REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into this 28th day of May, 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 28, 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.
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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.
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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;
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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.
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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.
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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.
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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.
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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.
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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.
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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
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SCHEDULE A
SHAREHOLDERS AND CREDITORS OF FDSI
FDSI Shareholder Trust
Xxxxx Xxxxxxxxx
Xxxx Xxxxxxxxx
Xxxxxxx Asset Management
Xxx Xxxxxxx
Xxxxx Xxxxxxxx
Xxxxx Xxxxx
Tan Xxx
Xxx Xxxxxxx
Xxxxx Xxxxxxx
CDE ResMap
Xxxxx Xxxxxxx
Xxxx Xxxxxx
Xxxxxxxx Xxxxxx
Xxxxxx Xxxxxx
Xxxx-Xxxxxxxx Xxxxxx
Xxx Xxxxxx
Xxxxx Xxxxxx
Xxxxxx Xxxx
Xxxx Xxxxx
Xxxx Xxxxxxx
Xxx Xxxxx
Xxxx Xxxxxxxx
Garage Securities, Inc.
Xxx Xxxxxx
Xxxxx Xxxxx Living Trust
Birger Gneuss
Joachim Gneuss
Xxxxxx Gneuss
Xxxx Xxxxx
Xxxx Xxxxxx
Xxxx Xxxxxx
Xxx Xxxxxx
Xxxxxx Xxxxxxx
Xxx Xxxx
Xxxx Xxxx
Xxxx Kazmakites
Xxxxx Xxxxx
Shin Xxxxxx
Xxxxxxx Lachaise
Xxxxx Xxxxxxx
ICOM Technology International Pte Ltd (XXX XXX)
Xxxx XxxXxxxxx
Xxxx Myataki
Xxxx Xxxxx
Xxxx Xxxxxx
Nida & Xxxxxxx LLP
Xxx Xxxx
Xxxxx Xxxxxx
Xxxxxxx Xxxxxx
Xxx Xxxxxxxx
Xxx Xxxxx
Xxx Xxxxxxx
Xxx Xxxxxxxx
Xxxx Xxxxxxxx
Xxxxxxx Xxxxxx
Xxxxx Rack
Xxxxxx Xxxx
Xxxxxx Xxxxxx
Xxxxxx Xxxxxxx
Xxxxxx Xxxxx
Xxxx Xxxx
Xxx Xxxxxx
Xxx Xxxxxx
Timberline Opportunity Partners, L.P.
Xxxx Xxxxxx
Trust Automation
Xxxxx Xxxxxx
Xxx Xxxxx
Xxxxxxx Xxxx
Xxxxxx Xxxxxxxx
Xxxxxxx Xxxxxxx
Xxxxxxx Xxxxxx
Xxxxxx Xxxx
Xxxxx Xxxxxxx
Xxxxx Xxxxxx
Xxxxx Xxx
