**Exhibit 10.4****REGISTRATION RIGHTS AGREEMENT**     THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is dated as of this November 22,2005, by and between Therma-Wave, Inc., a Delaware corporation (the “Company”), and personssignatory hereto (each, a “Stockholder” and collectively, the “Stockholders”).     WHEREAS, the Company and the Stockholders have entered into a Stock Purchase Agreement (the“Purchase Agreement”) of even date herewith pursuant to which the Company will issue to theStockholders an aggregate of ten thousand four hundred (10,400) units, each consisting of (i) oneshare of the Company’s Series B Convertible Preferred Stock (the “Shares”) and (ii) onehundred fifty (150) warrants to purchase of the Company’s common stock (the “Warrants”);and     WHEREAS, the Purchase Agreement provides that the Shares and the shares of the Company’scommon stock issuable upon exercise of the Warrants (the “Warrant Shares”) are entitled toregistration rights.     NOW, THEREFORE, in consideration of the premises in the Purchase Agreement, as an inducementto the Stockholders to consummate the transactions contemplated by the Purchase Agreement, and forother good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,the Company and the Stockholders hereby covenant and agree with each other as follows:     **1. Required Registrations of the Shares.**          **1.1**(a) Request for Registration. Subject to the conditions set forth in this**Section 1.1**, if the Company shall receive from any Stockholder a written request signed by suchStockholder that the Company effect any registration with respect to all or a part of theRegistrable Securities (such request shall state the number of shares of Registrable Securities (asdefined below) to be disposed of and the intended methods of disposition of such shares by suchStockholders), the Company will:               (i) promptly give written notice of the proposed registration to all other Stockholders; and               (ii) as soon as practicable, file and use its commercially reasonable efforts to effect suchregistration on Form S-3 (or any successor form), except if the Company is not then eligible for toregister for resale the Registrable Securities on Form S-3, in which case such registration shallbe on Form S-1 (or any successor form), (including, without limitation, filing post-effectiveamendments, appropriate qualifications under applicable blue sky or other state securities laws,and appropriate compliance with the Securities Act of 1933 (the “Securities Act”)) and topermit or facilitate the sale and distribution of all or such portion of such RegistrableSecurities as are specified in such request, together with all or such portion of the RegistrableSecurities of any Stockholder or Stockholders joining in such request as are specified in a writtenrequest received by the Company within ten (10) days after such written notice from the Company ismailed or delivered.
 

 
          (b) Mandatory Registration Statement. Subject to the conditions set forth in this**Section 1.1**, the Company shall be obligated to file prior to the later of (x) sixty (60) days afterthe date of this Agreement or (y) December 31, 2005 and use its commercially reasonable efforts toeffect a registration on Form S-3 (including, without limitation, filing post-effective amendments,appropriate qualifications under applicable blue sky or other state securities laws, andappropriate compliance with the Securities Act) and to permit or facilitate the resale of allRegistrable Securities. Such registration statement shall be a Shelf Registration Statement (asdefined below) pursuant to Section 1.1(g). The Company shall be obligated to prepare and fileadditional Shelf Registration Statements every three years as necessary to allow a shelfregistration statement to continue to be available for the use as required by applicable rules andregulations of the SEC until the date on which all Shareholders have consummated the sale of allsuch Shareholder’s Registrable Securities registered under the Shelf Registration Statement.          (c) Limitations on Requested Registration. The Company shall not be obligated toeffect, or to take any action to effect, any such registration pursuant to this **Section 1.1**:               (i) In any particular jurisdiction in which the Company would be required to execute a generalconsent to service of process in effecting such registration, qualification, or compliance, unlessthe Company is already subject to service in such jurisdiction and except as may be required by theSecurities Act;               (ii) During the period starting with the date sixty (60) days prior to the Company’s goodfaith estimate of the date of filing of, and ending on a date ninety (90) days after the effectivedate of, a Company-initiated registration; provided that the Company is actively employingin good faith commercially reasonable efforts to cause such registration statement to becomeeffective;               (iii) During such time as the Company has an effective Shelf Registration Statement (asdefined below) available for use by the stockholders; or               (iv) Within six (6) months of the filing of another registration statement pursuant to thisSection 1.1.     For purposes of this Agreement, “Registrable Securities” shall mean (i) shares ofCommon Stock issued or issuable pursuant to the conversion of the Shares and the Warrant Shares,and (ii) any Common Stock issued as a dividend or other distribution with respect to or in exchangefor or in replacement of the shares referenced in (i) above; provided, however,that Registrable Securities shall not include any shares of Common Stock described in clause (i) or(ii) above that have previously been registered or which have been sold to the public eitherpursuant to a registration statement or Rule 144 promulgated by the Securities and ExchangeCommission under the Securities Act (“Rule 144”), or that have been sold in a privatetransaction in which the transferor’s rights under this Agreement are not validly assigned inaccordance with this Agreement.          (d) Deferral. If (i) in the good faith judgment of the Board of Directors of theCompany, the filing of a registration statement covering the Registrable Securities (other than aregistration statement filed pursuant to Section 1.1(b)) would be materially detrimental to theCompany, because such action would (1) materially interfere with a significant acquisition,corporate
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reorganization, or other similar transaction involving the Company; (2) require prematuredisclosure of material information that the Company has a bona fide business purpose for preservingas confidential; or (3) render the Company unable to comply with requirements under the SecuritiesAct or the Exchange Act of 1934 (the “Exchange Act”), and the Board of Directors of theCompany concludes, as a result, that it is in the best interests of the Company to defer the filingof such registration statement at such time, and (ii) the Company shall promptly furnish to suchStockholders a certificate signed by the President and General Counsel, if any, of the Companystating that in the good faith judgment of the Board of Directors of the Company, it would bematerially detrimental to the Company for such registration statement to be filed in the nearfuture and that it is, therefore, in the best interests of the Company to defer the filing of suchregistration statement, then (in addition to the limitations set forth in **Section 1.1(c)**above) theCompany shall have the right to defer such filing for a period of not more than ninety (90) daysafter receipt of the request of the Stockholders; provided, however, that the Company shall notdefer its obligation in this manner more than once in any twelve-month period; provided furtherthat the determination of the Company to defer such filing or effectiveness shall be furtherconfirmed by the Board of Directors at its next meeting, or, it is not so confirmed, such deferral,if still in effect, shall immediately terminate; provided further that the Company shall notregister any securities for its own account or that of any other stockholder during such ninety(90) day period other than pursuant to a registration relating solely to employee benefit plans, aregistration relating to the offer and sale of debt securities, a registration relating to acorporate reorganization or other Rule 145 transaction, or a registration on any registration formthat does not permit secondary sales. The Company shall promptly notify the Stockholders of theexpiration of any period during which it exercised its rights under this Section 1.1(d). TheCompany agrees that, in the event it exercises its rights under this Section 1.1(d), it shall,prior to the expiration of the applicable deferral period, file or update and use its reasonablebest efforts to cause the effectiveness of, as applicable, the applicable deferred registrationstatement.          (e) Other Shares. The registration statement filed pursuant to the request of theStockholders may, subject to the provisions of **Section 1.1(f)**, include other shares with respect towhich registration rights have been granted, and may include securities of the Company being soldfor the account of the Company.          (f) Underwriting. In the event the request to effect a registration specifies suchregistration is to be underwritten (including a Shelf Underwritten Offering (defined below)), theright of any Stockholder to include all or any portion of its Registrable Securities suchregistration shall be conditioned upon such Stockholder’s participation in such underwriting andthe inclusion of such Stockholder’s Registrable Securities to the extent provided herein; provided,however that Stockholders will have the right to initiate only two (2) such underwritten offerings(including any Shelf Underwritten Offerings). If the Company shall request inclusion in anyregistration pursuant to **Section 1.1**of securities being sold for its own account, the Stockholdersshall, on behalf of all holders of the Company’s securities, offer to include such securities inthe underwriting and such offer shall be conditioned upon the participation of the Company or suchother persons in such underwriting and the inclusion of the Company’s and such person’s othersecurities of the Company and their acceptance of the further applicable provisions of thisAgreement. The Company shall (together with all persons proposing to distribute their securitiesthrough such underwriting) enter into an underwriting agreement in customary form with therepresentative of the underwriter or underwriters. The underwriter or underwriters shall bemutually designated by the Company and a majority in interest of the selling
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Stockholders. The selling Stockholders on whose behalf the Registrable Securities are to be distributedby such underwriters shall be parties to any such underwriting agreement and therepresentations and warranties by, and the other agreements on the part of, the Company to and forthe benefit of such underwriters, shall also be made to and for the benefit of such sellingStockholders. Such underwriting agreement shall also contain such representations and warrantiesby such selling Stockholders and such other terms and provisions as are customarily contained inunderwriting agreements with respect to secondary distributions, when relevant. The Company shallnot require any Holder in any such underwriting agreement or related documents to make anyrepresentations or warranties to or agreements with the Company or the underwriters other thancustomary representations, warranties or agreements regarding such Stockholder’s title toRegistrable Securities and any written information provided by the Stockholder to the Companyexpressly for inclusion in the related registration statement.     In connection with the preparation and filing of each registration statement registeringRegistrable Securities under the Securities Act pursuant to this Section 1.1(f), the Company shallmake available upon reasonable notice at reasonable times and for reasonable periods for inspectionby each selling Stockholders, by any managing underwriter or underwriters participating in anydisposition to be effected pursuant to such registration statement, and by any attorney, accountantor other agent retained by any selling Stockholders or any managing underwriter, all pertinentfinancial and other records, pertinent corporate documents and properties of the Company, and causeall of the Company’s officers, directors and employees and the independent public accountants whohave certified the Company’s financial statements to make themselves available to discuss thebusiness of the Company and to supply all information reasonably requested by any such sellingStockholders, managing underwriters, attorneys, accountants or agents in connection with suchregistration statement as shall be necessary to enable them to exercise their due diligenceresponsibility (subject to entry by each such person into customary confidentiality agreements in aform reasonably acceptable to the Company).     Notwithstanding any other provision of this **Section 1.1**, if the underwriters advise theCompany or the selling stockholders that marketing factors require a limitation on the number ofshares to be underwritten, the underwriters may (subject to the limitations set forth below)include in the offering only that number of such securities, including Registrable Securities,which the underwriters determine will not jeopardize the success of the offering. The Companyshall so advise all holders of securities requesting registration, and the number of shares ofsecurities that are entitled to be included in the registration and underwriting shall beallocated, as follows: (i) first, to the Stockholders requesting to include Registrable Securitiesin such registration statement based on the pro rata percentage of Registrable Securities held bysuch Stockholders, assuming conversion, (ii) second, to the Company for securities being sold forits own account and (iii) third, to the other holders of securities of the Company withregistration rights to participate therein distributing their securities through such underwritingbased on the pro rata percentage of securities held by such other holders, assuming conversion.     If a person who has requested inclusion in such registration as provided above does not agreeto the terms of any such underwriting, such person shall also be excluded therefrom by writtennotice from the Company or the underwriter. The Registrable Securities or other securities soexcluded shall also be withdrawn from such registration. If shares are so withdrawn from theregistration and if the number of shares of Registrable Securities to be included in suchregistration was previously reduced as a result of marketing factors pursuant to **Section 1.1(c)**,the Company may then offer to all persons who have
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retained the right to include securities in theregistration the right to include additional securities in theregistration in an aggregate amount equal to the number of shares so withdrawn, with such shares tobe allocated among the persons requesting additional inclusion, in the manner set forth above.          (g) Shelf Registration. Subject to any applicable limitations set forth in thisSection 1.1, any Stockholder shall have the right at any time, and from time to time, to request,that any registration requested or required under this Section 1.1 (including an underwrittenoffering) be a “shelf” registration statement (the “Shelf Registration Statement”), andthat the Company prepare and file with the SEC a Shelf Registration Statement on the appropriateform for an offering to be made, covering the Registrable Securities requested to be includedtherein, on a continuous or delayed basis pursuant to Rule 415 under the Securities Act (or anysuccessor rule or similar provision then in effect) in the manner or manners designated by therequesting Stockholders . The Company shall use its reasonable best efforts to have the ShelfRegistration declared effective by the SEC as soon as practicable and to keep such ShelfRegistration Statement continuously effective and free of material misstatements or omissions(including the preparation and filing of additional Shelf Registration Statements every three yearsas necessary to allow a shelf registration statement to continue to be available for the use asrequired by applicable rules and regulations of the SEC) until the date on which all Shareholdershave consummated the sale of all such Shareholder’s Registrable Securities registered under theShelf Registration Statement. The Company agrees, if necessary, to supplement or amend the ShelfRegistration Statement, as required by the rules, regulations or instructions applicable to theregistration form used by the Company for such Shelf Registration Statement or by the SecuritiesAct or as otherwise required by this Agreement, and shall use its reasonable best efforts to havesuch supplements and amendments declared effective, if required, as soon as practicable afterfiling.          (h) Shelf Underwritten Offering. At any time that a Shelf Registration Statement iseffective, if any Shareholder delivers a notice to the Company stating that it intends to effect anunderwritten offering of Registrable Securities pursuant a take-down from a Shelf RegistrationStatement of all or part of its Registrable Securities included by it on the Shelf RegistrationStatement (the “Shelf Underwritten Offering”) and stating the aggregate offering priceand/or number of the Registrable Securities to be included in the Shelf Underwritten Offering, thenthe Company shall amend or supplement the Shelf Registration Statement as may be necessary in orderto enable such Registrable Securities to be distributed pursuant to the Shelf Underwritten Offering(taking into account the inclusion of Registrable Securities by any other holders of the Company’ssecurities pursuant to Section 1.1(f)).     **1.2**Company Registration.          (a) Company Registration. If the Company shall determine to register any of itssecurities either for its own account or the account of a security holder or holders, other than aregistration pursuant to **Sections 1.1**, a registration relating solely to employee benefit plans, aregistration relating to the offer and sale of non-convertible debt securities, a registrationrelating to a corporate reorganization or other Rule 145 transaction, the Company will:               (i) promptly give written notice of the proposed registration to all Stockholders; and
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               (ii) include in such registration (and any related qualification under blue sky laws or othercompliance), except as set forth in **Section 1.****2(b)** below, and in any underwriting involved therein,all of such Registrable Securities as are specified in a written request or requests made by anyStockholder or Stockholders received by the Company within ten (10) days after such written noticefrom the Company is mailed or delivered. Such written request may specify all or a part of aStockholder’s Registrable Securities.          (b) Underwriting. If the registration of which the Company gives notice is for aregistered public offering involving an underwriting, the Company shall so advise the Stockholdersas a part of the written notice given pursuant to **Section 1.2(a)(i)**. In such event, the right ofany Stockholder to registration pursuant to this **Section 1.2**shall be conditioned upon suchStockholder’s participation in such underwriting and the inclusion of such Stockholder’sRegistrable Securities in the underwriting to the extent provided herein. All Stockholdersproposing to distribute their securities through such underwriting shall (together with the Companyand other holders of securities of the Company with registration rights to participate thereindistributing their securities through such underwriting) enter into an underwriting agreement incustomary form with the representative of the underwriter or underwriters selected by the Companywith customary limitations of liability and indemnity provisions. The selling Stockholders onwhose behalf the Registrable Securities are to be distributed by such underwriters shall be partiesto any such underwriting agreement. Such underwriting agreement shall also contain suchrepresentations and warranties by such selling Stockholders and such other terms and provisions asare customarily contained in underwriting agreements with respect to secondary distributions, whenrelevant. The Company shall not require, nor request or require the applicable underwriters torequire any Holder in any such underwriting agreement or related documents to make anyrepresentations or warranties to or agreements with the Company or the underwriters other thancustomary representations, warranties or agreements regarding such Stockholder’s title toRegistrable Securities and any written information provided by the Stockholder to the Companyexpressly for inclusion in the related registration statement.     In connection with the preparation and filing of each registration statement registeringRegistrable Securities under the Securities Act pursuant to this Section 1.2(b), the Company shallmake available upon reasonable notice at reasonable times and for reasonable periods for inspectionby each selling Stockholders, by any managing underwriter or underwriters participating in anydisposition to be effected pursuant to such registration statement, and by any attorney, accountantor other agent retained by any selling Stockholders or any managing underwriter, all pertinentfinancial and other records, pertinent corporate documents and properties of the Company, and causeall of the Company’s officers, directors and employees and the independent public accountants whohave certified the Company’s financial statements to make themselves available to discuss thebusiness of the Company and to supply all information reasonably requested by any such sellingStockholders, managing underwriters, attorneys, accountants or agents in connection with suchregistration statement as shall be necessary to enable them to exercise their due diligenceresponsibility (subject to entry by each such person into customary confidentiality agreements in aform reasonably acceptable to the Company).     Notwithstanding any other provision of this **Section 1.2**, if the underwriters advise theCompany in writing that marketing factors require a limitation on the number of shares to beunderwritten, the underwriters may (subject to the limitations set forth below) exclude allRegistrable Securities from, or
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limit the number of Registrable Securities to be included in, theregistration and underwriting. TheCompany shall so advise all holders of securities requesting registration, and the number of sharesof securities that are entitled to be included in the registration and underwriting shall beallocated, as follows: (i) first, to the Company for securities being sold for its own account,(ii) second, to the Stockholders requesting to include Registrable Securities in such registrationstatement based on the pro rata percentage of Registrable Securities held by such Stockholders,assuming conversion and (iii) third, to the other holders of securities of the Company withregistration rights to participate therein distributing their securities through such underwritingbased on the pro rata percentage of securities held by such other holders, assuming conversion.If a person who has requested inclusion in such registration as provided above does not agree tothe terms of any such underwriting, such person shall also be excluded therefrom by written noticefrom the Company or the underwriter. The Registrable Securities or other securities so excludedshall also be withdrawn from such registration. If shares are so withdrawn from the registrationand if the number of shares of Registrable Securities to be included in such registration waspreviously reduced as a result of marketing factors pursuant to **Section 1.2(b)**, the Company shallthen offer to all persons who have retained the right to include securities in the registration theright to include additional securities in the registration in an aggregate amount equal to thenumber of shares so withdrawn, with such shares to be allocated among the persons requestingadditional inclusion, in the manner set forth above.          (c) Right to Terminate Registration. The Company shall have the right to terminate orwithdraw any registration initiated by it under this **Section 1.2**prior to the effectiveness of suchregistration whether or not any Stockholder has elected to include securities in such registration.     **1.3**Market Standoff. If requested in connection with an underwritten offering by theCompany and an underwriter of Common Stock (or other securities) of the Company, if any, eachselling Stockholder shall not sell or otherwise transfer, make any short sale of, grant any optionfor the purchase of, or enter into any hedging or similar transaction with the same economic effectas a sale, of any Common Stock (or other securities) of the Company held by such Stockholder (otherthan those included in the registration) during the ninety (90) day period following the effectivedate of a registration statement of the Company filed under the Securities Act; provided that eachsuch Stockholder shall only be bound so long as each director and executive officer of the Companyis similarly bound. The obligations described in this **Section 1.3**shall not apply to a registrationrelating solely to employee benefit plans on Form S-l or Form S-8 or similar forms that may bepromulgated in the future, or a registration relating solely to a transaction on Form S-4 orsimilar forms that may be promulgated in the future. The Company may impose stop-transferinstructions and may stamp each such certificate with an appropriate legend with respect to theshares of Common Stock (or other securities) subject to the foregoing restriction until the end ofsuch one hundred eighty (180) day period. Each Stockholder agrees to execute a market standoffagreement with said underwriters in customary form consistent with the provisions of this **Section1.3.**     **1.4**Provision of Information. It shall be a condition precedent to the obligations ofthe Company to take any action pursuant to this Section 1 that the Stockholders furnish to theCompany such information regarding the Stockholders, the Registrable Securities to be sold by theStockholders, and the intended method of disposition of the Registrable Securities as shall berequired to effect the registration of the Registrable Securities.
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     **2. Registration Procedures**. In the case of each registration affected by the Company pursuantto Section 1, the Company will keep each Stockholder advised in writing as to the initiation ofeach registration and as to the completion thereof. At its expense, the Company will as promptlyas possible:          (a) prepare and file with the Securities and Exchange Commission (“SEC”) suchamendments and supplements to each registration statement and the prospectus used in connectiontherewith as may be necessary to keep the registration statement current and effective for a periodof time ending on the earlier of (i) the date on which each Stockholder may sell all theRegistrable Securities then held by the Stockholder without restriction by the volume limitationsof Rule 144(e) of the Securities Act or (ii) such time as all the Registrable Securities includedin the registration statement have been sold by the Stockholders; use its commercially reasonableefforts to furnish to the lead underwriter or underwriters, if any, and to the Stockholders thathave requested that Registrable Securities be covered by such registration statement, prior to thefiling thereof with the SEC, a copy of the registration statement, and each amendment thereof, anda copy of any prospectus, and each amendment or supplement thereto (excluding amendments caused bythe filing of a report under the Exchange Act) and shall in good faith consider for inclusion ineach such document all comments as such Stockholders may on a timely basis propose;          (b) use its commercially reasonable efforts to furnish to the Stockholders such number ofcopies of the registration statement, prospectuses and preliminary prospectuses and such otherdocuments related to the registration statement as the Stockholder may reasonably request, in orderto facilitate the public sale or other disposition of all or any of the Registrable Securities bythe Stockholder, provided, however, that the obligation of the Company to deliver copies ofprospectuses or preliminary prospectuses to the Stockholder shall be subject to the receipt by theCompany of reasonable assurances from the Stockholder that the Stockholder will comply with theapplicable provisions of the Securities Act and of such other securities or blue sky laws as may beapplicable in connection with any use of such prospectuses or preliminary prospectuses; causeauthorized officers of the Company to execute customary certificates as may be reasonably requestedby any selling Stockholder or any underwriter of such Registrable Securities;          (c) use its commercially reasonable efforts to register or qualify the securities covered bysuch registration statement under such state securities or blue sky laws of such jurisdictions asthe Stockholders may reasonably request in writing within twenty (20) days following the originalfiling of such registration statement, provided, however, that the Company shall not be required toqualify to do business or consent to service of process in any jurisdiction in which it is not nowso qualified or has not so consented;          (d) notify the Stockholders and any underwriter of such Registrable Securities in writing (i)after it receives notice of the time when the registration statement has become effective or asupplement to any prospectus forming a part of such registration statement has been filed, (ii) ofthe occurrence of any event as a result of which the registration statement or the prospectusincluded in such registration statement, as then in effect, includes an untrue statement of amaterial fact or omits to state any material fact required to be stated therein or necessary tomake the statements therein, in light of the circumstances under which they were made, notmisleading, (iii) of any request by the SEC or any other regulatory body or other body havingjurisdiction for any amendment of or supplement to any registration statement or other documentrelating to such offering, (iv) any request by the SEC that the
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Company amend or supplement such registration statement or prospectus, and (v) if for anyother reason it shall be necessary to amend or supplement such registration statement or prospectusin order to comply with the Securities Act and, in any such case as promptly as reasonablypracticable thereafter, prepare and file with the SEC an amendment or supplement to suchregistration statement or prospectus which will correct such statement or omission or effect suchcompliance;          (e) advise the Stockholders promptly after it receives notice or obtains knowledge of theissuance of any stop order by the SEC delaying or suspending the effectiveness of the registrationstatement or of the initiation or threat of any proceeding in any jurisdiction for that purpose;and it will promptly use its commercially reasonable efforts to prevent the issuance of any stoporder or to obtain its withdrawal at the earliest possible moment if such stop order should beissued;          (f) in the event of any underwritten public offering, enter into and perform its obligationsunder an underwriting agreement, in usual and customary form, with the underwriter of suchoffering;          (g) use its commercially reasonable efforts to cause all such Registrable Securities coveredby such registration statement to be listed on a national securities exchange or trading system andeach securities exchange and trading system (if any) on which similar securities issued by theCompany are then listed;          (h) provide a transfer agent and registrar for all Registrable Securities registered pursuantto this Agreement and provide a CUSIP number for all such Registrable Securities, in each case notlater than the effective date of such registration;          (i) promptly make available for inspection by the selling Stockholders, any underwriterparticipating in any disposition pursuant to such registration statement, and any attorney oraccountant or other agent retained by any such underwriter or selected by the selling Stockholders,all financial and other records, pertinent corporate documents, and properties of the Company, andcause the Company’s officers, directors, employees, and independent accountants to supply allinformation reasonably requested by any such seller, underwriter, attorney, accountant, or agent inconnection with any such registration statement, provided the disclosure of such information shallbe pursuant to a reasonable confidentiality agreement in customary form;          (j) use all reasonable efforts to furnish to each Stockholder and to the managing underwriter,if any, a signed counterpart, addressed to the managing underwriter, if any, of (i) an opinion oropinions of counsel to the Company and (ii) a comfort letter or comfort letters from the Company’sindependent public accountants, each in customary form and covering such matters of the typecustomarily covered by opinions or comfort letters, as the case may be, as each such Stockholdersand themanaging underwriter, if any, reasonably requests;          (k) to the extent reasonably requested by the lead or managing underwriters in connection withan underwritten offering, send appropriate officers of the Company to attend “road shows” scheduledin reasonable number and at reasonable times in connection with any such underwritten offering withall out-of-pocket costs and expenses incurred by the Company or such officers in connection withsuch attendance to be paid by the Company;
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          (l) cooperate with each selling Stockholder and each underwriter or agent, if any,participating in the disposition of such Registrable Securities and their respective counsel inconnection with any filings required to be made with the National Association of SecuritiesDealers, Inc; and          (m) comply with all applicable rules and regulations of the SEC in all material respects.     **3. Expenses of Registration**. All reasonable expenses incurred in effecting the registrationof a registration statement, including, without limitation, all registration and filing fees,printing expenses, fees and disbursements of counsel for the Company, underwriting expenses (otherthan fees, commissions or discounts), expenses of any audits incident to or required by any suchregistration and expenses of complying with the securities or blue sky laws of any jurisdictions,and the reasonable fees and expenses of one special counsel to the Stockholders (such fees andexpenses of the special counsel not to exceed $50,000) shall be paid by the Company;provided, however, that the Company shall not be required to pay for any expensesof any registration proceeding begun if the registration request is subsequently withdrawn at therequest of the holders of a majority of the Registrable Securities to be registered (in which caseall participating holders shall bear such expenses pro rata among each other based on the number ofRegistrable Securities requested to be so registered); provided further that if, at thetime of such withdrawal, such participating holders have learned of a material adverse change inthe condition, business, or prospects of the Company from that known to such participating holdersat the time of their request and have withdrawn the request with reasonable promptness afterlearning of such information, then such participating holders shall not be required to pay any ofsuch expenses and shall not forfeit their right to one registration pursuant to Section1.1(f).     **4. Transfer of Registrable Securities; Suspension**. The Stockholders agree that they will notoffer to sell or make any sale, assignment, pledge, hypothecation or other transfer with respect tothe Registrable Securities that would constitute a sale within the meaning of the Securities Act*except*pursuant to either (i) a registration statement, (ii) Rule 144 or (iii) another exemptionfrom registration that may be then available, and that they will promptly notify the Company of anychanges in the information set forth in any registration statement after it is prepared regardingthe Stockholder or its plan of distribution to the extent required by applicable law.          (a) If (i) in the good faith judgment of the Board of Directors of the Company, upon thehappening of an event that renders it advisable to suspend use of the prospectus, because use ofthe prospectus would (1) materially interfere with a significant acquisition, corporatereorganization, or other similar transaction involving the Company; (2) require prematuredisclosure of material information that the Company has a bona fide business purpose for preservingas confidential; or (3) render the Company unable to comply with requirements under the SecuritiesAct or the Exchange Act, and the Board of Directors of the Company concludes, as a result, that itis in the best interests of the Company to suspend use of the prospectus at such time, and (ii) theCompany shall promptly furnish to such Stockholders a certificate signed by the President andGeneral Counsel, if any, of the Company stating that in the good faith judgment of the Board ofDirectors of the Company, it would be materially detrimental to the Company for the prospectus tobe used and that it is, therefore, in the best interests of the Company to suspend use of theprospectus (which certificate will not disclose the content of any material non-public informationand will indicate the date of the beginning and end of the intended suspension, if known), then theCompany shall have the right to suspend use of the prospectus for not
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greater than thirty (30) consecutive days and not more than twice in any twelve (12) monthperiod of time, in which case each Stockholder shall discontinue disposition of RegistrableSecurities covered by the registration statement or prospectus until copies of a supplemented oramended prospectus are distributed to the Stockholders or until the Stockholders are advised inwriting by the Company that the use of the applicable prospectus may be resumed. The suspensionand certificate thereof described in this **Section 4(a)**shall be held in strictest confidence andnot disclosed by the Stockholders.          (b) Subject to paragraph (c) below, in the event of: (i) any request by the SEC or any otherfederal or state governmental authority during the period of effectiveness of any registrationstatement for amendments or supplements to a registration statement or related prospectus or foradditional information, (ii) the issuance by the SEC or any other federal or state governmentalauthority of any stop order suspending the effectiveness of a registration statement or theinitiation of any proceedings for that purpose, (iii) the receipt by the Company of anynotification with respect to the suspension of the qualification or exemption from qualification ofany of the Registrable Securities for sale in any jurisdiction or the initiation of any proceedingfor such purpose, (iv) any event or circumstance which necessitates the making of any changes inthe registration statement or prospectus, or any document incorporated or deemed to be incorporatedtherein by reference, so that, in the case of the registration statement, it will not contain anyuntrue statement of a material fact or any omission to state a material fact required to be statedtherein or necessary to make the statements therein not misleading, and that in the case of theprospectus, it will not contain any untrue statement of a material fact or any omission to state amaterial fact required to be stated therein or necessary to make the statements therein, in thelight of the circumstances under which they were made, not misleading, then the Company shalldeliver a certificate in writing signed by the President and General Counsel, if any, of theCompany to the Stockholders (the “Suspension Notice”) to the effect of the foregoing (whichnotice will not disclose the content of any material non-public information and will indicate thedate of the beginning and end of the intended suspension, if known), then the Company shall havethe right to suspend use of the prospectus and, upon receipt of such Suspension Notice, theStockholders will refrain from selling any Registrable Securities pursuant to the registrationstatement (a “Suspension”) until the Stockholders’ receipt of copies of a supplemented oramended prospectus prepared and filed by the Company, or until it is advised in writing by theCompany that the current prospectus may be used, and has received copies of any additional orsupplemental filings that are incorporated or deemed incorporated by reference in any suchprospectus; provided that in the event of any such Suspension, the Company will as promptlyas reasonably practicable cause the use of the prospectus so suspended to be resumed as soon aspossible and, if necessary, prepare and file with the SEC an amendment or supplement to theregistration statement or prospectus to correct any such untrue statement of material fact oromission. The Suspension and Suspension Notice described in this Section 4(b) shall be held instrictest confidence and not disclosed by the Stockholders. The Company agrees that, in the eventof any Suspension under this Section 4(b), it shall, prior to the expiration of the applicablesuspension period, update the suspended Shelf registration statement as may be necessary to permitthe Shareholders to resume use thereof in connection with the offer and sale of their RegistrableSecurities in accordance with applicable law.          (c) Provided that a Suspension is not then in effect, the Stockholders may sell RegistrableSecurities under the registration statement, provided that the selling Stockholder arranges fordelivery of a current prospectus to the transferee of such Registrable Securities.
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          (d) In the event of a sale of Registrable Securities by a Stockholder, such Stockholder mustalso deliver to the Company’s transfer agent, with a copy to the Company, a certificate ofsubsequent sale reasonably satisfactory to the Company, so that ownership of the RegistrableSecurities may be properly transferred.     **5. Indemnification**.          (a) The Company will indemnify and hold harmless each holder of Registrable Securities thatare included in a registration statement pursuant to the provisions of Section 2 hereof, itsdirectors, officers, agents, investment advisors, partners, members and employees, and anyunderwriter (as defined in the Securities Act) for such holder and each person, if any, whocontrols such holder and the directors, officers, agents, investment advisors, partners, membersand employees of such controlling person or such underwriter within the meaning of the SecuritiesAct, from and against, and will reimburse such holder and each such underwriter and controllingperson with respect to, any and all loss, damage, liability, cost and expense to which such holderor any such underwriter or controlling person may become subject under the Securities Act orotherwise, insofar as such losses, damages, liabilities, costs or expenses are caused by any untruestatement or alleged untrue statement of any material fact contained in such registrationstatement, any prospectus contained therein or any amendment or supplement thereto, or arise out ofor are based upon the omission or alleged omission to state therein a material fact required to bestated therein or necessary to make the statements therein, in light of the circumstances in whichthey were made, not misleading; provided, however, that the Company will not be liable in any suchcase to the extent that any such loss, damage, liability, cost or expenses arises out of or isbased upon an untrue statement or alleged untrue statement or omission or alleged omission so madein conformity with information furnished by or on behalf of such holder, such underwriter or suchcontrolling person in writing specifically for use in the preparation thereof.          (b) Each holder of Registrable Securities included in a registration statement pursuant to theprovisions of Section 1 hereof will indemnify and hold harmless the Company, its directors andofficers, any controlling person and any underwriter from and against, and will reimburse theCompany, its directors and officers, any controlling person and any underwriter with respect to,any and all loss, damage, liability, cost or expense to which the Company or any controlling personand/or any underwriter may become subject under the Securities Act or otherwise, insofar as suchlosses, damages, liabilities, costs or expenses are caused by any untrue statement or allegeduntrue statement of any material fact contained in such registration statement, any prospectuscontained therein or any amendment or supplement thereto, or arise out of or are based upon theomission or alleged omission to state therein a material fact required to be stated therein ornecessary to make the statements therein, in light of the circumstances in which they were made,not misleading, in each case to the extent, but only to the extent, that such untrue statement oralleged untrue statement or omission or alleged omission was so made in reliance upon informationfurnished by or on behalf of such holder specifically for use in the preparation thereof.Notwithstanding the foregoing, the liability of the Stockholders with respect to losses referred toin this Section 5(b) shall not exceed the gross proceeds received by the holder from the sale ofthe Shares and the Warrant Shares.          (c) Promptly after receipt by an indemnified party pursuant to the provisions of Sections 5(a)or 5(b) of notice of the commencement of any action involving the subject matter of the foregoingindemnity provisions such indemnified party will, if a claim thereof is to be made against the
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indemnifying party pursuant to the provisions of said Sections 5(a) or 5(b), promptly notifythe indemnifying party of the commencement thereof; but the omission to so notify the indemnifyingparty will not relieve it from any liability that it may have to any indemnified party otherwisethan hereunder. In case such action is brought against any indemnified party and it notifies theindemnifying party of the commencement thereof, the indemnifying party shall have the right toparticipate in, and, to the extent that it may wish, jointly with any other indemnifying partysimilarly notified, assume the defense thereof, with counsel satisfactory to such indemnifiedparty, provided, however, if counsel for the indemnifying party concludes that a single counselcannot under applicable legal and ethical considerations represent both the indemnifying party andthe indemnified party, the indemnified party or parties have the right to select separate counselto participate in the defense of such action on behalf of such indemnified party or parties. Afternotice from the indemnifying party to such indemnified party of its election so to assume thedefense thereof, the indemnifying party will not be liable to such indemnified party for any legalor other expense subsequently incurred by such indemnified party in connection with the defensethereof other than reasonable costs of investigation, unless (i) the indemnified party shall haveemployed counsel in accordance with the provisions of the preceding sentence, (ii) the indemnifyingparty shall not have employed counsel reasonably satisfactory to the indemnified party to representthe indemnified party within a reasonable time after the notice of the commencement of the actionor (iii) the indemnifying party has, in its sole discretion, authorized the employment of counselfor the indemnified party at the expense of the indemnifying party.     **6. Limitations on Subsequent Registration Rights**. If the Company at any time grants to anyperson or entity any rights to request the Company to effect the registration (whether on demand orby “piggyback” rights or otherwise) under the Securities Act of any equity securities of theCompany, or securities convertible into or exchangeable for such equity securities on any termsmore favorable to such persons than the rights granted to the Stockholders hereunder, theStockholders shall be deemed to be granted such more favorable rights and benefits and thisAgreement shall be deemed amended or supplemented to the extent necessary to grant the Stockholderssuch more favorable rights and benefits.     **7. Right of First Refusal to Significant Holders**. The Company hereby grants to eachStockholder, the right of first refusal to purchase its pro rata share of New Securities (asdefined in Section 7(a)) that the Company may, from time to time, propose to sell and issue afterthe date of this Agreement. A Stockholder’s pro rata share, for purposes of this right of firstrefusal, is equal to the ratio of (a) the number of shares of Common Stock owned by suchStockholder immediately prior to the issuance of New Securities (assuming full conversion of theShares and exercise of all outstanding convertible securities, rights, options and warrants,directly or indirectly, into Common Stock held by said Stockholder) to (b) the total number ofshares of Common Stock outstanding immediately prior to the issuance of New Securities (assumingfull conversion of the Shares and exercise of all outstanding convertible securities, rights,options and warrants, directly or indirectly, held by all of the Stockholders).          (a) “**New Securities**” shall mean any capital stock (including Common Stock and/or PreferredStock) of the Company whether now authorized or not, and rights, convertible securities, options orwarrants to purchase such capital stock, and securities of any type whatsoever that are, or maybecome, exercisable or convertible into capital stock; provided that the term “**NewSecurities**” does not include:
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               (i) the Shares, Warrant Shares and the Common Stock into which such Registrable Securities areconvertible or exercisable into;               (ii) shares of Common Stock and options, warrants or other rights to purchase Common Stockissued to employees, officers or directors of, or consultants or advisors to the Company or anysubsidiary pursuant to restricted stock purchase agreements, stock option plans or similararrangements;               (iii) shares of Common Stock issued upon the exercise or conversion of options or convertiblesecurities outstanding as of the date of the filing the Certificate of Designation or upon theexercise or conversion of options or convertible securities referenced in the paragraph above;               (iv) shares of Common Stock issued or issuable as a dividend or distribution on PreferredStock or pursuant to any event for which adjustment is made pursuant to the Certificate ofDesignation;               (v) shares of Common Stock issued or issuable pursuant to the acquisition of anothercorporation by the Company by merger, purchase of substantially all of the assets or otherreorganization or to a joint venture agreement, provided, that such issuances are approved by theBoard of Directors;               (vi) shares of Common Stock issued or issuable to banks, equipment lessors or other financialinstitutions pursuant to a debt financing or commercial leasing transaction approved by the Boardof Directors;               (vii) shares of Common Stock issued or issuable in connection with any settlement of anyaction, suit, proceeding or litigation approved by the Board of Directors;               (viii) shares of Common Stock issued or issuable in connection with sponsored research,collaboration, technology license, development, original equipment manufacturers, marketing orother similar agreements or strategic partnerships approved by the Board of Directors;               (ix) shares of Common Stock issued or issuable to suppliers or third party service providersin connection with the provision of goods or services pursuant to transactions approved by theBoard of Directors; provided, however, that the aggregate shares of Common Stock issued pursuant tosubsections (vi)-(ix) shall not exceed three hundred thousand (300,000) shares (as adjusted for anystock dividends, combinations or splits with respect to such shares); and               (x) any right, option or warrant to acquire any security convertible into the securitiesexcluded from the definition of New Securities pursuant to subsections (i) through (x) above.          **(b)** In the event the Company proposes to undertake an issuance of New Securities, it shallgive each Stockholder written notice of its intention, describing the type of New Securities, andtheir price and the general terms upon which the Company proposes to issue the same. EachStockholder shall have ten (10) days after any such notice is mailed or delivered to agree to
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purchase such Stockholder’s pro rata share of such New Securities for the price and upon the termsspecified in the notice by giving written notice to the Company and stating therein thequantity of New Securities to be purchased.          (c) In the event the Stockholders fail to exercise fully the right of first refusal withinsaid ten (10) day period (the “Election Period”), the Company shall have ninety (90) daysthereafter to sell or enter into an agreement (pursuant to which the sale of New Securities coveredthereby shall be closed, if at all, within ninety (90) days from the date of said agreement) tosell that portion of the New Securities with respect to which the Stockholder’s right of firstrefusal option set forth in this **Section 7**was not exercised, at a price and upon terms no morefavorable to the purchasers thereof than specified in the Company’s notice to Stockholdersdelivered pursuant to **Section 7(b)**. In the event the Company has not sold within such ninety (90)day period following the Election Period, or such ninety (90) day period following the date of saidagreement, the Company shall not thereafter issue or sell any New Securities, without first againoffering such securities to the Stockholders in the manner provided in this **Section 7**.          (d) The right of first refusal granted under this Agreement shall expire upon, and shall notbe applicable at such time all Shares are converted into Common Stock.     **8. Notices**. All notices, requests, consents and other communications hereunder shall be inwriting, shall be mailed (A) if within domestic United States by nationally recognized overnightexpress courier, postage prepaid, or by facsimile, or (B) if delivered from outside the UnitedStates, by International Federal Express or facsimile, and shall be deemed given (i) if deliveredby first-class registered or certified mail domestic, three business days after so mailed, (ii) ifdelivered by nationally recognized overnight carrier, one (1) business day after so mailed, (iii)if delivered by International Federal Express, two (2) business days after so mailed, (iv) ifdelivered by facsimile, upon electric confirmation of receipt and shall be delivered as addressedas follows:**(a)** if to the Company, to:Therma-Wave, Inc.