EXHIBIT (i)
FORM OF UNIT PURCHASE AGREEMENT
Tegal Corporation
0000 Xxxxx XxXxxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000
Ladies & Gentlemen:
The undersigned, _________________________________(the
"Investor"), hereby confirms its agreement with you as follows:
1. This Unit Purchase Agreement (the "Agreement") is made as of ____________
between Tegal Corporation, a Delaware corporation (the "Company"), and the
Investor.
2. The Company has authorized the sale and issuance of up to ________ units (the
"Units"), each unit consisting of one share (collectively, the "Shares") of
common stock of the Company, $0.01 par value per share (the "Common Stock") and
one warrant to purchase one-half of a share of Common Stock (collectively the
"Warrant Shares"), exercisable at $2.50 per share (the "Warrants"), subject to
adjustment by the Company's Board of Directors, to certain investors in a
private placement (the "Offering").
3. The Company and the Investor agree that the Investor will purchase from the
Company and the Company will issue and sell to the Investor ______ Units for a
purchase price of $1.40 per Unit, or an aggregate purchase price of $_________,
pursuant to the Terms and Conditions for Purchase of Units attached hereto as
Annex I and incorporated herein by reference as if fully set forth herein.
Unless otherwise requested by the Investor, certificates representing the Shares
and Warrants purchased by the Investor will be registered in the Investor's name
and address as set forth below.
4. The Investor represents that, except as set forth below, (a) it has had no
position, office or other material relationship within the past three years with
the Company or its affiliates, (b) neither it, nor any group of which it is a
member or to which it is related, beneficially owns (including the right to
acquire or vote) any securities of the Company and (c) it has no direct or
indirect affiliation or association with any NASD member. Exceptions:
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(If no exceptions, write "none." If left blank, response
will be deemed to be "none.")
Please confirm that the foregoing correctly sets forth the
agreement between us by signing in the space provided below for that purpose.
AGREED AND ACCEPTED:
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TEGAL CORPORATION INVESTOR
By:
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By:
Title: Print Name:
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Title:
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Address:
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Tax ID No.:
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Contact name:
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Telephone:
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Name in which Shares should be registered
(if different):
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ANNEX I
TERMS AND CONDITIONS FOR PURCHASE OF UNITS
1. Authorization and Sale of the Units. Subject to the terms and
conditions of this Agreement, the Company has authorized the sale of up to
________ Units in a private placement exempt from the registration requirements
of Section 5 of the Securities Act of 1933, as amended (the "Offering"). The
Company reserves the right to increase or decrease this number.
2. Agreement to Sell and Purchase the Units; Closing Date.
2.1 At the Closing (as defined in Section 3), the Company will
sell to the Investor, and the Investor will purchase from the Company, upon the
terms and conditions hereinafter set forth, the number of Units set forth on the
signature page hereto at the purchase price set forth on such signature page.
2.2 The Company may enter into this same form of Unit Purchase
Agreement with certain other investors (the "Other Investors") and expects to
complete sales of Units to them. (The Investor and the Other Investors are
hereinafter sometimes collectively referred to as the "Investors," and this
Agreement and the Unit Purchase Agreements executed by the Other Investors are
hereinafter sometimes collectively referred to as the "Agreements.") The Company
will accept executed Agreements from Investors for the purchase of Units
commencing upon the date on which the Company provides the Investors with the
proposed purchase price per Share and concluding upon the date on which the
Company has notified the Investors in writing that it is no longer accepting
Agreements from Investors for the purchase of Units, and in no event later than
_________. The Company may not enter into any Agreements after the Closing Date.
3. Delivery of the Units after Closing. The completion of the
purchase and sale of the Units shall occur on or before )________ (the "Closing
Date") at the offices of the Company's counsel. Within thirty days of the
Closing Date, the Company shall deliver to the Investor one or more stock
certificates representing the number of Shares and Warrants set forth on the
signature page hereto, each such certificate to be registered in the name of the
Investor or, if so indicated on the signature page hereto, in the name of a
nominee designated by the Investor.
The Company's obligation to issue the Units to the Investor shall
be subject to the following conditions, any one or more of which may be waived
by the Company: (a) receipt by the Company on the Closing Date of a certified or
official bank check or wire transfer of funds in the full amount of the purchase
price for the Units being purchased hereunder as set forth on the signature page
hereto; (b) completion of the purchases and sales under the Agreements with the
Other Investors; and (c) the accuracy of the representations and warranties made
by the Investors and the fulfillment of those undertakings of the Investors to
be fulfilled prior to the Closing.
The Investor's obligation to purchase the Units shall be subject
to the following condition, which may be waived by the Investor: the
representations and warranties of the Company set forth herein shall be true and
correct in all material respects.
4. Representations, Warranties and Covenants of the Company. The
Company hereby represents and warrants to, and covenants with, the Investor, as
follows:
4.1 Organization. The Company is duly incorporated, validly
existing and in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and to conduct its business
as described in the Confidential Offering Memorandum dated __________
distributed in connection with the sale of the Units (including the documents
incorporated by reference therein, the "Placement Memorandum") and is registered
or qualified to do business and is in good standing in each jurisdiction in
which it owns or leases property or transacts business and where the failure to
be so registered or qualified would have a material adverse effect upon the
business or financial condition of the Company.
4.2 Due Authorization. The execution, delivery and performance of
the Agreements and the Warrants have been duly authorized by all necessary
corporate action of the Company, and the Agreements and Warrants have been duly
executed and delivered by the Company and constitute legally valid and binding
agreements of the Company, enforceable against the Company in accordance with
their terms, except as rights to indemnity and contribution may be limited by
state or federal securities laws or the public policy underlying such laws,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' and contracting
parties' rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
4.3 Non-Contravention. The execution and delivery of the
Agreements and the Warrants and the issuance and sale of the Units by the
Company pursuant to the Agreements and the Warrants on the date hereof do not
(A) violate the charter or bylaws of the Company; (B) result in the breach of or
a default under any of the material agreement to which the Company is bound; (C)
violate any federal or California statute, rule or regulation applicable to the
Company; or (D) require any consents, approvals, authorizations, registrations,
declarations or filings by the Company under any federal or California statute,
rule or regulation applicable to the Company other than such as have been made
or obtained, and except for any securities filings required to be made under
federal or state securities laws or by the Nasdaq National Market.
4.4 The Shares; the Warrant Shares. The Shares and the Warrant
Shares to be issued and sold by the Company pursuant to the Agreements have been
duly authorized by all necessary corporate action of the Company, and when
issued and paid for by you in accordance with the terms of this Agreement, will
be validly issued, fully paid and nonassessable. The Company shall reserve and
keep available, solely for issuance or delivery upon exercise of such Investor's
Warrants, the number of shares of Common Stock as from time to time shall be
receivable upon the exercise of the Warrants.
4.5 Legal Proceedings. There is no material legal or governmental
proceeding pending or, to the knowledge of the Company, threatened or
contemplated to which the Company is or may be a party or of which the business
or property of the Company is or may be subject that is not disclosed in the
Placement Memorandum or the SEC Filings (as defined below).
4.6 No Violations. The Company is not in violation of its charter
or bylaws, in violation of any law, administrative regulation, ordinance or
order of any court or governmental agency, arbitration panel or authority
applicable to the Company which violation, individually or in the aggregate,
would be reasonably likely to have a material adverse effect on the business or
financial condition of the Company or in default in any material respect in the
performance of any material agreement or instrument to which the Company is a
party or by which the Company is bound or by which the properties of the Company
are bound, which would be reasonably likely to have a material adverse effect
upon the business or financial condition of the Company.
4.7 Governmental Permits, Etc. Except as disclosed in the SEC
Filings, the Company has all necessary franchises, licenses, certificates and
other authorizations from any foreign, federal, state or local government or
governmental agency, department, or body that are currently necessary for the
operation of the business of the Company as described in the Placement
Memorandum except where the failure to currently possess could not reasonably be
expected to have a material adverse effect.
4.8 Intellectual Property. Subject to the matters discussed under
"Risk Factors" in the Placement Memorandum, (i) the Company owns or possesses
sufficient rights to use all material patents, patent rights, trademarks,
copyrights, licenses, inventions, trade secrets, trade names and know-how
(collectively, "Intellectual Property") described or referred to in the
Placement Memorandum as owned by it or that are necessary for the conduct of its
business as now conducted or as proposed to be conducted as described in the
Placement Memorandum except where the failure to currently own or possess would
not have a material adverse effect on the financial condition, earnings,
operations, business or business prospects of the Company, (ii) the Company has
not received any notice of, and has no knowledge of, any infringement of
asserted rights of a third party with respect to any Intellectual Property that,
individually or in the aggregate, would have a material adverse effect on the
financial condition or business of the Company and (iii) the Company has not
received any notice of any infringement of
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rights of a third party with respect to any Intellectual Property that,
individually or in the aggregate, would have a material adverse effect upon the
business or financial condition of the Company.
4.9 Financial Statements. The financial statements of the Company
and the related notes contained in the Company's Annual Report on Form 10-K, as
amended, for the fiscal year ended March 31, 2001 and its Quarterly Report on
Form 10-Q, as amended, for the fiscal quarter ended June 30, 2001 present
fairly, in accordance with generally accepted accounting principles, the
financial position of the Company as of the dates indicated, and the results of
its operations and cash flows for the periods therein specified. Such financial
statements (including the related notes) have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the periods therein specified.
4.10 No Material Adverse Change. Except as disclosed in the SEC
Filings, since June 30, 2001, there has not been (i) any material adverse change
in the financial condition or earnings of the Company nor has any material
adverse event occurred to the Company, (ii) any material adverse event affecting
the Company, (iii) any obligation, direct or contingent, that is material to the
Company, incurred by the Company, except obligations incurred in the ordinary
course of business, (iv) any dividend or distribution of any kind declared, paid
or made on the capital stock of the Company or (v) any loss or damage (whether
or not insured) to the physical property of the Company which has been sustained
which has a material adverse effect on the condition (financial or otherwise),
earnings, operations, business or business prospects of the Company.
4.11 NASDAQ Compliance. The Company's Common Stock is registered
pursuant to Section 12(g) of the Exchange Act and is listed on The Nasdaq Stock
Market, Inc. National Market (the "Nasdaq National Market"), and the Company has
taken no action designed to, or likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act or de-listing the Common
Stock from the Nasdaq National Market, nor has the Company received any
notification that the Securities and Exchange Commission (the "SEC") or the
National Association of Securities Dealers, Inc. ("NASD") is contemplating
terminating such registration or listing.
4.12 Reporting Status. The Company has filed in a timely manner
all documents that the Company was required to file under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") during the 12 months
preceding the date of this Agreement. The following documents (collectively, the
"SEC Filings") complied in all material respects with the SEC's requirements as
of their respective filing dates, and the information contained therein as of
the date thereof did not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein in light of the circumstances under where they were made not
misleading:
(a) The Company's Annual Report on Form 10-Q for the
fiscal quarter ended June 30, 2001 (the "10-Q");
(b) The Company's Annual Report on Form 10-K for the
fiscal year ended March 31, 2001 (the "10-K");
(c) The Company's Proxy Statement for the Annual Meeting
of Stockholders held on September 25, 2001; and
(d) All other documents, if any, filed by the Company with
the SEC since June 30, 2001 as of the date hereof pursuant to the reporting
requirements of the Exchange Act.
4.14 Listing. The Company shall use its best efforts to comply
with all requirements of the National Association of Securities Dealers, Inc.
with respect to the issuance of the Shares and the listing of the Shares and
Warrant Shares on the Nasdaq National Market.
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5. Representations, Warranties and Covenants of the Investor.
5.1 The Investor represents and warrants to, and covenants with,
the Company that: (i) the Investor is an "accredited investor" as defined in
Rule 501(a) of Regulation D promulgated under the Securities Act and the
Investor is also knowledgeable, sophisticated and experienced in making, and is
qualified to make decisions with respect to investments in shares presenting an
investment decision like that involved in the purchase of the Units, including
investments in securities issued by the Company and investments in comparable
companies, and has requested, received, reviewed and considered all information
it deemed relevant in making an informed decision to purchase the Units; (ii)
the Investor is acquiring the Units in the ordinary course of its business and
for its own account for investment only and with no present intention of
distributing any Shares or Warrant Shares or any arrangement or understanding
with any other persons regarding the distribution of such Shares and Warrant
Shares; (iii) the Investor will not, directly or indirectly, offer, sell,
pledge, transfer or otherwise dispose of (or solicit any offers to buy, purchase
or otherwise acquire or take a pledge of) any of the Shares and Warrant Shares
except in compliance with the Securities Act, applicable state securities laws
and the respective rules and regulations promulgated thereunder; (iv) the
Investor has answered all questions on the signature page hereto for use in
preparation of the Registration Statement and the answers thereto are true and
correct as of the date hereof and will be true and correct as of the Closing
Date; (v) the Investor has reviewed copies of the SEC Filings; (vi) the Investor
has had an opportunity to ask questions and receive answers from the management
of the Company regarding the Company, its business and the Offering of the
Units; (vii) the Investor will notify the Company immediately of any change in
any of such information until such time as the Investor has sold all of its
Shares and Warrant Shares or until the Company is no longer required to keep the
Registration Statement effective; and (viii) the Investor has, in connection
with its decision to purchase Units, relied only upon the Placement Memorandum
and the representations and warranties of the Company contained herein. Investor
understands that its acquisition of the Units has not been registered under the
Securities Act or registered or qualified under any state securities law in
reliance on specific exemptions therefrom, which exemptions may depend upon,
among other things, the bona fide nature of the Investor's investment intent as
expressed herein. Investor has completed or caused to be completed and delivered
to the Company the Investor Questionnaire attached as Exhibit B to the Placement
Memorandum, which questionnaire is true and correct in all material respects.
5.2 The Investor acknowledges, represents and agrees that no
action has been or will be taken in any jurisdiction outside the United States
by the Company that would permit an offering, sale or delivery of the Units or
possession or distribution of offering materials in connection with the issue of
the Units. Each Investor outside the United States will comply with all
applicable laws and regulations in each foreign jurisdiction in which it
purchases, offers, sells or delivers Units or has in its possession or
distributes any offering material, in all cases at its own expense.
5.3 The Investor hereby covenants with the Company not to make
any sale of the Shares or Warrants without complying with the provisions of this
Agreement, including Section 7.2 hereof, and without effectively causing the
prospectus delivery requirement under the Securities Act to be satisfied, and
the Investor acknowledges that the certificates evidencing the Shares and
Warrants will be imprinted with a legend that prohibits their transfer except in
accordance therewith. The Investor acknowledges that there may occasionally be
times when the Company determines that it must suspend the use of the Prospectus
forming a part of the Registration Statement, as set forth in Section 7.2(c).
5.4 The Investor further represents and warrants to, and
covenants with, the Company that (i) the Investor has full right, power,
authority and capacity to enter into this Agreement and to consummate the
transactions contemplated hereby and has taken all necessary action to authorize
the execution, delivery and performance of this Agreement, and (ii) this
Agreement constitutes a valid and binding obligation of the Investor enforceable
against the Investor in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' and contracting parties' rights generally and
except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and except as the indemnification agreements of the Investors
herein may be legally unenforceable.
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5.5 Investor will not use any of the restricted Shares or
Warrants acquired pursuant to this Agreement to cover any short position in the
Common Stock of the Company if doing so would be in violation of applicable
securities laws.
5.6 The Investor understands that nothing in the Placement
Memorandum, this Agreement or any other materials presented to the Investor in
connection with the purchase and sale of the Units constitutes legal, tax or
investment advice. The Investor has consulted such legal, tax and investment
advisors as it, in its sole discretion, has deemed necessary or appropriate in
connection with its purchase of the Units.
6. Survival of Representations, Warranties and Agreements.
Notwithstanding any investigation made by any party to this Agreement, all
covenants, agreements, representations and warranties made by the Company and
the Investor herein shall survive the execution of this Agreement, the delivery
to the Investor of the Units being purchased and the payment therefor.
7. Registration of the Shares; Compliance with the Securities
Act.
7.1 Registration Procedures and Expenses. The Company shall:
(a) subject to receipt of necessary information from the
Investors, use its reasonable efforts to prepare and file with the SEC a
registration statement (the "Registration Statement") to enable the resale of
the Shares and Warrant Shares by the Investors from time to time through the
automated quotation system of the Nasdaq National Market or in
privately-negotiated transactions;
(b) use its reasonable efforts, subject to receipt of
necessary information from the Investors, to cause the Registration Statement to
become effective within 90 days after Closing Date;
(c) use its reasonable efforts to prepare and file with
the SEC such amendments and supplements to the Registration Statement and the
Prospectus used in connection therewith as may be necessary to keep the
Registration Statement current and effective for a period not exceeding, with
respect to each Investor's Shares purchased hereunder, the earlier of (i) the
second anniversary of the Closing Date, (ii) the date on which the Investor may
sell all Shares then held by the Investor without restriction by the volume
limitations of Rule 144(e) of the Securities Act or (iii) such time as all
Shares purchased by such Investor in this Offering have been sold pursuant to a
registration statement.
(d) furnish to the Investor with respect to the Shares
registered under the Registration Statement such number of copies of the
Registration Statement, Prospectuses and Preliminary Prospectuses in conformity
with the requirements of the Securities Act and such other documents as the
Investor may reasonably request, in order to facilitate the public sale or other
disposition of all or any of the Shares by the Investor, provided, however, that
the obligation of the Company to deliver copies of Prospectuses or Preliminary
Prospectuses to the Investor shall be subject to the receipt by the Company of
reasonable assurances from the Investor that the Investor will comply with the
applicable provisions of the Securities Act and of such other securities or blue
sky laws as may be applicable in connection with any use of such Prospectuses or
Preliminary Prospectuses;
(e) file documents required of the Company for normal blue
sky clearance in states specified in writing by the Investor, provided, however,
that the Company shall not be required to qualify to do business or consent to
service of process in any jurisdiction in which it is not now so qualified or
has not so consented;
(f) bear all expenses in connection with the procedures in
paragraph (a) through (e) of this Section 7.1 and the registration of the Shares
pursuant to the Registration Statement; and
(g) advise the Investors promptly after it shall receive
notice or obtain knowledge of the issuance of any stop order by the SEC delaying
or suspending the effectiveness of the Registration Statement or of the
initiation or threat of any proceeding for that purpose; and it will promptly
use its reasonable efforts to prevent
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the issuance of any stop order or to obtain its withdrawal at the earliest
possible moment if such stop order should be issued.
The Company understands that the Investor disclaims being an
underwriter, but the Investor being deemed an underwriter by the SEC shall not
relieve the Company of any obligations it has hereunder, provided, however that
if the Company receives notification from the SEC that the Investor is deemed an
underwriter, then the period by which the Company is obligated to submit an
acceleration request to the SEC shall be extended to the earlier of (i) the 90th
day after such SEC notification or (ii) 120 days after the initial filing of the
Registration Statement with the SEC.
7.2 Transfer of Shares After Registration; Suspension.
(a) The Investor agrees that it will not effect any
disposition of the Shares or Warrant Shares or its right to purchase the Shares
or Warrant Shares that would constitute a sale within the meaning of the
Securities Act except as contemplated in the Registration Statement referred to
in Section 7.1 and as described below, and that it will promptly notify the
Company of any changes in the information set forth in the Registration
Statement regarding the Investor or its plan of distribution.
(b) Except in the event that paragraph (c) below applies,
the Company shall (i) if deemed necessary by the Company, prepare and file from
time to time with the SEC a post-effective amendment to the Registration
Statement or a supplement to the related Prospectus or a supplement or amendment
to any document incorporated therein by reference or file any other required
document so that such Registration Statement will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
so that, as thereafter delivered to purchasers of the Shares or Warrant Shares
being sold thereunder, such Prospectus will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; (ii) provide the Investor copies of any
documents filed pursuant to Section 7.2(b)(i); and (iii) inform each Investor
that the Company has complied with its obligations in Section 7.2(b)(i) (or
that, if the Company has filed a post-effective amendment to the Registration
Statement which has not yet been declared effective, the Company will notify the
Investor to that effect, will use its reasonable efforts to secure the
effectiveness of such post-effective amendment as promptly as possible and will
promptly notify the Investor pursuant to Section 7.2(b)(i) hereof when the
amendment has become effective).
(c) Subject to paragraph (d) below, in the event (i) of
any request by the SEC or any other federal or state governmental authority
during the period of effectiveness of the Registration Statement for amendments
or supplements to a Registration Statement or related Prospectus or for
additional information; (ii) of the issuance by the SEC or any other federal or
state governmental authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that purpose;
(iii) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Shares or Warrant Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; or (iv) of any event or
circumstance which, upon the advice of its counsel, necessitates the making of
any changes in the Registration Statement or Prospectus or any document
incorporated or deemed to be incorporated therein by reference so that, in the
case of the Registration Statement, it will not contain any untrue statement of
a material fact or any omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or in the
case of the Prospectus, it will not contain any untrue statement of a material
fact or any omission to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; then the Company shall deliver a
certificate in writing to the Investor (the "Suspension Notice") to the effect
of the foregoing and, upon receipt of such Suspension Notice, the Investor will
refrain from selling any Shares pursuant to the Registration Statement (a
"Suspension") until the Investor's receipt of copies of a supplemented or
amended Prospectus prepared and filed by the Company, or until it is advised in
writing by the Company that the current Prospectus may be used, and has received
copies of any additional or supplemental filings that are incorporated or deemed
incorporated by reference in any such Prospectus. In the event of any
Suspension, the Company will use its reasonable efforts to cause the use of the
Prospectus so suspended to be resumed as soon as reasonably practicable within
20 business days after the delivery of a Suspension Notice to the Investor. In
addition to and without limiting any other
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remedies (including, without limitation, at law or at equity) available to the
Investor, the Investor shall be entitled to specific performance in the event
that the Company fails to comply with the provisions of this Section 7.2(c).
(d) Notwithstanding the foregoing paragraphs of this
Section 7.2, the Investor shall not be prohibited from selling Shares or Warrant
Shares under the Registration Statement as a result of Suspensions on more than
three occasions of not more than 30 days each in any twelve month period unless,
in the good faith judgment of the Company's Board of Directors or upon advice of
counsel, the sale of Shares or Warrant Shares under the Registration Statement
in reliance on this paragraph 7.2(d) would be reasonably likely to cause a
violation of the Securities Act or the Exchange Act and result in potential
liability to the Company.
(e) Provided that a Suspension is not then in effect the
Investor may sell Shares and Warrant Shares under the Registration Statement,
provided that it arranges for delivery of a current Prospectus to the transferee
of such Shares or Warrant Shares. Upon receipt of a request therefor, the
Company has agreed to provide an adequate number of current Prospectuses to the
Investor and to supply copies to any other parties requiring such Prospectuses.
(f) In the event of a sale of Shares or Warrant Shares by
the Investor pursuant to the Registration Statement, the Investor must also
deliver to the Company's transfer agent, with a copy to the Company, a
Certificate of Subsequent Sale substantially in the form attached hereto as
Exhibit A, so that the Shares and Warrant Shares may be properly transferred.
7.3 Indemnification. For the purpose of this Section 7.3:
(i) the term "Selling Stockholder" shall include the Investor and
any affiliate of such Investor;
(ii) the term "Registration Statement" shall include any final
Prospectus, exhibit, supplement or amendment included in or relating to the
Registration Statement referred to in Section 7.1; and
(iii) the term "untrue statement" shall include any untrue
statement or alleged untrue statement, or any omission or alleged omission to
state in the Registration Statement a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(a) The Company agrees to indemnify and hold harmless each
Selling Stockholder from and against any losses, claims, damages or liabilities
to which such Selling Stockholder may become subject (under the Securities Act
or otherwise) insofar as such losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) arise out of, or are based upon (i) any
untrue statement of a material fact contained in the Registration Statement, or
(ii) any failure by the Company to fulfill any undertaking included in the
Registration Statement, and the Company will reimburse such Selling Stockholder
for any reasonable legal or other expenses reasonably incurred in investigating,
defending or preparing to defend any such action, proceeding or claim, or
preparing to defend any such action, proceeding or claim, provided, however,
that the Company shall not be liable in any such case to the extent that such
loss, claim, damage or liability arises out of, or is based upon, an untrue
statement made in such Registration Statement in reliance upon and in conformity
with written information furnished to the Company by or on behalf of such
Selling Stockholder specifically for use in preparation of the Registration
Statement or the failure of such Selling Stockholder to comply with its
covenants and agreements contained in Section 7.2 hereof respecting sale of the
Shares or Warrant Shares or any statement or omission in any Prospectus that is
corrected in any subsequent Prospectus that was delivered to the Investor prior
to the pertinent sale or sales by the Investor.
(b) The Investor agrees to indemnify and hold harmless the
Company (and each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act, each officer of the Company who signs the
Registration Statement and each director of the Company) from and against any
losses, claims, damages or liabilities to which the Company (or any such
officer, director or controlling person) may become subject (under the
Securities Act or otherwise), insofar as such losses, claims, damages or
liabilities (or
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actions or proceedings in respect thereof) arise out of, or are based upon, (i)
any failure to comply with the covenants and agreements contained in Section 7.2
hereof respecting sale of the Shares and Warrant Shares, or (ii) any untrue
statement of a material fact contained in the Registration Statement if such
untrue statement was made in reliance upon and in conformity with written
information furnished by or on behalf of the Investor specifically for use in
preparation of the Registration Statement, and the Investor will reimburse the
Company (or such officer, director or controlling person), as the case may be,
for any legal or other expenses reasonably incurred in investigating, defending
or preparing to defend any such action, proceeding or claim; provided that the
Investor's obligation to indemnify the Company shall be limited to the net
amount received by the Investor from the sale of the Shares and Warrant Shares.
(c) Promptly after receipt by any indemnified person of a
notice of a claim or the beginning of any action in respect of which indemnity
is to be sought against an indemnifying person pursuant to this Section 7.3,
such indemnified person shall notify the indemnifying person in writing of such
claim or of the commencement of such action, but the omission to so notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party under this Section 7.3 (except to the extent that such
omission materially and adversely affects the indemnifying party's ability to
defend such action) or from any liability otherwise than under this Section 7.3.
Subject to the provisions hereinafter stated, in case any such action shall be
brought against an indemnified person, the indemnifying person shall be entitled
to participate therein, and, to the extent that it shall elect by written notice
delivered to the indemnified party promptly after receiving the aforesaid notice
from such indemnified party, shall be entitled to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified person. After notice
from the indemnifying person to such indemnified person of its election to
assume the defense thereof, such indemnifying person shall not be liable to such
indemnified person for any legal expenses subsequently incurred by such
indemnified person in connection with the defense thereof, provided, however,
that if there exists or shall exist a conflict of interest that would make it
inappropriate, in the opinion of counsel to the indemnified person, for the same
counsel to represent both the indemnified person and such indemnifying person or
any affiliate or associate thereof, the indemnified person shall be entitled to
retain its own counsel at the expense of such indemnifying person; provided,
however, that no indemnifying person shall be responsible for the fees and
expenses of more than one separate counsel (together with appropriate local
counsel) for all indemnified parties. In no event shall any indemnifying person
be liable in respect of any amounts paid in settlement of any action unless the
indemnifying person shall have approved the terms of such settlement; provided
that such consent shall not be unreasonably withheld. No indemnifying person
shall, without the prior written consent of the indemnified person, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified person is or could have been a party and indemnification could have
been sought hereunder by such indemnified person, unless such settlement
includes an unconditional release of such indemnified person from all liability
on claims that are the subject matter of such proceeding.
(d) If the indemnification provided for in this Section
7.3 is unavailable to or insufficient to hold harmless an indemnified party
under subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative fault of the Company on the one hand and the Investors
on the other in connection with the statements or omissions or other matters
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative fault shall be determined by reference to, among other things, in the
case of an untrue statement, whether the untrue statement relates to information
supplied by the Company on the one hand or an Investor on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement. The Company and the Investors agree
that it would not be just and equitable if contribution pursuant to this
subsection (d) were determined by pro rata allocation (even if the Investors
were treated as one entity for such purpose) or by any other method of
allocation which does not take into account the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (d), no Investor
shall be required to contribute any amount in excess of the amount by which the
net amount received by the Investor from the sale of the Shares and Warrant
Shares to which such loss relates exceeds the amount of any damages which such
Investor has otherwise been required to pay by reason of
A-9
such untrue statement. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Investors' obligations in this subsection to contribute
are several in proportion to their sales of Shares and Warrant Shares to which
such loss relates and not joint.
(e) The parties to this Agreement hereby acknowledge that
they are sophisticated business persons who were represented by counsel during
the negotiations regarding the provisions hereof including, without limitation,
the provisions of this Section 7.3, and are fully informed regarding said
provisions. They further acknowledge that the provisions of this Section 7.3
fairly allocate the risks in light of the ability of the parties to investigate
the Company and its business in order to assure that adequate disclosure is made
in the Registration Statement as required by the Act and the Exchange Act. The
parties are advised that federal or state public policy as interpreted by the
courts in certain jurisdictions may be contrary to certain of the provisions of
this Section 7.3, and the parties hereto hereby expressly waive and relinquish
any right or ability to assert such public policy as a defense to a claim under
this Section 7.3 and further agree not to attempt to assert any such defense.
7.4 Termination of Conditions and Obligations. The conditions
precedent imposed by Section 5 or this Section 7 upon the transferability of the
Shares and Warrant Shares shall cease and terminate as to any particular number
of the Shares and Warrant Shares when such Shares and Warrant Shares shall have
been effectively registered under the Securities Act and sold or otherwise
disposed of in accordance with the intended method of disposition set forth in
the Registration Statement covering such Shares and Warrant Shares or at such
time as an opinion of counsel satisfactory to the Company shall have been
rendered to the effect that such conditions are not necessary in order to comply
with the Securities Act.
7.5 Information Available. So long as the Registration Statement
is effective covering the resale of Shares and Warrant Shares owned by the
Investor, the Company will furnish to the Investor:
(a) upon the reasonable request of the Investor, one copy
of (i) its Annual Report to Stockholders (which Annual Report shall contain
financial statements audited in accordance with generally accepted accounting
principles by a national firm of certified public accountants), (ii) its Annual
Report on Form 10-K and (iii) its Quarterly Reports on Form 10-Q (the foregoing,
in each case, excluding exhibits);
(b) upon the reasonable request of the Investor, all
exhibits excluded by the parenthetical to subparagraph (a) of this Section 7.5
as filed with the SEC and all other information that is made available to
shareholders; and
(c) upon the reasonable request of the Investor, an
adequate number of copies of the Prospectuses to supply to any other party
requiring such Prospectuses; and the Company, upon the reasonable request of the
Investor, will meet with the Investor or a representative thereof at the
Company's headquarters to discuss all information relevant for disclosure in the
Registration Statement covering the Shares and Warrant Shares and will otherwise
cooperate with any Investor conducting an investigation for the purpose of
reducing or eliminating such Investor's exposure to liability under the
Securities Act, including the reasonable production of information at the
Company's headquarters; provided, that the Company shall not be required to
disclose any confidential information to or meet at its headquarters with any
Investor until and unless the Investor shall have entered into a confidentiality
agreement in form and substance reasonably satisfactory to the Company with the
Company with respect thereto.
8. Notices. All notices, requests, consents and other
communications hereunder shall be in writing, shall be mailed (A) if within
domestic United States by first-class registered or certified airmail, or
nationally recognized overnight express courier, postage prepaid, or by
facsimile, or (B) if delivered from outside the United States, by International
Federal Express or facsimile, and shall be deemed given (i) if delivered by
first-class registered or certified mail domestic, three business days after so
mailed, (ii) if delivered by nationally recognized overnight carrier, one
business day after so mailed, (iii) if delivered by International Federal
Express, two business days after so mailed, (iv) if delivered by facsimile, upon
electric confirmation of receipt and shall be delivered as addressed as follows:
A-10
(a) if to the Company, to:
Tegal Corporation
0000 Xxxxx XxXxxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000
Attn: Finance Department
Phone: (000) 000-0000
Facsimile: (000) 000-0000
(b) with a copy to:
Xxxxxx & Xxxxxxx
000 Xxxxxxxxxxxx Xxxxx
Xxxxx Xxxx, XX 00000
Attn: Xxxxxxxxxxx X. Xxxxxxx, Esq.
Phone: (000) 000-0000
Facsimile: (000) 000-0000
(c) if to the Investor, at its address on the signature page
hereto, or at such other address or addresses as may have been furnished to the
Company in writing.
9. Changes. This Agreement may not be modified or amended except
pursuant to an instrument in writing signed by the Company and the Investor.
10. Headings. The headings of the various sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed to be part of this Agreement.
11. No Brokers. The parties hereto hereby represent that there
are no brokers or finders entitled to compensation in connection with the
transactions contemplated hereby, other than Fechtor, Xxxxxxxx & Co., Inc., who
will be paid a commission and issued warrants by the Company.
12. Severability. In case any provision contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
13. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of California,
without giving effect to the principles of conflicts of law.
14. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties.
15. Rule 144. The Company covenants that it will file the reports
required to be filed by it under the Securities Act and the Exchange Act and the
rules and regulations adopted by the SEC thereunder (or, if the Company is not
required to file such reports, it will, upon the request of any Investor holding
Shares and Warrant Shares purchased hereunder made after the second anniversary
of the Closing Date, make publicly available such information as necessary to
permit sales pursuant to Rule 144 under the Securities Act), and it will take
such further action as any such Investor may reasonably request, all to the
extent required from time to time to enable such Investor to sell Shares and
Warrant Shares purchased hereunder without registration under the Securities Act
within the limitation of the exemptions provided by (a) Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or (b) any
similar rule or regulation hereafter adopted by the SEC. Upon the request of any
such Investor, the Company will deliver to such holder a written statement as to
whether it has complied with such information and requirements.
A-11
INSTRUCTION SHEET FOR INVESTOR
(to be read in conjunction with the entire Unit Purchase Agreement)
A. Complete the following items in the Unit Purchase Agreement:
1. Provide the information regarding the Investor requested on the
signature page (page 1). The Agreement must be executed by an individual
authorized to bind the Investor.
2. Return the signed Unit Purchase Agreement to:
Tegal Corporation Fechtor, Xxxxxxxx & Co., Inc.
0000 Xxxxx XxXxxxxx Xxxxxxxxx 000 Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, XX 00000 Xxxxxx, XX 00000-0000
Attn: Finance Department Attn: Xxxxx Xxxxxx
Phone: (000) 000-0000 Phone: (000) 000-0000
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
An executed original Unit Purchase Agreement or a facsimile
thereof must be received by 5:00 p.m. California time on a date to be
determined and distributed to the Investor at a later date.
B. Instructions regarding the transfer of funds for the purchase of Units
will be delivered via facsimile to the Investor by the Company at a
later date.
C. To resell the Shares and Warrant Shares after the Registration Statement
covering the Shares and Warrant Shares is effective:
(i) Provided that a Suspension of the Registration Statement is
not then in effect pursuant to the terms of the Unit Purchase Agreement,
the Investor may sell Shares and Warrant Shares under the Registration
Statement, provided that it arranges for delivery of a current
Prospectus to the transferee. Upon receipt of a request therefor, the
Company has agreed to provide an adequate number of current Prospectuses
to each investor and to supply copies to any other parties requiring
such Prospectuses.
(ii) The Investor must also deliver to the Company's transfer
agent, with a copy to the Company, a Certificate of Subsequent Sale in
the form attached as Exhibit A to the Form of Letter Regarding Resale
Procedures, so that the Shares and Warrant Shares may be properly
transferred.
A-12
