EXHIBIT 4.1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into this 28th day of April, 2004 by and among (i) Tegal Corporation, a Delaware
corporation ("Tegal"), (ii) First Derivative Systems, Inc., a California
corporation ("FDSI"), and (iii) Xxxx Xxxxxx, in his capacity as the
representative (the "Shareholders' Representative") of all of the shareholders
and creditors of FDSI who will receive shares of common stock of Tegal upon
execution of FDSI's Plan of Dissolution.
R E C I T A L S
A. On April___, 2004 Tegal and FDSI entered into an Asset Acquisition
Agreement (the "Asset Acquisition Agreement") pursuant to which Tegal has agreed
to purchase substantially all of the assets, and certain liabilities, of FDSI in
exchange of One Million Four Hundred Ten Thousand Six Hundred and Forty-two
(1,410,632) shares (the "Tegal Shares") of Common Stock (as defined in Section 1
below).
B. In accordance with Section 9 of the Asset Acquisition Agreement, Tegal
has agreed to grant certain registration rights to holders of the Tegal Shares
and other Registrable Securities (as defined in Section 1 below).
C. Tegal and FDSI enter into this Agreement to memorialize such
registration rights.
D. Shareholders' Representative joins this Agreement as a party in
accordance with Section 14 of the Shareholder Representation Agreement by and
between Tegal and each of the shareholders and creditors of FDSI (all of whom
are listed on Exhibit A to this Agreement) as FDSI intends to dissolve and
distribute the Tegal Shares to certain of its shareholders and creditors soon
after the closing of the transactions contemplated in the Asset Acquisition
Agreement.
AGREEMENTS
NOW, THEREFORE, in consideration of the premises, and of the mutual
covenants and agreements contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. Definitions. In addition to capitalized terms defined elsewhere in this
Agreement, the following capitalized terms shall have the following meaning when
used in this Agreement. Defined terms used, but not defined, herein shall have
the meanings ascribed to them as set forth in the Asset Acquisition Agreement.
1.1 "Common Stock" means the common stock, par value $0.01 per
share, of Tegal.
1.2 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
1.3 "Person" means any person or entity, whether an individual,
whether in their capacity as a trustee, executor, administrator or other legal
representative, sole proprietorship, corporation, limited liability company,
general partnership, limited partnership, trust, unincorporated organization,
syndicate, business association, firm, joint venture, governmental agency or
authority or any similar entity.
1.4 "Public Offering" means any offering by Tegal of its equity
securities to the public pursuant to an effective registration statement under
the Securities Act or any comparable statement under any comparable federal
statute then in effect.
1.5 "Registrable Shares" means at any time (i) the Tegal Shares;
(ii) any shares of Common Stock then outstanding which were issued directly or
indirectly as a dividend or other distribution with respect to or in replacement
of the Tegal Shares; and (iii) any shares of Common Stock then issuable directly
or indirectly upon the conversion or exercise of other securities which were
issued as a dividend or other distribution with respect to or in replacement of
the Tegal Shares or the shares referred to in (ii); provided, however, that
Registrable Shares shall not include any shares which have been registered
pursuant to the Securities Act or which have been sold pursuant to Rule 144 of
the Securities Act. For purposes of this Agreement, a Person will be deemed to
be a holder of Registrable Shares whenever such Person has the right to acquire
such Registrable Shares, whether or not such acquisition actually has been
effected.
1.6 "SEC" means the Securities and Exchange Commission.
1.7 "Securities Act" means the Securities Act of 1933, as amended.
2. Registration Rights.
2.1 Registration. Within ninety (90) days of the Closing, Tegal will
file a single Form S-3 with the SEC to register the resale of the Registrable
Shares by the holders thereof.
2.2 Payment of Expenses for the Registration. Registration Expenses
(as defined in Section 5 below) shall be paid by Tegal.
2.3 Restrictions. Tegal may postpone for up to forty-five (45) days
the filing or the effectiveness of a registration statement for the Demand
Registration if the Board of Directors of Tegal reasonably and in good faith
determines that such filing would be materially detrimental to Tegal or require
a disclosure of a material fact that might reasonably be expected to have a
material adverse effect on Tegal or any plan or proposal by Tegal or any of its
subsidiaries to engage in any acquisition of assets (other than in the ordinary
course of business) or any merger, consolidation, tender offer or other
significant transaction.
2.4 No Underwritten Offering. The holders of the Registrable Shares
hereby agree that they shall not sell the Registrable Shares in an underwritten
offering.
3. Registration Procedures. Tegal will use its reasonable best efforts to
effect the registration and sale of such Registrable Shares in accordance with
the intended method of disposition thereof and, pursuant thereto, Tegal will as
expeditiously as possible:
(a) prepare and file with the SEC a registration statement
with respect to such Registrable Shares and use its reasonable best efforts to
cause such registration statement to become effective (provided that before
filing a registration statement or prospectus, or any amendments or supplements
thereto, Tegal will furnish upon request copies of all such documents proposed
to be filed to the counsel or counsels for the sellers of the Registrable Shares
covered by such registration statement);
(b) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus(es) used in
connection therewith as may be necessary to keep such registration statement
effective for a period of not less than one (1) year or such shorter period
until such Registrable Shares are no longer Registrable Shares and comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the sellers thereof set
forth in such registration statement;
(c) furnish to each seller of Registrable Shares such number
of copies of such registration statement, each amendment and supplement thereto,
the prospectus(es) included in such registration statement (including each
preliminary prospectus) and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable Shares owned
by such seller;
(d) use its reasonable best efforts to register or qualify
such Registrable Shares under such other securities or blue sky laws of such
jurisdictions as any seller reasonably requests and do any and all other acts
and things which may be reasonably necessary or advisable to enable such seller
to consummate the disposition in such jurisdictions of the Registrable Shares
owned by such seller (provided that Tegal will not be required to (i) qualify
generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this subparagraph or (ii) consent to general service
of process in any such jurisdiction);
(e) notify each seller of such Registrable Shares, at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement contains an untrue statement
of a material fact or omits any fact necessary to make the statements therein
not misleading, and, at the request of any such seller, Tegal will prepare a
supplement or amendment to such prospectus so that, as thereafter delivered to
the purchasers of such Registrable Shares, such prospectus will not contain any
untrue statement of a material fact or omit to state any fact necessary to make
the statements therein not misleading;
(f) cause all such Registrable Shares to be listed on each
securities exchange on which similar securities issued by Tegal are then listed
or if no such securities are then listed, such securities exchange as the
holders of a majority of the Registrable Shares included in such registration
may reasonably request;
(g) make available for inspection by any seller of Registrable
Shares and any attorney, accountant or other agent retained by any such seller,
all financial and other records, pertinent corporate documents and properties of
Tegal, and cause Tegal's officers, directors, employees and independent
accountants to supply all information reasonably requested by any such seller,
attorney, accountant or agent in connection with such registration statement;
and
(h) advise each seller of such Registrable Shares, promptly
after it shall receive notice or obtain knowledge thereof, of the issuance of
any stop order by the SEC suspending the effectiveness of such registration
statement or the initiation or threatening of any proceeding for such purpose
and promptly use all reasonable efforts to prevent the issuance of any stop
order or to obtain its withdrawal if such stop order should be issued.
4. Registration Expenses. All expenses incident to Tegal's performance of
or compliance with this Agreement, including, but not limited to, all
registration and filing fees, fees and expenses of compliance with securities or
blue sky laws, printing expenses, messenger and delivery expenses, and fees and
disbursements of counsel for Tegal and all independent certified public
accountants and other Persons retained by Tegal (all such expenses being herein
called "Registration Expenses"), will be borne by Tegal, provided that Tegal
shall not be required to pay sales commissions, discounts or transfer taxes. In
addition, Tegal will pay its internal expenses (including, but not limited to,
all salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit or quarterly review, the
expense of any liability insurance obtained by Tegal and the expenses and fees
for listing the securities to be registered on each securities exchange.
5. Indemnification.
5.1 By Tegal. Tegal agrees to indemnify, to the extent permitted by
law, each holder of Registrable Shares, its officers, employees and directors
and each Person who controls such holder (within the meaning of the Securities
Act) against all losses, claims, damages, liabilities and expenses (including,
but not limited to, attorneys' fees and expenses) caused by any untrue or
alleged untrue statement of material fact contained in any registration
statement, prospectus or preliminary prospectus, or any amendment thereof or
supplement thereto, or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as the same are caused by or contained in any
information furnished in writing to Tegal by such holder expressly for use
therein or by such holder's failure to deliver a copy of the prospectus or any
amendments or supplements thereto after Tegal has furnished such holder with a
sufficient number of copies of the same. The payments required by this Section
5.1 will be made periodically during the course of the investigation or defense,
as and when bills are received or expenses incurred.
5.2 By Each Holder. In connection with any registration statement in
which a holder of Registrable Shares is participating, each such holder will
furnish to Tegal in writing such information as Tegal reasonably requests for
use in connection with any such registration statement or prospectus and, to the
extent permitted by law, will indemnify Tegal, its directors, employees and
officers and each Person who controls Tegal (within the meaning of the
Securities Act) against any losses, claims, damages, liabilities and expenses
resulting from any untrue or alleged untrue statement of material fact contained
in the registration statement, prospectus or preliminary prospectus, or any
amendment thereof or supplement thereto, or any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein not misleading, but only to the extent that such untrue
statement or omission is contained in or omitted from any information so
furnished in writing by such holder for the acknowledged purpose of inclusion in
such registration statement, prospectus or preliminary prospectus; provided that
the obligation to indemnify will be several, not joint and several, among such
holders of Registrable Shares and the liability of each such holder of
Registrable Shares will be in proportion to and limited in all events to the net
amount received by such holder from the sale of Registrable Shares pursuant to
such registration statement.
5.3 Procedure. Any Person entitled to indemnification hereunder will
(a) give prompt written notice to the indemnifying Person of any claim with
respect to which it seeks indemnification and (b) unless in such indemnified
Person's reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such
indemnifying Person to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified Person. If such defense is assumed, the
indemnifying Person will not be subject to any liability for any settlement made
by the indemnified Person without its consent (but such consent will not be
unreasonably withheld). An indemnifying Person who is not entitled to, or elects
not to, assume the defense of a claim will not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying Person with respect to such claim, unless in the reasonable
judgment of any indemnified Person a conflict of interest may exist between such
indemnified Person and any other of such indemnified parties with respect to
such claim.
5.4 Survival. The indemnification provided for under this Agreement
will remain in full force and effect regardless of any investigation made by or
on behalf of the indemnified Person or any officer, director or controlling
Person of such indemnified Person and will survive the transfer of securities.
Tegal also agrees to make such provisions as are reasonably requested by any
indemnified Person for contribution to such Person in the event Tegal's
indemnification is unavailable for any reason.
6. Compliance with Rule 144 and Rule 144A. So long as Tegal files reports
under Section 13 or 15(d) of the Exchange Act, then at the request of any holder
of Registrable Shares who proposes to sell securities in compliance with Rule
144 of the Securities Act, Tegal will (a) forthwith furnish to such holder a
written statement of compliance with the filing requirements of the Securities
Act as set forth in Rule 144, as such rule may be amended from time to time and
(b) make available to the public and such holders such information as will
enable the holders of Registrable Shares to make sales pursuant to Rule 144. At
any time that Tegal is not subject to Section 13 or 15(d) of the Exchange Act,
Tegal will provide to the holder of Registrable Shares and to any prospective
purchaser of Registrable Shares under Rule 144A of the Securities Act, the
information described in Rule 144A(d)(4) of the Securities Act.
7. Miscellaneous.
7.1 No Inconsistent Agreements. Tegal will not hereafter enter into
any agreement with respect to its securities which is inconsistent with or which
otherwise materially limits, restricts or interferes with the rights granted to
the holders of Registrable Shares in this Agreement.
7.2 Amendments and Waivers. Except as otherwise expressly provided
herein, the provisions of this Agreement may be amended or waived at any time
only by the written agreement of Tegal, FDSI and the Shareholders'
Representative (unless FDSI has distributed the Tegal Shares to its creditors
and shareholders, in which case FDSI need not approve the amendment or waiver);
provided, however, that the provisions of this Agreement may not be amended or
waived without the consent of the holders of all the Registrable Shares
adversely affected by such amendment or waiver if such amendment or waiver
adversely affects a portion of the Registrable Shares but does not so adversely
affect all of the Registrable Shares. Any waiver, permit, consent or approval of
any kind or character on the part of any such holders of any provision or
condition of this Agreement must be made in writing and shall be effective only
to the extent specifically set forth in writing. Any amendment or waiver
effected in accordance with this paragraph shall be binding upon each holder of
Registrable Shares and Tegal.
7.3 Successors and Assigns. Except as otherwise expressly provided
herein, all covenants and agreements contained in this Agreement by or on behalf
of any of the parties hereto will bind and inure to the benefit of the
respective successors and assigns of the parties hereto, whether so expressed or
not. In addition, and whether or not any express assignment has been made, the
provisions of this Agreement which are for the benefit of FDSI, the shareholders
of FDSI or holders of Registrable Shares are also for the benefit of, and
enforceable by, any subsequent holders of such Registrable Shares.
7.4 Descriptive Headings. The descriptive headings of this Agreement
are inserted for convenience of reference only and do not constitute a part of
and shall not be utilized in interpreting this Agreement.
7.5 Notices. Any notices required or permitted to be sent hereunder
shall be delivered personally or mailed, certified mail, return receipt
requested, or delivered by overnight courier service to the following addresses,
or such other address as any party hereto designates by written notice to Tegal,
and shall be deemed to have been given upon delivery, if delivered personally,
three (3) days after mailing, if mailed, or one (1) business day after delivery
to the courier, if delivered by overnight courier service.
If to FDSI: With a copy to:
----------- ---------------
Xxxx Xxxxxx Xxxxxxx X. Xxxxxxx, Esq.
Chairman & CEO 0000 Xxxxx Xxxxxx, #000
First Derivative Systems, Inc. Xxxxx Xxxxxxx, XX 00000
000-X Xxxxxxxx Xxxx Fax: 000-000-0000
Xxxxxx, XX 00000 email: xxx@xxxxxxxxxxxxx.xxx
Fax: (000) 000-0000
email: xxxx@xxxxxxxxxxxxx.xxx
If to Stockholders' Representative:
-----------------------------------
Xxxx Xxxxxx
Chairman & CEO
First Derivative Systems, Inc.
000-X Xxxxxxxx Xxxx
Xxxxxx, XX 00000
Fax: (000) 000-0000
email: xxxx@xxxxxxxxxxxxx.xxx
If to Tegal: With a copy to:
------------ ---------------
Xxxxxx X. Xxxx Xxxxx Xxxxxxxxxx
Chief Financial Officer Xxxxxx & Xxxxxxx LLP
Tegal Corporation 000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
0000 Xxxxx XxXxxxxx Xxxx. Xxx Xxxxxxxxx, XX 00000-0000
Xxxxxxxx, XX 00000-0000 Fax: (000) 000-0000
Fax: (000) 000-0000 email: xxxxx.xxxxxxxxxx@xx.xxx
email: xxxxx@xxxxx.xxx
If to holders of the Registrable Shares other than FDSI or the shareholders of
FDSI, to the addresses set forth on the stock record books of Tegal.
7.6 Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall be
deemed an original, and such counterparts together shall constitute one
instrument.
7.7 Governing Law. This Agreement and the transactions contemplated
hereby shall be construed in accordance with, and governed by, the laws of the
State of California; provided, however, that matters of Delaware corporate law
shall be governed by the Delaware General Corporation Law.
7.8 Consent to Jurisdiction. Each of the parties hereto (a) consents
to submit itself to the personal jurisdiction of the federal and state courts
located in Petaluma, California in the event any dispute arises out of this
Agreement or any of the transactions contemplated hereby, (b) agrees that it
will not attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court, and (c) agrees that it will not bring any
action relating to this Agreement in any court other than a federal or state
court located in Petaluma, California.
7.9 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES
ITS RESPECTIVE RIGHT TO A JURY TRIAL OF ANY PERMITTED CLAIM OR CAUSE OF ACTION
ARISING OUT OF THIS AGREEMENT, ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY, OR
ANY DEALINGS BETWEEN ANY OF THE PARTIES HERETO RELATING TO THE SUBJECT MATTER OF
THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY. THE SCOPE OF THIS
WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE
FILED IN ANY COURT AND THAT RELATE THE SUBJECT MATTER OF THIS AGREEMENT OR ANY
OF THE TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING, WITHOUT LIMITATION, CONTRACT
CLAIMS, TORT CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS WAIVER
IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, SUPPLEMENTS OR OTHER
MODIFICATIONS TO THIS AGREEMENT, ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR
TO ANY OTHER DOCUMENT OR AGREEMENT RELATING TO THE TRANSACTIONS CONTEMPLATED
HEREBY.
7.10 Service of Process. Each of the parties hereto irrevocably
consents to the service of any process, pleading, notices or other papers by the
mailing of copies thereof by registered, certified or first class mail, postage
prepaid, to such party at such party's address set forth herein, or by any other
method provided or permitted under California law.
7.11 Reproduction of Documents. This Agreement and all documents
relating hereto, including, but not limited to, (a) consents, waivers,
amendments and modifications which may hereafter be executed and (b)
certificates and other information previously or hereafter furnished, may be
reproduced by any photographic, photostatic, microfilm, optical disk,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
7.12 Remedies. Each of the parties to this Agreement will be
entitled to enforce its rights under this Agreement specifically, to recover
damages by reason of any breach of any provision of this Agreement and to
exercise all other rights existing in its favor. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party shall be entitled to
immediate injunctive relief or specific performance without bond or the
necessity of showing actual monetary damages in order to enforce or prevent any
violations of the provisions of this Agreement.
7.13 Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
7.14 Final Agreement. This Agreement, together with the Asset
Acquisition Agreement and all other agreements entered into by the parties
hereto pursuant to the Asset Acquisition Agreement, constitutes the complete and
final agreement of the parties concerning the matters referred to herein, and
supersedes all prior agreements and understandings.
7.15 No Strict Construction. The language used in this Agreement
will be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction will be used against any
Person.
The parties hereto have executed this Registration Rights Agreement as of
the date first set forth above.
TEGAL CORPORATION
By:/s/ Xxxxxxx X. Xxxxxx .
------------------------------------------
Xxxxxxx X. Xxxxxx
Chairman, President & CEO
FIRST DERIVATIVE SYSTEMS, INC.
By:/s/ Xxxx Xxxxxx .
------------------------------------------
Xxxx Xxxxxx
Chairman & CEO
SHAREHOLDERS' REPRESENTATIVE
By:/s/ Xxxx Xxxxxx .
------------------------------------------
Xxxx Xxxxxx
SIGNATURE PAGE TO THE
REGISTRATION RIGHTS AGREEMENT
SCHEDULE A
SHAREHOLDERS AND CREDITORS OF FDSI
