TEGAL CORP /DE/
<DOCUMENT>
<TYPE>EX-10.10
<SEQUENCE>7
<FILENAME>ex10_11.htm
<TEXT>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>THIS WARRANT AND THE SHARES ISSUABLE
HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR ANY
APPLICABLE STATE SECURITIES LAW, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED
WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO RULE 144 AND AN
EXEMPTION UNDER APPLICABLE STATE LAW OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
THE CORPORATION AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED. </FONT></P>

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<A NAME=A001></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>WARRANT TO PURCHASE
STOCK </FONT></H1>

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    <td width="21%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Corporation:</FONT></td>
    <td width="79%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Tegal
Corporation </FONT></td>
  </tr>
  <tr>
    <td width="21%"><font size="2">Number of Shares:</font></td>
    <td width="79%"><font size="2">An amount equal to $250,000 divided by the Initial Exercise Price</font></td>
  </tr>
  <tr>
    <td width="21%"><font size="2">Class of Stock:</font></td>
    <td width="79%"><font size="2">Common Stock</font></td>
  </tr>
  <tr>
    <td width="21%" valign="top"><font size="2">Initial Exercise Price: </font>
    </td>
    <td width="79%"><font size="2">The  greater  of (i) $2.00 per  share or (ii) a price  per  share  equal to the  average
    </font><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
closing
price per share of the Company&#146;s common stock for the seven trading days immediately
preceding the Issue Date. </FONT></td>
  </tr>
  <tr>
    <td width="21%"><font size="2">Issue Date:</font></td>
    <td width="79%"><font size="2">June 26, 2002</font></td>
  </tr>
  <tr>
    <td width="21%"><font size="2">Expiration Date:</font></td>
    <td width="79%"><font size="2">June 25, 2009</font>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIS
WARRANT CERTIFIES THAT, for the agreed upon value of $1.00 and for other good and valuable
consideration, SILICON VALLEY BANK (&#147;Holder&#148;) is entitled to purchase the number
of fully paid and nonassessable shares of the class of securities (the &#147;Shares&#148;)
of the corporation (the &#147;Company&#148;) at the initial exercise price per Share (the
&#147;Warrant Price&#148;) all as set forth above and as adjusted pursuant to
Article&nbsp;2 of this Warrant, subject to the provisions and upon the terms and
conditions set forth in this Warrant. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ARTICLE 1. <U>EXERCISE</U>. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1
<U>Method of Exercise</U>. Holder may exercise this Warrant by delivering a duly executed
Notice of Exercise in substantially the form attached as Appendix 1 to the principal
office of the Company set forth in Section 5.5 of this Warrant. Unless Holder is
exercising the conversion right set forth in Section 1.2, Holder shall also deliver to the
Company a check for the aggregate Warrant Price for the Shares being purchased. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2
<U>Conversion Right</U>. In lieu of exercising this Warrant as specified in Section 1.1,
Holder may from time to time convert this Warrant, in whole or in part, into a number of
Shares determined by dividing (a) the aggregate fair market value of the Shares or other
securities otherwise issuable upon exercise of this Warrant minus the aggregate Warrant
Price of such Shares by (b) the fair market value of one Share. The fair market value of
the Shares shall be determined pursuant to Section 1.3. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3
<U>Fair Market Value</U>. If the Shares are traded in a public market, the fair market
value of the Shares shall be the closing price of the Shares (or the closing price of the
Company&#146;s stock into which the Shares are convertible) reported for the business day
immediately before Holder delivers its Notice of Exercise to the Company. If the Shares
are not traded in a public market, the Board of Directors of the Company shall determine
fair market value in its reasonable good faith judgment. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.4
<U>Delivery of Certificate and New Warrant</U>. Promptly after Holder exercises or
converts this Warrant, the Company shall deliver to Holder certificates for the Shares
acquired and, if this Warrant has not been fully exercised or converted and has not
expired, a new Warrant representing the Shares not so acquired. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.5
<U>Replacement of Warrants</U>. On receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of
loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory
in form and amount to the Company or, in the case of mutilation, or surrender and
cancellation of this Warrant, the Company shall execute and deliver, in lieu of this
Warrant, a new warrant of like tenor. </FONT></P>

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<FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><font size="2">1.6
<u>Assumption on Sale, Merger, or Consolidation of the Company</u>. </font>
<p><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><font size="2">1.6.1    "<u>Acquisition</u>".  For the purpose of this Warrant,  "Acquisition" means any sale,
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</font><FONT FACE="Times New Roman, Times, Serif" SIZE=2>license, or other disposition of all
or substantially all of the assets of the Company, or any reorganization, consolidation,
or merger of the Company where the holders of the Company&#146;s securities before the
transaction beneficially own less than 50% of the outstanding voting securities of the
surviving entity after the transaction. </FONT></p>
<FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><font size="2">1.6.2
<u>Assumption  of Warrant</u>.  Upon the  closing of any  Acquisition,  the  successor
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</font><FONT FACE="Times New Roman, Times, Serif" SIZE=2>entity shall assume the obligations
of this Warrant, and this Warrant shall be exercisable for the same securities, cash, and
property as would be payable for the Shares issuable upon exercise of the unexercised
portion of this Warrant as if such Shares were outstanding on the record date for the
Acquisition and subsequent closing. The Initial Exercise Price and/or number of Shares
shall be adjusted accordingly. </FONT>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ARTICLE 2. <U>ADJUSTMENTS TO THE
SHARES</U>. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1
<U>Stock Dividends, Splits, Etc</U>. If the Company declares or pays a dividend on its
common stock (or the Shares if the Shares are securities other than common stock) payable
in common stock, or other securities, subdivides the outstanding common stock into a
greater amount of common stock, or, if the Shares are securities other than common stock,
subdivides the Shares in a transaction that increases the amount of common stock into
which the Shares are convertible, then upon exercise of this Warrant, for each Share
acquired, Holder shall receive, without cost to Holder, the total number and kind of
securities to which Holder would have been entitled had Holder owned the Shares of record
as of the date the dividend or subdivision occurred. If the outstanding shares are
combined or consolidated, by reclassification or otherwise, into a lesser number of
shares, the Initial Exercise Price shall be proportionately increased. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2
<U>Reclassification, Exchange, Combinations or Substitution</U>. Upon any
reclassification, exchange, substitution, or other event that results in a change of the
number and/or class of the securities issuable upon exercise or conversion of this
Warrant, Holder shall be entitled to receive, upon exercise or conversion of this Warrant,
the number and kind of securities and property that Holder would have received for the
Shares if this Warrant had been exercised immediately before such reclassification,
exchange, substitution, or other event. Such an event shall include any automatic
conversion of the outstanding or issuable securities of the Company of the same class or
series as the Shares to common stock pursuant to the terms of the Company&#146;s Articles
of Incorporation upon the closing of a registered public offering of the Company&#146;s
common stock. The Company or its successor shall promptly issue to Holder a new Warrant
for such new securities or other property. The new Warrant shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments provided for
in this Article 2 including, without limitation, adjustments to the Initial Exercise Price
and to the number of securities or property issuable upon exercise of the new Warrant. The
provisions of this Section 2.2 shall similarly apply to successive reclassifications,
exchanges, substitutions, or other events. </FONT></P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH="100%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3
<U>Adjustments for Diluting Issuances</U>. The Warrant Price and the number of Shares
issuable upon exercise of this Warrant or, if the Shares are Preferred Stock, the number
of shares of common stock issuable upon conversion of the Shares, shall be subject to
adjustment, from time to time in the manner set forth in the Company&#146;s Certificate of
Incorporation. The provisions set forth for the Shares in the Company&#146;s Certificate
of Incorporation relating to the above in effect as of the Issue Date may not be amended,
modified or waived, without the prior written consent of Holder unless such amendment,
modification or waiver affects Holder in the same manner as they affect all other
shareholders of the same series of shares granted to Holder. </FONT></TD>
</TR>
</TABLE>

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<FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4
<U>No Impairment</U>. The Company shall not, by amendment of its Articles of Incorporation
or through a reorganization, transfer of assets, consolidation, merger, dissolution,
issue, or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed under this
Warrant by the Company, but shall at all times in good faith assist in carrying out of all
the provisions of this Article 2 and in taking all such action as may be necessary or
appropriate to protect Holder&#146;s rights under this Article against impairment. </FONT>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5
<U>Fractional Shares</U>. No fractional Shares shall be issuable upon exercise or
conversion of the Warrant and the number of Shares to be issued shall be rounded down to
the nearest whole Share. If a fractional share interest arises upon any exercise or
conversion of the Warrant, the Company shall eliminate such fractional share interest by
paying Holder the amount computed by multiplying the fractional interest by the fair
market value of a full Share. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6
<U>Certificate as to Adjustments</U>. Upon each adjustment of the Warrant Price, the
Company shall promptly notify Holder in writing, and, at the Company&#146;s expense,
promptly compute such adjustment, and furnish Holder with an officer&#146;s certificate
setting forth such adjustment and the facts upon which such adjustment is based. The
Company shall, upon written request, furnish Holder a certificate setting forth the
Warrant Price in effect upon the date thereof and the series of adjustments leading to
such Warrant Price. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ARTICLE 3. <U>
REPRESENTATIONS AND COVENANTS OF THE COMPANY</U>. </FONT></P>

                  <FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><font size="2">3.1      Representations  and  Warranties.  The Company  represents and warrants to the Holder as
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</font><FONT FACE="Times New Roman, Times, Serif" SIZE=2>follows: </FONT>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;The initial Warrant Price referenced on the first page of this Warrant is not
          greater than (i) the price per share at which the Shares were last issued in an
          arms-length transaction in which at least $500,000 of the Shares were sold and
          (ii) the fair market value of the Shares as of the date of this Warrant. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) All Shares which may be issued upon the exercise of the purchase right
          represented by this Warrant, and all securities, if any, issuable upon
          conversion of the Shares, shall, upon issuance, be duly authorized, validly
          issued, fully paid and nonassessable, and free of any liens and encumbrances
          except for restrictions on transfer provided for herein or under applicable
          federal and state securities laws. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;The capitalization table previously provided to Holder remains true and complete
          as of the Issue Date. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2
<U>Notice of Certain Events</U>. If the Company proposes at any time (a) to
declare any dividend or distribution upon its common stock, whether in cash,
property, stock, or other securities and whether or not a regular cash dividend;
(b) to offer for subscription pro rata to the holders of any class or series of
its stock any additional shares of stock of any class or series or other rights;
(c) to effect any reclassification or recapitalization of common stock; (d) to
merge or consolidate with or into any other corporation, or sell, lease,
license, or convey all or substantially all of its assets, or to liquidate,
dissolve or wind up; or (e) offer holders of registration rights the opportunity
to participate in an underwritten public offering of the Company&#146;s securities </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>for cash, then, in
connection with each such event, the Company shall give Holder (1) at least 10
days prior written notice of the date on which a record will be taken for such
dividend, distribution, or subscription rights (and specifying the date on which
the holders of common stock will be entitled thereto) or for determining rights
to vote, if any, in respect of the matters referred to in (c) and (d) above; (2)
in the case of the matters referred to in (c) and (d) above at least 10 days
prior written notice of the date when the same will take place (and specifying
the date on which the holders of common stock will be entitled to exchange their
common stock for securities or other property deliverable upon the occurrence of
such event); and (3) in the case of the matter referred to in (e) above, the
same notice as is given to the holders of such registration rights. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3
<U>Registration Under Securities Act of 1933, as amended</U>. The Company agrees that the
Shares shall be entitled to the registration rights set forth in the Company&#146;s Unit
Purchase Agreement dated December 31, 2001. The provisions set forth in the Company&#146;s
Unit Purchase Agreement relating to the above in effect as of the Issue Date may not be
amended, modified or waived without the prior written consent of Holder unless such
amendment, modification or waiver affects Holder in the same manner as they affect all
other shareholders of the same series of shares granted to the Holder . </FONT></P>

ARTICLE 4.  REPRESENTATIONS,  WARRANTIES  OF THE  HOLDER.  The Holder  represents  and  warrants  to the Company as
follows:

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1
<U>Purchase for Own Account.</U> Except for transfers to Holder&#146;s affiliates, this
Warrant and the securities to be acquired upon exercise of this Warrant by the Holder will
be acquired for investment for the Holder&#146;s account, not as a nominee or agent, and
not with a view to the public resale or distribution within the meaning of the 1933 Act,
and the Holder has no present intention of selling, granting any participation in, or
otherwise distributing the same. If not an individual, the Holder also represents that the
Holder has not been formed for the specific purpose of acquiring this Warrant or the
Shares. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2
<U>Disclosure of Information.</U> The Holder has received or has had full access to all
the information it considers necessary or appropriate to make an informed investment
decision with respect to the acquisition of this Warrant and its underlying securities.
The Holder further has had an opportunity to ask questions and receive answers from the
Company regarding the terms and conditions of the offering of this Warrant and its
underlying securities and to obtain additional information (to the extent the Company
possessed such information or could acquire it without unreasonable effort or expense)
necessary to verify any information furnished to the Holder or to which the Holder has
access. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3
<U>Investment Experience.</U> The Holder understands that the purchase of this Warrant and
its underlying securities involves substantial risk. The Holder: (i) has experience as an
investor in securities of companies in the development stage and acknowledges that the
Holder is able to fend for itself, can bear the economic risk of such Holder&#146;s
investment in this Warrant and its underlying securities and has such knowledge and
experience in financial or business matters that the Holder is capable of evaluating the
merits and risks of its investment in this Warrant and its underlying securities and/or
(ii) has a preexisting personal or business relationship with the Company and certain of
its officers, directors or controlling persons of a nature and duration that enables the
Holder to be aware of the character, business acumen and financial circumstances of such
persons. </FONT></P>

<FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><font size="2">4.4
<u>Accredited  Investor  Status</u>.  The Holder is an "accredited  investor"  within the meaning of Regulation D
promulgated under the 1933 Act.

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ARTICLE 5. <U>MISCELLANEOUS</U>. </FONT></P>

                  <FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><font size="2">5.1
<u>Term</u>: This Warrant is exercisable in whole or in part at any time and
from time to time on or before the Expiration Date. </font>

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<p><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><font size="2">5.2
<u>Legends</u>. This Warrant and the Shares shall be imprinted with a legend in
substantially the following form:

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<TR VALIGN=TOP>
<TD WIDTH="5%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH="95%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR UNDER ANY
APPLICABLE STATE LAWS, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION THERE OF UNDER SUCH ACT AND AN EXEMPTION UNDER APPLICABLE STATE LAW
OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED. </FONT></TD>
</TR>
</TABLE>
<BR>

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<FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3
<U>Compliance with Securities Laws on Transfer</U>. This Warrant and the Shares issuable
upon exercise of this Warrant may not be transferred or assigned in whole or in part
without compliance with applicable federal and state securities laws by the transferor and
the transferee (including, without limitation, the delivery of investment representation
letters and legal opinions reasonably satisfactory to the Company, as reasonably requested
by the Company). The Company shall not require Holder to provide an opinion of counsel if
the transfer is to an affiliate of Holder or if there is no material question as to the
availability of current information as referenced in Rule 144(c), Holder represents that
it has complied with Rule 144(d) and (e) in reasonable detail, the selling broker
represents that it has complied with Rule 144(f), and the Company is provided with a copy
of Holder&#146;s notice of proposed sale. </FONT>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4
<U>Transfer Procedure</U>. Subject to the provisions of Section 5.3, upon receipt by
Holder of the executed Warrant, Holder will transfer all or part of this Warrant or the
Shares issuable upon exercise of this Warrant (or the securities issuable, directly or
indirectly, upon conversion of the Shares, if any) to Silicon Valley Bancshares,
Holder&#146;s parent company. Subject to the provisions of Section 5.3, Holder or Silicon
Valley Bancshares (if applicable) may transfer all or part of this Warrant or the Shares
issuable upon exercise of this Warrant (or the securities issuable, directly or
indirectly, upon conversion of the Shares, if any) to The Silicon Valley Bank Foundation,
or to any affiliate of Holder, or to any other transferee, by giving the Company notice of
the portion of the Warrant being transferred with the name, address and taxpayer
identification number of the transferee and surrendering this Warrant to the Company for
reissuance to the transferee(s) (and Holder if applicable). The Company may refuse to
transfer this Warrant to any person who directly competes with the Company unless the
Company&#146;s stock is publicly traded. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5
<U>Notices</U>. All notices and other communications from the Company to the Holder, or
vice versa, shall be deemed delivered and effective when given personally or mailed by
first-class registered or certified mail, postage prepaid, at such address as may have
been furnished to the Company or the Holder, as the case may be, in writing by the Company
or such holder from time to time. All notices to the Holder shall be addressed as follows: </FONT></P>

                           <FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><font size="2">Silicon Valley Bank
                           <br>
</font><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><font size="2">Attn:  Treasury Department
                           <br>
</font><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><font size="2">3003 Tasman Drive, HG 110
                           <br>
</font><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><font size="2">Santa Clara, CA 95054

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>All notices to the Company shall be
addressed as follows: </FONT></P>

                           <FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><font size="2">Tegal Corporation
                           <br>
</font><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><font size="2">Attn:  Kathy Petrini
<br>
</font><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><font size="2">2201 South McDowell Blvd.
                           <br>
</font><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><font size="2">Petaluma, CA 94954

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</font>

<hr STYLE="page-break-after:always">

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.6
<U>Waiver</U>. This Warrant and any term hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party against which enforcement
of such change, waiver, discharge or termination is sought. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.7 <U>Attorney&#146;s Fees</U>. In
the event of any dispute between the parties concerning the terms and provisions of this
Warrant, the party prevailing in such dispute shall be entitled to collect from the other
party all costs incurred in such dispute, including reasonable attorney&#146;s fees. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.8
<U>Automatic Conversion upon Expiration</U>. In the event that, upon the Expiration Date,
the fair market value of one Share (or other security issuable upon the exercise hereof)
as determined in accordance with Section 1.3 above is greater than the Exercise Price in
effect on such date, then this Warrant shall automatically be deemed on and as of such
date to be converted pursuant to Section 1.2 above as to all Shares (or such other
securities) for which it shall not previously have been exercised or converted, and the
Company shall promptly deliver a certificate representing the Shares (or such other
securities) issued upon such conversion to the Holder. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.9
<U>Governing Law</U>. This Warrant shall be governed by and construed in accordance with
the laws of the State of California, without giving effect to its principles regarding
conflicts of law. </FONT></P>

                                                              <table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" id="AutoNumber2">
                                                                <tr>
                                                                  <td width="50%">&nbsp;</td>
                                                                  <td width="50%">
                                                                  <font size="2">"COMPANY"
                                                                  <br>
                                                                  Tegal
                                                                  Corporation
                                                                  </font></td>
                                                                </tr>
                                                                <tr>
                                                                  <td width="50%">&nbsp;</td>
                                                                  <td width="50%">&nbsp;</td>
                                                                </tr>
                                                                <tr>
                                                                  <td width="50%">&nbsp;</td>
                                                                  <td width="50%">
                                                                  <font size="2">By:
                                                                  <u>/s/   Michael L. Parodi&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                                                                  </u></font>
                                                                  </td>
                                                                </tr>
                                                                <tr>
                                                                  <td width="50%">&nbsp;</td>
                                                                  <td width="50%">
                                                                  <font size="2">Name:  Michael L. Parodi
                                                                  </font></td>
                                                                </tr>
                                                                <tr>
                                                                  <td width="50%">&nbsp;</td>
                                                                  <td width="50%">
                                                                  <font size="2">
                                                                  Title:
                                                                  Chairman of
                                                                  the Board, <br>
                                                                  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;President
                                                                  or Vice
                                                                  President
                                                                  </font></td>
                                                                </tr>
                                                                <tr>
                                                                  <td width="50%">&nbsp;</td>
                                                                  <td width="50%">&nbsp;</td>
                                                                </tr>
                                                                <tr>
                                                                  <td width="50%">&nbsp;</td>
                                                                  <td width="50%">
                                                                  <font size="2">By:
                                                                  <u>/s/   Kathy
                                                                  Petrini&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                                                                  </u></font>
                                                                  </td>
                                                                </tr>
                                                                <tr>
                                                                  <td width="50%">&nbsp;</td>
                                                                  <td width="50%">
                                                                  <font size="2">Name:
                                                                  Kathy Petrini</font></td>
                                                                </tr>
                                                                <tr>
                                                                  <td width="50%">&nbsp;</td>
                                                                  <td width="50%">
                                                                  <font size="2">
                                                                  Title: Chief
                                                                  Financial
                                                                  Officer,
                                                                  Secretary, <br>
                                                                  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Assistant
                                                                  Treasurer or
                                                                  Assistant
                                                                  Secretary</font></td>
                                                                </tr>
                                                                <tr>
                                                                  <td width="50%">&nbsp;</td>
                                                                  <td width="50%">&nbsp;</td>
                                                                </tr>
                                                                <tr>
                                                                  <td width="50%">&nbsp;</td>
                                                                  <td width="50%">
                                                                  <font size="2">
                                                                  &quot;HOLDER&quot;</font></td>
                                                                </tr>
                                                                <tr>
                                                                  <td width="50%">&nbsp;</td>
                                                                  <td width="50%">&nbsp;</td>
                                                                </tr>
                                                                <tr>
                                                                  <td width="50%">&nbsp;</td>
                                                                  <td width="50%">
                                                                  <font size="2">By:
                                                                  <u>/s/
                                                                  Patrick J.
                                                                  O'Donnell&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                                                                  </u></font>
                                                                  </td>
                                                                </tr>
                                                                <tr>
                                                                  <td width="50%">&nbsp;</td>
                                                                  <td width="50%">
                                                                  <font size="2">Name:
                                                                  Patrick J.
                                                                  O'Donnell</font></td>
                                                                </tr>
                                                                <tr>
                                                                  <td width="50%">&nbsp;</td>
                                                                  <td width="50%">
                                                                  <font size="2">
                                                                  Title: Vice
                                                                  President</font></td>
                                                                </tr>
</table>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Dated: June 26, 2002 </FONT></P>


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<hr STYLE="page-break-after:always">





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<A NAME=A005></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>APPENDIX 1 </FONT></P>

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<A NAME=A007></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>NOTICE OF EXERCISE</U> </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;Holder elects to purchase ___________ shares of the Common/Series ______
          Preferred [strike one] Stock of _____________________ pursuant to the terms of
          the attached Warrant, and tenders payment of the purchase price of the shares in
          full. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;Holder elects to convert the attached Warrant into Shares/cash [strike one] in
          the manner specified in the Warrant. This conversion is exercised for
          _____________________ of the Shares covered by the Warrant. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Strike
paragraph that does not apply.] </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;Please issue a certificate or certificates representing the shares in the name
          specified below: </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><font size="2">___________________________________________________
<br>
</font><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><font size="2">Holders Name


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</font> </P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><font size="2">___________________________________________________
<br>
&nbsp;</font></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><font size="2">___________________________________________________
<br>
<br>
</font><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><font size="2">(Address)

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     </font> </P>

     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;The undersigned represents it is acquiring the shares solely for its own account
          and not as a nominee for any other party and not with a view toward the resale
          or distribution except in compliance with applicable securities laws. </FONT></P>

                                                              <font size="2">HOLDER:

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</font>
<P><font size="2">_______________________________</font></P>

                                                              <font size="2">By:_______________________________

                                                              <br>
<br>
Name:_____________________________<br>
<br>
Title:______________________________

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</font>
<P><font size="2"><br>
_________________ <br>
</font><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Date) </FONT> </P>


</TEXT>
</DOCUMENT>
