred in connection with investigating, defending, being awitness in, participating in (including on appeal), or preparing for any of the foregoing in, anyProceeding relating to any Indemnifiable Event.
          (e) Indemnifiable Event: any event or occurrence that takes place either prior to orafter the execution of this Agreement, related to the fact that Indemnitee is or was a director orofficer of the Company, or while a director or officer is or was serving at the request of theCompany as a director, officer, employee, trustee, agent, or fiduciary of another foreign ordomestic corporation, partnership, joint venture, employee benefit plan, trust, or otherenterprise, or was a director, officer, employee, or agent of a foreign or domestic corporationthat was a predecessor corporation of the Company or of another enterprise at the request of suchpredecessor corporation, or related to anything done or not done by Indemnitee in any suchcapacity, whether or not the basis of the Proceeding is alleged action in an official capacity as adirector, officer, employee, or agent or in any other capacity while serving as a director,officer, employee, or agent of the Company, as described above.
          (f) Independent Counsel: the person or body appointed in connection with Section 3.
          (g) Proceeding: any threatened, pending, or completed action, suit, or
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proceeding or any alternative dispute resolution mechanism (including an action by or in theright of the Company), or any inquiry, hearing, or investigation, whether conducted by the Companyor any other party, that Indemnitee in good faith believes might lead to the institution of anysuch action, suit, or proceeding, whether civil, criminal, administrative, investigative, or other.
          (h) Reviewing Party: the person or body appointed in accordance with Section 3.
          (i) Voting Securities: any securities of the Company that vote generally in theelection of directors.
     2. Agreement to Indemnify.
          (a) General Agreement. In the event Indemnitee was, is, or becomes a party to orwitness or other participant in, or is threatened to be made a party to or witness or otherparticipant in, a Proceeding by reason of (or arising in part out of) an Indemnifiable Event, theCompany shall indemnify Indemnitee from and against any and all Expenses to the fullest extentpermitted by law, as the same exists or may hereafter be amended or interpreted (but in the case ofany such amendment or interpretation, only to the extent that such amendment or interpretationpermits the Company to provide broader indemnification rights than were permitted prior thereto).The parties hereto intend that this Agreement shall provide for indemnification in excess of thatexpressly permitted by statute, including, without limitation, any indemnification provided by theCompany’s Certificate of Incorporation, its Bylaws, vote of its stockholders or disinteresteddirectors, or applicable law.
          (b) Initiation of Proceeding. Notwithstanding anything in this Agreement to thecontrary, Indemnitee shall not be entitled to indemnification pursuant to this Agreement inconnection with any Proceeding initiated by Indemnitee against the Company or any director orofficer of the Company unless (i) the Company has joined in or the Board has consented to theinitiation of such Proceeding; (ii) the Proceeding is one to enforce indemnification rights underSection 5; or (iii) the Proceeding is instituted after a Change in Control (other than a Change inControl approved by a majority of the directors on the Board who were directors immediately priorto such Change in Control) and Independent Counsel has approved its initiation.
          (c) Expense Advances. If so requested by Indemnitee, the Company shall advance(within ten business days of such request) any and all Expenses incurred by Indemnitee (an “ExpenseAdvance”). The Indemnitee shall qualify for such Expense Advances upon the execution and deliveryto the Company of this Agreement which shall constitute an undertaking providing that theIndemnitee undertakes to repay such Expense Advances if and to the extent that it is ultimatelydetermined by a court of competent jurisdiction in a final judgment, not subject to appeal, thatIndemnitee is not entitled to be indemnified by the Company. Until it is so finally determined bythe court that Indemnitee is not entitled indemnification, Indemnitee shall not be required torepay such Expense Advances to the Company and Indemnitee shall continue to receive ExpenseAdvances pursuant to this section 2(c). Indemnitee’s obligation to reimburse the Company
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for Expense Advances shall be unsecured and no interest shall be charged thereon. To theextent permissible under third party policies, the Company agrees that invoices for ExpenseAdvances shall be billed in the name of and be payable directly by the Company.
          (d) Mandatory Indemnification. Notwithstanding any other provision of this Agreement,to the extent that Indemnitee has been successful on the merits or otherwise in defense of anyProceeding relating in whole or in part to an Indemnifiable Event or in defense of any issue ormatter therein, Indemnitee shall be indemnified against all Expenses incurred in connectiontherewith.
          (e) Partial Indemnification. If Indemnitee is entitled under any provision of thisAgreement to indemnification by the Company for some or a portion of Expenses, but not, however,for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portionthereof to which Indemnitee is entitled. Attorneys’ fees and expenses shall not be prorated butshall be deemed to apply to the portion of indemnification to which Indemnitee is entitled.
          (f) Prohibited Indemnification. No indemnification pursuant to this Agreement shall bepaid by the Company on account of any Proceeding in which judgment is rendered against Indemniteefor an accounting of profits made from the purchase or sale by Indemnitee of securities of theCompany pursuant to the provisions of Section 16(b) of the Exchange Act, or similar provisions ofany federal, state, or local laws; provided, however, that notwithstanding any limitation set forthin this Section 2(f) regarding the Company’s obligation to provide indemnification, Indemniteeshall be entitled under Section 2(c) to receive Expense Advances hereunder with respect to any suchProceeding unless and until a court having jurisdiction over the Proceeding shall have made a finaljudicial determination (as to which all rights of appeal therefrom have been exhausted or lapsed)that Indemnitee has violated said statute.
     3. Reviewing Party. Prior to any Change in Control, the Reviewing Party shall be anyappropriate person or body consisting of a member or members of the Board or any other person orbody appointed by the Board who is not a party to the particular Proceeding with respect to whichIndemnitee is seeking indemnification. With respect to all matters arising after a Change inControl (other than a Change in Control approved by a majority of the directors on the Board whowere directors immediately prior to such Change in Control) concerning the rights of Indemnitee toindemnity payments under this Agreement or any other agreement or under applicable law or theCompany’s Certificate of Incorporation or Bylaws now or hereafter in effect relating toindemnification for Indemnifiable Events, the Reviewing Party, if desired by Indemnitee, shall beIndependent Counsel selected by Indemnitee and approved by the Company (which approval shall not beunreasonably withheld), and who has not otherwise performed services for the Company or theIndemnitee (other than in connection with indemnification matters) within the last three years. TheIndependent Counsel shall not include any person who, under the applicable standards ofprofessional conduct then prevailing, would have a conflict of interest in representing either theCompany or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. Suchcounsel, among other things, shall render its written opinion to the Company and Indemnitee as towhether and to what extent the Indemnitee should be
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permitted to be indemnified under applicable law. The Company agrees to pay the reasonablefees of the Independent Counsel and to indemnify fully such counsel against any and all expenses(including attorneys’ fees), claims, liabilities, loss, and damages arising out of or relating tothis Agreement or the engagement of Independent Counsel pursuant hereto.
     4. Indemnification Process and Appeal.
          (a) Indemnification Payment. Indemnitee shall be entitled to indemnification ofExpenses, and shall receive payment thereof, from the Company in accordance with this Agreement assoon as practicable after Indemnitee has made written demand on the Company for indemnification,unless the Reviewing Party has given a written opinion to the Company that Indemnitee is notentitled to indemnification under Section 145 of the Delaware General Corporation Law.
          (b) Suit to Enforce Rights. Regardless of any action by the Reviewing Party, ifIndemnitee has not received full indemnification within thirty days after making a demand inaccordance with Section 4(a), Indemnitee shall have the right to enforce its indemnification rightsunder this Agreement by commencing litigation in the Court of Chancery of the State of Delawareseeking an initial determination by the court or challenging any determination by the ReviewingParty or any aspect thereof. The Company hereby consents to service of process and to appear in anysuch proceeding. Any determination by the Reviewing Party not challenged by the Indemnitee shall bebinding on the Company and Indemnitee. The remedy provided for in this Section 4 shall be inaddition to any other remedies available to Indemnitee at law or in equity.
          (c) Defense to Indemnification, Burden of Proof, and Presumptions. It shall be adefense to any action brought by Indemnitee against the Company to enforce this Agreement (otherthan an action brought to enforce a claim for Expenses incurred in defending a Proceeding inadvance of its final disposition) that it is not permissible under applicable law for the Companyto indemnify Indemnitee for the amount claimed. In connection with any such action or anydetermination by the Reviewing Party as to whether Indemnitee is entitled to be indemnifiedhereunder, the burden of proving such a defense or determination shall be on the Company toestablish by clear and convincing evidence that Indemnitee is not so entitled to indemnification.It is the parties’ intention that if Indemnitee commences legal proceedings to secure a judicialdetermination that Indemnitee should be indemnified under this Agreement or applicable law, thequestion of Indemnitee’s right to indemnification shall be for the court to decide, and neither thefailure of the Reviewing Party or the Company (including its Board, independent legal counsel, orits stockholders) to have made a determination prior to the commencement of such action byIndemnitee that indemnification of the claimant is proper under the circumstances becauseIndemnitee has met the standard of conduct set forth in applicable law, nor an actual determinationby the Reviewing Party or Company (including its Board, independent legal counsel, or itsstockholders) that the Indemnitee had not met such applicable standard of conduct, shall be adefense to the action or create a presumption that the Indemnitee has not met the applicablestandard of conduct. For purposes of this Agreement, the termination of any claim, action, suit, orproceeding, by judgment, order, settlement (whether with or without court approval), conviction, orupon a plea of nolo contendere, or its equivalent, shall not create a presumption that Indemniteedid not meet any particular standard of conduct or have any particular belief or that a court has
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determined that indemnification is not permitted by applicable law.
     5. Indemnification for Expenses Incurred in Enforcing Rights. The Company shallindemnify Indemnitee against any and all Expenses that are incurred by Indemnitee in connectionwith any action brought by Indemnitee for
          (a) indemnification or advance payment of Expenses by the Company under this Agreement or anyother agreement or under applicable law or the Company’s Certificate of Incorporation or Bylaws nowor hereafter in effect relating to indemnification for Indemnifiable Events, and/or
          (b) recovery under directors’ and officers’ liability insurance policies maintained by theCompany, but only in the event that Indemnitee ultimately is determined to be entitled to suchindemnification or insurance recovery, as the case may be.
          (c) In addition, the Company shall, if so requested by Indemnitee, advance the foregoingExpenses to Indemnitee, subject to and in accordance with Section 2(c).
     6. Notification and Defense of Proceeding.
          (a) Notice. Promptly after receipt by Indemnitee of notice of the commencement of anyProceeding, Indemnitee shall, if a claim in respect thereof is to be made against the Company underthis Agreement, notify the Company of the commencement thereof; but the omission so to notify theCompany will not relieve the Company from any liability that it may have to Indemnitee, except asprovided in Section 6(c).
          (b) Defense. With respect to any Proceeding as to which Indemnitee notifies theCompany of the commencement thereof, the Company will be entitled to participate in the Proceedingat its own expense and except as otherwise provided below, to the extent the Company so wishes, itmay assume the defense thereof with counsel reasonably satisfactory to Indemnitee. After noticefrom the Company to Indemnitee of its election to assume the defense of any Proceeding, the Companyshall not be liable to Indemnitee under this Agreement or otherwise for any Expenses subsequentlyincurred by Indemnitee in connection with the defense of such Proceeding other than reasonablecosts of investigation, transition costs associated with the Company’s assumption of the defense,or as otherwise provided below. Indemnitee shall have the right to employ legal counsel in suchProceeding, but all Expenses related thereto incurred after notice from the Company of itsassumption of the defense shall be at Indemnitee’s expense unless: (i) the employment of legalcounsel by Indemnitee has been authorized by the Company, (ii) Indemnitee has reasonably determinedthat there may be a conflict of interest between Indemnitee and the Company in the defense of theProceeding, (iii) after a Change in Control (other than a Change in Control approved by a majorityof the directors on the Board who were directors immediately prior to such Change in Control), theemployment of counsel by Indemnitee has been approved by the Independent Counsel, or (iv) theCompany shall not in fact have employed counsel to assume the defense of such Proceeding, in eachof which cases all Expenses of the Proceeding shall be borne by the Company. The Company shall notbe entitled to assume the defense of any Proceeding brought by or on behalf of the Company or as towhich Indemnitee shall have made the determination provided for in (ii), (iii)
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and (iv) above.
          (c) Settlement of Claims. The Company shall not be liable to indemnify Indemniteeunder this Agreement or otherwise for any amounts paid in settlement of any Proceeding effectedwithout the Company’s written consent, such consent not to be unreasonably withheld; provided,however, that if a Change in Control has occurred (other than a Change in Control approved by amajority of the directors on the Board who were directors immediately prior to such Change inControl), the Company shall be liable for indemnification of Indemnitee for amounts paid insettlement if the Independent Counsel has approved the settlement. The Company shall not settle anyProceeding in any manner that would impose any penalty or limitation on Indemnitee withoutIndemnitee’s written consent. The Company shall not be liable to indemnify the Indemnitee underthis Agreement with regard to any judicial award if the Company was not given a reasonable andtimely opportunity, at its expense, to participate in the defense of such action; the Company’sliability hereunder shall not be excused if participation in the Proceeding by the Company wasbarred by this Agreement.
     7. Establishment of Trust. In the event of a Change in Control (other than a Change inControl approved by a majority of the directors on the Board who were directors immediately priorto such Change in Control) the Company shall, upon written request by Indemnitee, create a Trustfor the benefit of the Indemnitee and from time to time upon written request of Indemnitee shallfund the Trust in an amount sufficient to satisfy any and all Expenses reasonably anticipated atthe time of each such request to be incurred in connection with investigating, preparing for,participating in, and/or defending any Proceeding relating to an Indemnifiable Event. The amount oramounts to be deposited in the Trust pursuant to the foregoing funding obligation shall bedetermined by the Independent Counsel. The terms of the Trust shall provide that (i) the Trustshall not be revoked or the principal thereof invaded without the written consent of theIndemnitee, (ii) the Trustee shall advance, within ten business days of a request by theIndemnitee, any and all Expenses to the Indemnitee (and the Indemnitee hereby agrees to reimbursethe Trust under the same circumstances for which the Indemnitee would be required to reimburse theCompany under Section 2(c) of this Agreement), (iii) the Trust shall continue to be funded by theCompany in accordance with the funding obligation set forth above, (iv) the Trustee shall promptlypay to the Indemnitee all amounts for which the Indemnitee shall be entitled to indemnificationpursuant to this Agreement or otherwise, and (v) all unexpended funds in the Trust shall revert tothe Company upon a final determination by the Independent Counsel or a court of competentjurisdiction, as the case may be, that the Indemnitee has been fully indemnified under the terms ofthis Agreement. The Trustee shall be chosen by the Indemnitee. Nothing in this Section 7 shallrelieve the Company of any of its obligations under this Agreement. All income earned on the assetsheld in the Trust shall be reported as income by the Company for federal, state, local, and foreigntax purposes. The Company shall pay all costs of establishing and maintaining the Trust and shallindemnify the Trustee against any and all expenses (including attorneys’ fees), claims,liabilities, loss, and damages arising out of or relating to this Agreement or the establishmentand maintenance of the Trust.
     8. Non-Exclusivity. The rights of Indemnitee hereunder shall be in addition to anyother rights Indemnitee may have under the Company’s Certificate of Incorporation, Bylaws,applicable law, or otherwise; provided, however, that this Agreement shall supersede any priorindemnification agreement between the Company and the Indemnitee. To the extent that a
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change in applicable law (whether by statute or judicial decision) permits greaterindemnification than would be afforded currently under the Company’s Certificate of Incorporation,Bylaws, applicable law, or this Agreement, it is the intent of the parties that Indemnitee enjoy bythis Agreement the greater benefits so afforded by such change without any further action by theParties.
     9. Liability Insurance. To the extent the Company maintains an insurance policy orpolicies providing general and/or directors’ and officers’ liability insurance, Indemnitee shall becovered by such policy or policies, in accordance with its or their terms, to the maximum extent ofthe coverage available for any Company director or officer.
     10. Period of Limitations. No legal action shall be brought and no cause of actionshall be asserted by or on behalf of the Company or any Affiliate of the Company againstIndemnitee, Indemnitee’s spouse, heirs, executors, or personal or legal representatives after theexpiration of two years from the date of accrual of such cause of action, or such longer period asmay be required by state law under the circumstances. Any claim or cause of action of the Companyor its Affiliate shall be extinguished and deemed released unless asserted by the timely filing andnotice of a legal action within such period; provided, however, that if any shorter period oflimitations is otherwise applicable to any such cause of action, the shorter period shall govern.
     11. Amendment of this Agreement. No supplement, modification, or amendment of thisAgreement shall be binding unless executed in writing by both of the parties hereto. No waiver ofany of the provisions of this Agreement shall be binding unless in the form of a writing signed bythe party against whom enforcement of the waiver is sought, and no such waiver shall operate as awaiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute acontinuing waiver. Except as specifically provided herein, no failure to exercise or any delay inexercising any right or remedy hereunder shall constitute a waiver thereof.
     12. Subrogation. In the event of payment under this Agreement, the Company shall besubrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shallexecute all papers required and shall do everything that may be necessary to secure such rights,including the execution of such documents necessary to enable the Company effectively to bring suitto enforce such rights.
     13. No Duplication of Payments. The Company shall not be liable under this Agreementto make any payment in connection with any claim made against Indemnitee to the extent Indemniteehas otherwise received payment (under any insurance policy, Bylaw, or otherwise) of the amountsotherwise indemnifiable hereunder.
     14. Binding Effect. This Agreement shall be binding upon and inure to the benefit ofand be enforceable by the parties hereto and their respective successors (including any direct orindirect successor by purchase, merger, consolidation, or otherwise to all or substantially all ofthe business and/or assets of the Company), assigns, spouses, heirs, and personal and legalrepresentatives. The Company shall require and cause any successor (whether direct or indirect bypurchase, merger, consolidation, or otherwise) to all, substantially all, or a substantial part, ofthe business and/or assets of the Company, by
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written agreement in form and substance satisfactory to Indemnitee, expressly to assume andagree to perform this Agreement in the same manner and to the same extent that the Company would berequired to perform if no such succession had taken place. The indemnification provided under thisAgreement shall continue as to Indemnitee for any action taken or not taken while serving in anindemnified capacity pertaining to an Indemnifiable Event even though he may have ceased to servein such capacity at the time of any Proceeding.
     15. Severability. If any provision (or portion thereof) of this Agreement shall beheld by a court of competent jurisdiction to be invalid, void, or otherwise unenforceable, theremaining provisions shall remain enforceable to the fullest extent permitted by law. Furthermore,to the fullest extent possible, the provisions of this Agreement (including, without limitation,each portion of this Agreement containing any provision held to be invalid, void, or otherwiseunenforceable, that is not itself invalid, void, or unenforceable) shall be construed so as to giveeffect to the intent manifested by the provision held invalid, void, or unenforceable.
     16. Governing Law. This Agreement shall be governed by and construed and enforced inaccordance with the laws of the State of Delaware applicable to contracts made and to be performedin such State without giving effect to its principles of conflicts of laws.
     17. Notices. All notices, demands, and other communications required or permittedhereunder shall be made in writing and shall be deemed to have been duly given if delivered byhand, against receipt, or mailed, postage prepaid, certified or registered mail, return receiptrequested, and addressed to the Company at:
Therma-Wave, Inc.