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<A NAME=A001></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SEVENTH AMENDMENT TO
LEASE AGREEMENT </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        THIS
SEVENTH AMENDMENT TO LEASE AGREEMENT (“this Amendment”) is entered into as of
June 5, 2003 (“Reference Date”) by and between JANE CROCKER, formerly Jane C.
Jacobs, as Trustee under the Jane C. Jacobs Trust Agreement dated October 5, 1990
(“Crocker”) and NORMAN E. MACKAY (“MacKay”) (Crocker and MacKay
hereinafter collectively referred to as “Landlord”) and TEGAL CORPORATION, a
Delaware corporation (“Tenant”). </FONT></P>

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<A NAME=A002></A>
<H1 ALIGN=CENTER><u><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Recitals </FONT>
</u></H1>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        <B>A.</B> Justin M. Jacobs, Jr. dba Landbank Investments (“Landbank”) and Tenant
          have entered into that certain Lease Agreement dated as of August 15, 1986
          (“Original Lease”) wherein Landbank leased to Tenant and Tenant leased
          from Landbank the premises consisting of an approximately 120,000 square foot
          building (“Building”), the parking lot and other improvements located
          at 2201 South McDowell Boulevard, Petaluma, Sonoma County, California
          (“Original Premises”), as more specifically described in the Original
          Lease. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        <B>B.</B>
          The Original Lease was amended by South McDowell Investments, a California
          general partnership, as successor-in interest to Landbank, (“SMI”) and
          Tenant pursuant to the following documents: (i) Amendment dated as of August 31,
          1987; (ii) letter agreement dated as of September 11, 1987; (iii) Amendment
          dated as of December 17, 1987; (iv) letter agreement dated January 15, 1988; (v)
          Amendment dated as of March 8, 1988; and (vi) Lease Amendment dated March 10,
          1997 (“Sixth Amendment”). The foregoing documents are collectively
          referred to as the “Amendments”. The Amendments and the Original Lease
          are collectively referred to as the “Lease.” </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        <B>C. </B>SMI has assigned its right, title and interest in the Lease to Landlord. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        <B>D. </B>Landlord and Tenant wish to further amend the Lease. </FONT></P>

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<A NAME=A003></A>
<H1 ALIGN=CENTER><u><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Agreement. </FONT>
</u></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        <B>NOW,
THEREFORE</B>, for good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, Landlord and Tenant hereby agree as follows: </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        <B>1.</B>    
          <B><U>Recitals</U></B><U></U>. Landlord and Tenant hereby agree that the
          hereinabove Recitals are true and correct. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        <B>2.</B>    
          <B><U>Definitions</U></B><U></U>. Unless defined otherwise in this Amendment,
          all definitions used in this Amendment shall have the same meaning and
          definition as given them in the Original Lease as amended by the Amendments. </FONT></P>

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

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        <B>3.</B>    
          <B><U>Tenant’s Share</U>.</B> As used in this Amendment,
          “Tenant’s Share” shall mean 37.55%. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        <B>4.</B>    
          <B><U>Premises</U>.</B> The definition of “Premises” in Section 1 of
          the Original Lease shall be deleted. From and after January 1, 2003, the
          Premises shall consist of approximately 45,064 square feet of space on the
          ground floor of the Building and the Chiller Area, as shown on <U>Exhibit A</U>,
          which is attached hereto and made a part hereof by this reference
          (“Premises”). Tenant shall surrender to Landlord all of the Original
          Premises other than the Premises shown on <U>Exhibit A</U> as set forth in
          Section 9 below. Tenant shall have the non-exclusive right in common with the
          other tenants of the Building, Landlord and any other person granted use by
          Landlord to use the Common Areas. The term “Common Areas” shall mean
          (i) all areas and facilities outside the Premises and within the exterior
          boundary line of the Project Site that are provided and designated by Landlord
          for the non-exclusive use of Landlord, Tenant and other tenants of the Building
          and their respective employees, guests and invitees which are improved as
          parking areas, landscaped areas, driveways, roadways and/or walkways and (ii)
          the lobby of the Building, common corridors, hallways, stairwells, elevator, and
          restrooms not located within space leased to other tenants. Landlord shall have
          the right, at any time and from time to time: (i) to designate or improve any
          portion of the Project Site as Common Areas and (ii) to make changes to the
          Common Areas. Any use of the Common Area shall be subject to such rules and
          regulations as Landlord may from time to time or at any time promulgate. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        <B>5.</B>    
          <B><U>Term</U>.</B> Section 1 of the Sixth Amendment is hereby modified to
          extend the end of the Term to December 31, 2009. Section 9 of the Sixth
          Amendment, Option to Extend, is hereby deleted. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        <B>6.</B>    
          <B><U>Basic Rent</U>.</B> Effective January 1, 2003 the Basic Rent shall be as
          follows: </FONT></P>


                                                              <font size="2"> </font><TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=60% ALIGN=LEFT><font size="2">                 <u>Period </u>
     </font></TD>
     <TD WIDTH=4% ALIGN=LEFT> </TD>
     <TD WIDTH=16% ALIGN=center><font size="2">Monthly<br>
     <u>Basic Rent  </u></font></TD>
        <TD WIDTH=2% ALIGN=center> </TD>
     <TD WIDTH=16% ALIGN=center><font size="2">Annual <br>
     <u>Basic Rent</u></font></TD>
        <TD WIDTH=2% ALIGN=LEFT> </TD></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=60% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>January 1, 2003 through December 31, 2003</FONT></TD>
     <TD WIDTH=4% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
     <TD WIDTH=16% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$55,000.00</FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
     <TD WIDTH=16% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$660,000.00</FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>January 1, 2004 through December 31, 2004</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$56,650.00</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$679,800.00</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>January 1, 2005 through December 31, 2005</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$58,349.50</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$700,194.00</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>January 1, 2006 through December 31, 2006</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$60,099.99</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$721,199.88</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>January 1, 2007 through December 31, 2007</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$61,902.99</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$742,835.88</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>January 1, 2008 through December 31, 2008</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$63,760.08</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$765,120.96</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>January 1, 2009 through December 31, 2009</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$65,672.88</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$788,074.56</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD></TR>
</TABLE>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        Section
2 of the Sixth Amendment is hereby deleted. There shall be no annual CPI adjustments in
the Monthly Basic Rent set forth above. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        <B>7.</B>    
          <B><U>Maintenance and Repair of the Building and the Common
          Areas</U></B><U></U>. Tenant shall continue to maintain the Original Premises
          (including the entire Building and Common Areas) in the manner described in
          Section 9.B. of the Original Lease until April 1, 2003. Effective April 1, 2003,
          Tenant shall only be required to maintain and</FONT></P>

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

     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2> repair the Premises (defined in
          Exhibit A) and shall at all times at Tenant’s sole cost and expense keep
          all portions of the Premises in good order, condition and repair (including
          replacements, as and when necessary), including, without limitation, all drop
          ceilings, carpets, walls, moldings, doors, door jams, door closers, door
          hardware, fixtures, equipment and appurtenances thereof, floors, partitions, all
          electrical, lighting and sprinkler systems, and fixtures and equipment. Tenant
          shall also be responsible for the repair of any and all damage caused to the
          Building or the Common Areas by any act, neglect or omission of Tenant or its
          employees, agents, invitees, licensees, contractors or subtenants; the repair of
          any such damage shall be made by Tenant at Tenant’s cost and expense and in
          conformance with existing Building standards of quality and materials.
          Commencing on April 1, 2003 Landlord shall maintain the Common Areas and the
          Building other than the Premises, except for the heating, ventilation and air
          conditioning system (“HVAC System”) which shall be maintained by
          Tenant as set forth in Section 9 below. Landlord may at any time delegate such
          maintenance, or any portion thereof, to any other third party, affiliated or
          non-affiliated, upon such terms and conditions as Landlord deems compensatory,
          necessary or appropriate. The manner in which the Common Areas and the Building
          are maintained hereunder, and the expenditures therefor, shall be at
          Landlord’s sole discretion. In the event that Tenant’s proportionate
          share of any non-emergency single repair item exceeds $5,000.00, Landlord shall
          give Tenant written notice of Landlord’s intent to make such repair no less
          than ten (10) days in advance of such repair. Maintenance and repair of the
          structural portions and foundations of the Building and the structural members
          of the roof of the Building, replacement of the parking and driveway areas,
          replacement or repair of the slab, foundation, concrete walls and structural
          fill of the Building and repair or replacement of any material defects in the
          rough plumbing shall be at Landlord’s sole cost and expense; all other
          maintenance and repair (including maintenance and repair of all portions of the
          roof membrane and drains of the Building other than the structural members,
          restriping, resurfacing and resealing of all parking and driveway areas and
          painting of the exterior of the Building) shall be included in Operating Costs
          and paid by Tenant pursuant to Section 8 of this Amendment or, at
          Landlord’s election, paid directly by Tenant to the extent relating to the
          Premises. Landlord shall have no obligation to make any repairs or replacements
          hereunder until the expiration of ten (10) days following written notice from
          Tenant to Landlord of the need therefor. Tenant waives any right now or
          hereafter granted by law to make any repairs under this Section 7 upon
          Landlord’s failure to do so hereunder or otherwise. Landlord shall at
          Landlord’s cost and expense make all alterations, additions and
          improvements required to comply with any and all laws, ordinances, rules,
          regulations and orders applicable to the Premises except as set forth in Section
          8.E. of the Original Lease, which shall continue to be the obligation of Tenant
          as set forth in Section 8.E. of the Original Lease. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        <B>8.</B>    
          <B><U>Operating Costs</U>.</B> </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        A.    
          <U>Definition</U>. “Operating Costs” shall mean the total of all costs
          and expenses paid or incurred by Landlord in connection with the use, operation,
          maintenance, ownership and repair of the Common Areas and the Building. Without
          limiting the generality of the foregoing, Operating Costs include all costs of
          and expenses</FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>for: (i) maintaining, resurfacing, resealing, remarking,
          painting or restriping the parking areas on the Project Site;
          (ii) maintenance and repair of sidewalks, curbs, paving, walkways,
          landscaping (including tree trimming), planting and irrigation systems
          (including replacement of landscaping and plants required to replace dead or
          dying plants), trash facilities, lighting, drainage and common utility
          facilities, directional or other signs, markers and bumpers and driveway areas
          on the Project Site; (iii) all charges, wages, salaries, benefits and
          payroll burden fees of all parties (including affiliates of Landlord) providing
          services for the maintenance, repair, management and/or supervision of the
          Project Site, and for security personnel retained by Landlord in connection with
          the operation and maintenance of the Common Areas and the Building (although
          Landlord shall not be required to obtain security services);
          (iv) maintenance and repair of security systems and alarms;
          (v) depreciation or amortization (or in lieu thereof, rental payments) on
          all tools, equipment and machinery used in the operation and maintenance of the
          Common Areas and the Building; (vi) premiums for the insurance carried by
          Landlord pursuant to Section 13 below and for Comprehensive General Liability
          Insurance or Commercial General Liability Insurance, casualty insurance, workers
          compensation insurance or other insurance for the Common Areas, the Building and
          for the Project Site, or any portion thereof or interest therein;
          (vii) real property taxes and all personal property taxes and assessments
          levied or assessed on Project Site (but only for personal property used or
          contained in the Common Areas), or any portion thereof or interest therein;
          (viii) cleaning, collection, storage and removal of trash, rubbish, dirt
          and debris, and sweeping and cleaning the Common Areas; (ix) servicing and
          maintaining and monitoring any fire sprinkler system; (x) regular pickup of
          trash and garbage; (xi) a management fee for the internal administration and
          overhead costs incurred in the operation and management of the Common Areas
          hereunder, but only to the extent such management fee is paid to an unaffiliated
          third-party and is at prevailing commercial rates for such fees; (xii)
          maintenance and repair of all portions of the roof of the Building other than
          structural members of the roof; (xiii) the fee for the roof and parking lot
          drainage permits required by law; (xiv) cost of janitorial supplies and
          services; (xv) utility costs for Common Areas including, but not limited to,
          Common Area HVAC and PG&E costs; (xvi) the Oakmead Northbay Business Park
          Association assessment; (xvii) costs of exterior Building painting and painting
          of interior Building Common Areas except for repainting of the exterior of the
          Building more than one time in any five (5) year period; and (xviii) any
          alterations, additions or improvements required to be made to the Common Area in
          order to comply with applicable laws, ordinances, rules, regulations and orders. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        B.    
          <U>Payment by Tenant of Tenant’s Share of Operating Costs</U>.
     Commencing on April 1, 2003 and continuing thereafter throughout the Term,
     Tenant shall pay to Landlord in the manner hereinafter provided, Tenant’s
     Share of Operating Costs. On the first day of each month, Tenant shall pay
     in advance one-twelfth (1/12th) of the amount which Landlord estimates,
     based upon a detailed budget to be given to Tenant in advance, as the
     Tenant’s Share of Operating Costs for the calendar Year. Within ninety (90)
     days after the end of each calendar year of the Term, or as soon thereafter
     as practicable, Landlord shall furnish to Tenant a statement of the actual
     amount of Tenant’s Share of Operating Costs. If the amount paid by Tenant
     during such calendar year is less than Tenant’s Share of Operating Costs as
     shown by Landlord’s </FONT></P>

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

     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>statement, then Tenant
     shall pay the difference within twenty (20) days after the date of
     Landlord’s statement; if the amount paid by Tenant during such calendar
     year is more than Tenant’s Share of Operating Costs as shown by such
     statement, then Tenant shall receive a credit on future payments of
     Operating Costs hereunder for the amount of such excess. If at any time it
     appears to Landlord that Operating Costs for any calendar year will exceed
     Landlord’s estimate thereof, then Landlord shall have the right by written
     notice to Tenant to revise the estimated monthly amount payable by Tenant
     hereunder and subsequent payments of Tenant’s estimated Share of Operating
     Costs hereunder shall be increased based upon such revised statement;
     provided, however, there shall be no more than one revision during each
     calendar year, except for the 2003 calendar year, where there may be two
     (2) revisions. For the years in which the Term commences and expires,
     Operating Costs shall be prorated based on the number of days of the
     calendar year the Term is in effect. Tenant shall have the right to audit,
     at Tenant’s cost and expense, not more than once each calendar year, the
     books and records of Landlord and/or its representatives relating to the
     Operating Costs. Such audit shall be at the offices of Landlord’s
     accountant or at such other location as designated by Landlord. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        C.
          <U>Capital Improvements.</U> If any of Tenant’s obligations under Articles
          7 and 8 of the Lease, as hereby amended, would require Tenant to pay all or any
          portion of any charge or Common Operating Expense which could be treated as a
          capital improvement under generally accepted accounting principles, then Tenant
          shall pay its share of such expense, as follows: </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>            8.C.1. The
     cost of such improvement shall be amortized over the useful life of the
     improvement as reasonably determined by Landlord with interest on the
     unamortized balance at the then prevailing mark rate Landlord would pay if
     it borrowed funds to construct such improvements from an institutional
     lender, and Landlord shall inform Tenant of the monthly amortization
     payment required to so amortize such costs, and shall also provide Tenant
     with the information upon which such determination is made. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>            8.C.2. Tenant shall pay its proportionate share (based on the percentage of the
          Building leased by Tenant) of such amortization payment for each month after
          such improvement is completed until the first to occur of (i) the expiration of
          the Lease Term or (ii) the end of the term over which such costs were amortized,
          which amount shall be due at the same time the Base Monthly Rent is due. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        <B>9.</B> 
          <B><U>HVAC</U></B><U></U>. Subject to Landlord’s reducting of Tenant’s
          HVAC units to the Premises, at Landlord’s sole expense, Tenant shall
          maintain and repair the HVAC System serving the Premises by procuring and
          maintaining an all-inclusive contract in customary form and substance
          (“HVAC Maintenance Contract”) with a contractor specializing and
          experienced in the maintenance and repair of HVAC equipment (“HVAC
          Contractor), which HVAC Contractor and maintenance schedule shall be approved by
          Landlord. Tenant shall at Tenant’s cost and expense replace the HVAC System
          if needed during the Term of the Lease. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>       <B>10.</B>    
          <B><U>Surrender of Portions of Original Premises</U></B><U></U>. Tenant shall
          surrender all portions of the Original Premises which are not a part of the
          Premises (“Surrender Premises”) to Landlord no later than the date
          which is sixty (60) days following the date this Amendment is executed by the
          parties (“Surrender Date”). The Surrender Premises shall be delivered
          to Landlord in good condition and repair with all interior walls patched and
          cleaned so that they appear freshly painted, all tile floors cleaned and waxed,
          all carpets cleaned and shampooed, and all broken, marred, stained or
          nonconforming acoustical ceiling tiles replaced and as required by the
          provisions of Section 7 of the Original Lease and Section 4 of the Sixth
          Amendment, except as otherwise provided in this Section 9. In addition the
          following shall be completed by Tenant at Tenant’s expense on or before the
          Surrender Date: </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>                A. all kitchen equipment and fixtures shall be removed from the kitchen area of the
          Surrender Premises with walls, doors and ceilings patched, floors and carpets
          cleaned, all damage caused by such removal repaired, a drop ceiling installed
          where the cooking area hood was located and the wall in the cafeteria between
          the service area and seating area removed; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>                B. all specialized equipment and telecommunication connections shall be removed
          from the second floor computer room area of the Surrender Premises, the raised
          portion of the flooring and wiring removed (such removal of the raised portion
          and wiring to be completed at a time to be designated by Landlord) and the floor
          restored to existing building standards; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>                C. the existing 175 gallon water heater in kitchen area shall be enclosed with
          sheet rock and an access door added; and </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>                D. phone wires from the portion of the Original Premises previously occupied by ACTI shall be removed (such removal to be completed at a time designated by
          Landlord). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        Notwithstanding
any provisions of Section 7 of the Lease and any other provisions therein to the contrary,
within thirty (30) days following the full execution of this Amendment by the parties,
Tenant shall deliver to Landlord a completed bill of sale (“Bill of Sale”) in
the form attached hereto as <U>Exhibit B</U> and made a part hereof by this reference,
listing on said Bill of Sale all furniture, cubicles and equipment and all telephone
systems and connections and power connections going to work stations, offices and cubicles
which Tenant will leave in the Surrender Premises and which shall become the property of
Landlord (“Surrendered Personal Property”). Such Bill of Sale shall reflect that
no monetary consideration was paid for the sale. Tenant hereby represents and warrants to
Landlord that the Surrendered Personal Property is owned by Tenant and will not on the
date this Amendment is executed by the parties be encumbered by any claim or lien, such as
a Uniform Commercial Code Financing Statement. The transfer of such Surrendered Personal
Property to Landlord is made in partial consideration for the execution of this Amendment
and Tenant shall not be entitled to a credit against amounts owed to Tenant by Landlord of
any amount for such transfer. </FONT></P>

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

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        With
respect to the Surrender Premises, once such Surrender Premises are surrendered to
Landlord in the condition required by this Section 10 and accepted by Landlord, Tenant
shall have no further obligations under Section 7 of the Original Lease and Section 4 of
the Sixth Amendment. Upon the expiration or sooner termination of this Lease, Tenant shall
comply with the provisions of Section 7 of the Original Lease and Section 4 of the Sixth
Amendment with regard to the surrender of the Premises to Landlord. Within one hundred
eighty (180) days after the date on which this Amendment is executed by the parties,
Landlord shall provide Tenant with a list of the existing improvements which Tenant will
be required to remove at the end of the term of the Lease. Landlord’s failure to
provide such list to Tenant within said one hundred eighty (180) days shall be deemed a
waiver of Landlord’s right to require Tenant to remove such improvements at the end
of the term of the Lease. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        <B>11.</B> 
          <B><U>Deferred Maintenance</U></B><U></U>. Tenant acknowledges and agrees that
          Tenant shall remain responsible for the payment of maintenance and repairs which
          Tenant was required by the terms of the Original Lease to complete on the
          Original Premises prior to April 1, 2003, but which Tenant did not complete
          (“Deferred Maintenance”). Tenant shall have ninety (90) days after the
          date on which this Amendment is executed by the parties in which to complete the
          following Deferred Maintenance items: (1) replace the five (5) metal signs at
          the two (2) driveway entrances; (2) trim the trees described on the tree
          trimming plan, which is attached hereto as <U>Exhibit C</U> and made a part
          hereof by this reference; (3) repair the gate to the patio area so that the gate
          will close and latch; (4) resurface and reseal the cracks in the driveways and
          parking areas of the Project Site; (5) restore the wall in the main lobby where
          a pay telephone was removed; and (6) complete actions as necessary to put all
          plumbing in all restrooms in good condition and repair. Landlord shall complete
          the other Deferred Maintenance consisting of patching the roof membrane,
          cleaning the roof drains and replacing all wooden surfaces of the four exterior
          wooden benches and shall submit an invoice to Tenant for the cost of same.
          Tenant shall within ten (10) days of receipt of any such invoice pay to Landlord
          as additional rent the amount of any such invoice. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        <B>12.</B>
          <B><U>Improvements</U></B><U></U>. In conjunction with the separation of the
          Premises from the Original Premises Tenant shall at Tenant’s cost and
          expense make the following improvements to the Building (“Building
          Improvements”): </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>                A. construct an approximately 45-foot straight wall with one door to separate the
          office spaces at the second set of pillars as shown on <U>Exhibit D</U> (page 1)
          which is attached hereto and made a part hereof by this reference; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>                B. install a doorway to allow access to the restroom hallway from the production
          area in the Premises and from the office areas in the Surrender Premises in the
          location shown on <U>Exhibit D</U> (page 1); </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>                C. install a doorway for emergency exit at the end of the hallway adjacent to the
          reliability lab and production area in the Surrender Premises in the location
          shown on <U>Exhibit D</U> and also install an additional wall to the production
          area; </FONT></P>

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

<!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>                D. remove wall and stub above-ceiling electrical and water lines in the chase area
          adjacent to the training rooms in the location shown on <U>Exhibit D</U> and
          restore the floor; and </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>                E. construct a wall with three (3) or four (4) doors in the location shown on page
          2 of <U>Exhibit D</U>. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        All
such Building Improvements shall be completed by Tenant in conformance with current
building standards and applicable building codes. The Building Improvement described in
Section 12.A. above shall be completed no later than the date which is sixty (60) days
following the date this Amendment is executed by the parties. The Building Improvements
described in Section 12.B., C. and D. shall be completed no later than the date which is
sixty (60) days following the date this Amendment is executed by the parties. The Building
Improvement described in Section 12.E. shall be completed within thirty (30) days after
Landlord requests in writing that such Building Improvement be made. At the time of such
written request, Landlord shall specify whether three or four doors will be required. If
any of the Building Improvements are not completed by Tenant by the date required,
Landlord may at its election complete such Building Improvements. Tenant shall within ten
(10) days of receipt of an invoice from Landlord following completion of any such work,
pay to Landlord as additional rent the amount of any such invoices plus an administration
fee of ten percent (10%) of the amount thereof. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        <B>13.</B>
          <B><U>Real Property Taxes</U></B><U></U>. Effective April 1, 2003, Tenant shall
          pay only Tenant’s Share of the Real Property Taxes. On the first day of
          each month, Tenant shall pay to Landlord as additional rent one-twelfth (1/12th)
          of the amount which Landlord estimates as Tenant’s Share of Real Property
          Taxes for the calendar year. Landlord acknowledges that Tenant has paid the
          first installment of the Real Property Taxes due for the Original Premise, which
          installment was for taxes through December 31, 2002. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        <B>14.</B>
          <B><U>Insurance</U></B><U></U>. Upon the execution of this Amendment by the
          parties, Tenant shall have no obligation to maintain and carry the insurance
          described in Sections 12.D., E., and F. of the Original Lease. Tenant shall
          continue to keep in force and maintain commercial general liability insurance as
          set forth in the Original Lease, except that such insurance shall be limited to
          liability arising out of the use, occupancy or maintenance of the Premises
          rather than the Original Premises. Landlord shall, commencing on the date this
          Amendment is executed by the parties, keep in force fire, extended coverage and
          “all risk” insurance, and commercial general liability insurance
          covering the Building and the Common Areas. Landlord shall credit Tenant for the
          insurance payment for the insurance described in the first sentence of this
          Section 14 applicable to the period April 1, 2003 through the date that this
          Amendment is executed by the parties less Tenant’s pro-rata share of such
          insurance expense commencing April 1, 2003. Tenant shall, at its sole cost and
          expense, comply with any and all reasonable requirements pertaining to the
          Premises of any insurer necessary for the maintenance of reasonable fire and
          commercial general liability insurance covering the Building and the Common
          Areas. Tenant shall pay, as a part of the Operating Costs, Tenant’s Share
          of the cost of such insurance carried by Landlord. </FONT></P>

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

     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        <B>15.</B>
          <B><U>Subtenants</U></B><U></U>. Tenant represents and warrants to Landlord that
          there are no subleases in effect which affect the Original Premises except for
          (i) a sublease dated July 23, 1991 between Tenant and Holtemann, Ord &
          Smith, Inc. (“USI Sublease”), the term of which has expired and is now
          a month-to-month tenancy, (ii) a sublease dated July 5, 2000 between Tenant
          and Teltronics Inc. (“Teltronics Sublease), the term of which will expire
          on October 31, 2003, and (iii) a sublease dated February 15, 2003 between Tenant
          and SpatiaLight, Inc. (“SpatiaLight Sublease”), the term of which will
          expire on August 14, 2003. The USI Sublease and the Teltronics Sublease are
          hereinafter sometimes collectively referred to as the “Assigned
          Subleases”. Tenant shall concurrently with the execution of this Amendment
          assign to Landlord in writing all of Tenant’s right, title and interest in
          the Assigned Subleases with such assignment to be effective as of January 1,
          2003. A copy of the form of such assignment is attached hereto as <U>Exhibit
          E</U> and made a part hereof by this reference. Tenant shall pay to Landlord
          subject to the reconciliation described in Section 22 below, the total amount of
          any security deposit paid to Tenant by the subtenants under the Assigned
          Subleases and all rent and other charges collected by Tenant under the Assigned
          Subleases for the period from January 1, 2003 until the date this Amendment is
          executed by the parties. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        <B>16.</B>
          <B><U>Sublease and Assignment Consideration</U>.</B> If Landlord consents to any
          assignment or sublease hereunder, then Tenant shall pay to Landlord, immediately
          upon Tenant’s receipt thereof, seventy-five percent (75%) of any and all
          “consideration” (as defined below) received by Tenant on account of
          such transaction, howsoever the same may be denominated or characterized, and in
          the case of a sublease to the extent that such consideration exceeds the pro
          rata portion of the Basic Rent and other charges payable by Tenant hereunder
          attributable to the sublet portion of the Premises, based on the leasable area
          of the Premises and the leasable area of the sublet portion of the Premises
          after deducting therefrom any real estate broker commission incurred by Tenant
          in connection with the sublease or assignment and the cost of any improvements
          made to the space to be subleased as a condition of the sublease. As used
          herein, “consideration” includes any and all consideration received by
          Tenant on account of such assignment or subletting, including, without
          limitation, money, property, assumption of liabilities other than those arising
          under this Lease, discounts, services, credits or any other item or thing of
          value. Irrespective of the form of such consideration, Landlord shall be
          entitled to be paid in cash in an amount equivalent to the aggregate of the cash
          portion of the consideration and the value of any non-cash portion of the
          consideration. In the event that any consideration is paid or given in
          installments, Landlord shall receive each such installment at the time paid or
          given. Notwithstanding the above to the contrary, in the event of the sublease
          by Tenant of “production” space in the Premises, such event shall not
          entitle Landlord to receive excess rent consideration as described hereinabove. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        <B>17.</B>
          <B><U>Signs</U></B><U></U>. Tenant shall within thirty (30) days of receipt of
          written notice from Landlord at Tenant’s cost and expense remove the
          existing Tenant sign which Tenant installed on the Building and repair any
          damage to the Building resulting from such removal of said sign. Upon removal of
          said sign Tenant shall have no further right to have a sign on the Building, but
          may maintain at Tenant’s expense the existing monument sign located on the
          lawn in the Common Areas. </FONT></P>

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

     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        <B>18.</B>
          <B><U>Utilities</U></B><U></U>. Tenant and Landlord acknowledge that the utility
          system serving the Building cannot be separately metered in a cost effective
          manner and therefore agree that Tenant shall continue to provide utilities for
          the entire Building. Tenant shall be reimbursed directly by other tenants in the
          Building for such other tenants’ share of utility costs, at the rate of
          $0.1746 per square foot per month which Landlord and Tenant agree is an
          equitable rate as of the Reference Date. This rate shall be subject to review
          upon the request of either Landlord or Tenant in the event of a substantial
          change in rates charged by any utility company furnishing utilities to the
          Building. The aforementioned rate is based upon the following calculations: </FONT></P>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=63% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Internal Electric:</FONT></TD>
     <TD WIDTH=10% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
     <TD WIDTH=25% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$0.1575</FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Exterior Lighting:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$0.0038</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Gas:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$0.0058</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Water:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$0.0075</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Total:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$0.1746</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD></TR>
</TABLE>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Landlord shall have no obligation to
pay Tenant for any utility costs due from other tenants in the Building or for utility
costs due for space in the Building which is not leased to another Tenant for periods
prior to December 31, 2004, except for Common Areas. After December 31, 2004, Landlord
shall reimburse Tenant for utility costs due for space in the Building which is not leased
to another Tenant (except for Common Areas). Landlord shall pay to Tenant the utility
costs for the Common Areas at the rate set forth above, after deducting therefrom
Tenant’s Share of utility costs for the Common Areas. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        <B>19.</B>
          <B><U>Stock Options</U></B><U></U>. In consideration of the execution of this
          Seventh Amendment, and concurrently with the execution of this Amendment by the
          parties, Tenant shall issue to Landlord a written option (“Option”) in
          form reasonably acceptable to Landlord, which Option shall grant Landlord the
          right to purchase 300,000 shares of Tegal Common Stock at the closing market
          price on the date on which this Amendment is fully executed by the parties. Such
          Option will be vested immediately and must be executed within ten (10) years of
          issue. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        <B>20.</B> <B><U>First Right of Refusal.</U></B><U></U> Section 32 of the Original Lease is
          hereby deleted. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        <B>21.</B> <B><U>Lease Termination</U>.</B> Section 8 of the Sixth Amendment is hereby
          deleted. Tenant shall have no right to terminate the Lease prior to the
          expiration of the Term. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        <B>22.</B> <B><U>Reconciliation</U></B><U></U>. Landlord and Tenant shall cooperate and use
          their best efforts to complete within sixty (60) days from the date this
          Amendment is executed by the parties a reconciliation of amounts owed to
          Landlord by Tenant and credits due to Tenant. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        <B>23.</B> <B><U>Default by Tenant</U></B><U></U>.
     Notwithstanding the provisions of Section 16 of the Original Lease, the
     failure of Tenant to perform or observe any covenant or condition to be
     performed by Tenant under Sections 9, 10, and 17 of this Amendment shall
     constitute </FONT></P>

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

     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>a default hereunder by
     Tenant upon Tenant’s failure to cure such breach within five (5) days after
     written notice from Landlord of Tenant’s failure to perform. In addition to
     any other right or remedy of Landlord hereunder, upon the occurrence of a
     default and without waiving or releasing Tenant from any obligation of
     Tenant hereunder, Landlord may (but shall not be required to) cure such
     default for the account of Tenant. Landlord shall not be responsible or
     liable to Tenant for any loss or damage that may be caused to Tenant’s
     stock or business by reason of effecting cure hereunder. All sums paid by
     Landlord and all costs and expenses incurred by Landlord in connection with
     such cure (including attorneys’ fees), together with interest thereon and
     the maximum rate allowed by law from the respective dates of Landlord’s
     incurrence of each item of cost or expense, shall be payable by Tenant on
     demand. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        <B>24.</B> <B><U>Late Charge</U></B><U></U>. Section 5.C. of the Original Lease is hereby
          deleted and the following is substituted as Section 5.C.: </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
                         “C.        Tenant
     hereby acknowledges that late payment by Tenant to Landlord of Basic Rent,
     Additional Rent and other sums due under this Lease will cause Landlord to
     incur additional costs not contemplated by this Lease, the exact amount of
     which will be extremely difficult or impossible to ascertain. Such
     additional costs include processing and accounting charges and late charges
     which may be imposed upon Landlord by the terms of any mortgage or deed of
     trust covering the Premises. Therefore, if any installment of Basic Rent,
     Additional Rent or any other sum due from Tenant shall not be received by
     Landlord within five (5) days after written notice from Landlord of
     non-receipt, Tenant shall pay to Landlord a late charge equal to six
     percent (6%) of the overdue amount. The parties hereby acknowledge, warrant
     and represent that such late charge represents a fair and reasonable
     estimate of the costs Landlord will incur by reason of late payment by
     Tenant. Acceptance of such late charge by Landlord shall in no event
     constitute a waiver of a Default with respect to such overdue amount or
     prevent Landlord from exercising any or all of the other rights and
     remedies granted under this Lease. Landlord may, as a matter of
     convenience, provide to Tenant from time to time billings or invoices for
     Rent or other sums due under this Lease, but Tenant’s failure to receive
     any such billing or invoice, or Landlord’s omission or cessation of any
     such billing or invoice shall not excuse Tenant’s obligation for timely
     payment in accordance with this Lease.” </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        <B>25.</B> <B><U>Conditions Precedent</U></B><U></U>. Landlord’s obligations under
          this Amendment are conditioned upon: </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>                    A.    
          Approval of this Amendment by Washington Mutual, Landlord’s lender; and </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>                    B.    
          Approval by Landlord of a resolution by Tenant’s Board of Directors
          approving this Amendment and authorizing the signature of this Amendment by the
          Company. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        <B>26.</B> <B><U>Effect</U></B><U></U>. Except as set forth in this Amendment, the Original
          Lease as amended by the Amendments shall remain in full force and effect. </FONT></P>

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

<!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>       <B>27.</B>  <B><U>Additional Rent</U>.</B> For all purposes under this Lease, all sums and
          other amounts payable by Tenant to Landlord or otherwise hereunder which are not
          specifically denominated as “rent” shall be payable as and shall be
          deemed to be additional rent. Such sums and amounts shall be payable as and when
          provided under this Lease, unless no date is specified, in which case such sums
          shall be payable together with each installment of Basic Rent payable hereunder. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        <B>28.</B> <B><U>Confidentiality</U></B><U></U>. Tenant agrees not to disclose any of the
          terms and conditions of this Amendment to any other tenant or prospective tenant
          of Landlord in the Building, nor to any real estate brokers. Landlord
          acknowledges that Tenant has disclosed the terms of this Amendment to Equis
          Corporation, a consultant retained by Tenant. Tenant agrees to give Equis
          Corporation written notice requesting that Equis Corporation keep all such terms
          confidential. Tenant acknowledges that a disclosure in violation of this Section
          28 could impair Landlord’s ability to lease space in the Building at fair
          market rental values. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        <B>29.</B> <B><U>Lease Buy-Out/Termination.</U> </B>Tenant may elect to terminate this
          Lease (“Right to Terminate”), as amended, upon the following terms and
          conditions: </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>                A. <U>Notice</U>. Tenant must give Landlord prior notice in writing of its election
          to so terminate no earlier than one hundred eighty (180) days before the
          termination date elected by Tenant (“<U>Termination Date</U>”). </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>                B. <U>No Default</U>. Tenant may not exercise said Right to Terminate the Lease and
          said election shall be void if Tenant is in default of a material provision of
          this Lease, as amended, as of the date of the purported exercise of this Right
          to Terminate or thereafter at the Termination Date. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>                C. <U>Termination Fee</U>. If Tenant so elects to terminate this Lease, then Tenant
          shall pay to Landlord on the Termination Date as consideration for
          Landlord’s agreement to allow Tenant to terminate this Lease the sum of Two
          Million Dollars ($2,000,000.00). Landlord agrees that such amount shall
          adequately compensate Landlord for all detriment proximately caused by such
          termination or which in the ordinary course of things would be likely to result
          therefrom, including, without limitation, the following: (1) expenses for
          altering, remodeling or otherwise improving the Premises for the purpose of
          reletting, including installation of leasehold improvements; (ii) broker’s
          fees, advertising costs and other expenses of reletting the premises; (iii)
          costs of carrying the Premises after such early termination, such as taxes,
          insurance premiums, mortgage payments, utilities, and security precautions; (iv)
          free rent, moving costs and any other monetary inducement and expense, necessary
          to lease the Premises; and (v) costs of alterations or improvements required to
          comply with law, except for any costs of compliance, remediation or removal of
          Hazardous Materials from the Premises as set forth in Section 10 of the Original
          Lease. Tenant shall continue to remain responsible for the clean up and removal
          of Hazardous Materials as set forth in Section 10 of the Original Lease and,
          subject to this Section 10, to remove whatever Leasehold Improvements Tenant,
          itself, may have installed during the Term (as extended), including the cost of
          removal of those Special Operating Systems set forth on <U>Exhibit M</U> to the
          Lease. </FONT></P>

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

<!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>               D. <U>Surrende</U>r. If Tenant so elects to terminate this Lease, then Tenant shall
          surrender possession of the Premises to Landlord pursuant to the provisions of
          this Lease, as amended. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>                E. <U>Release</U>. Upon such termination in accordance with the provisions of this
          Section 29, Landlord and Tenant shall fully and unconditionally release and
          discharge each other from their respective obligations arising under this Lease
          from and after the date of such early termination. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        <B>30.</B>
          <B><U>Counterparts</U></B><U></U>. This Amendment may be executed in two or more
          counterparts, each of which shall be deemed an original, but all of which shall
          constitute one and the same instrument. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        <B>31.</B> <B><U>Exhibits</U></B><U></U>. The following Exhibits are a part of this
          Amendment: </FONT></P>

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<A NAME=A004></A>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" id="AutoNumber1">
  <tr>
    <td width="19%"> </td>
    <td width="81%"> </td>
  </tr>
  <tr>
    <td width="19%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>     </I> <I>     </I> Exhibit
    A</FONT></td>
    <td width="81%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Premises</FONT></td>
  </tr>
  <tr>
    <td width="19%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>     </I>       Exhibit
    B</FONT></td>
    <td width="81%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Surrendered Personal Property</FONT></td>
  </tr>
  <tr>
    <td width="19%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>     </I> <I>     </I> Exhibit
    C</FONT></td>
    <td width="81%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Tree Trimming Plan</FONT></td>
  </tr>
  <tr>
    <td width="19%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>     </I> <I>     </I> Exhibit
    D</FONT></td>
    <td width="81%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Building Improvements</FONT></td>
  </tr>
  <tr>
    <td width="19%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>     </I> <I>     </I> Exhibit
    E</FONT></td>
    <td width="81%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Assignment
    of Subleases </FONT></td>
  </tr>
</table>
<i>

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

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</i>
<A NAME=A005></A>
<P ALIGN=LEFT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        <B>IN
WITNESS WHEREOF</B>, Landlord and Tenant have executed this Amendment to be effective as
of January 1, 2003. </FONT></P>

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<A NAME=A006></A>
<H1 ALIGN=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>LANDLORD: </FONT></H1>

<p ALIGN=center> </p>

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    <td width="50%"> </td>
    <td width="50%"> </td>
  </tr>
  <tr>
    <td width="50%"><font size="2">Date of Execution: 6/05/03</font></td>
    <td width="50%"><u><font size="2">/s/ Jane
    Crocker                                                        </font></u></td>
  </tr>
  <tr>
    <td width="50%"> </td>
    <td width="50%"><font size="2">JANE CROCKER, as Trustee under the <br>
    Jane C. Jacobs Trust
<!-- MARKER FORMAT-SHEET="Head Sub 2 Left" FSL="Default" -->
    </font><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Agreement dated <br>
    October 5, 1990 </FONT></td>
  </tr>
  <tr>
    <td width="50%">   </td>
    <td width="50%"> </td>
  </tr>
  <tr>
    <td width="50%"><font size="2">Date of Execution: 6/05/03</font></td>
    <td width="50%"><u><font size="2">/s/ Norman E. MacKay                                             
    </font></u></td>
  </tr>
  <tr>
    <td width="50%"> </td>
    <td width="50%"><font size="2">NORMAN E. MACKAY</font></td>
  </tr>
  <tr>
    <td width="50%">    </td>
    <td width="50%"> </td>
  </tr>
  <tr>
    <td width="50%"> </td>
    <td width="50%"><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TENANT: </FONT>
    </b></td>
  </tr>
  <tr>
    <td width="50%">     </td>
    <td width="50%"> </td>
  </tr>
  <tr>
    <td width="50%"> </td>
    <td width="50%">
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TEGAL
CORPORATION, <br>
a Delaware corporation </FONT></P>

    </td>
  </tr>
  <tr>
    <td width="50%">   </td>
    <td width="50%"> </td>
  </tr>
  <tr>
    <td width="50%"><font size="2">Date of Execution: 6/9/03</font></td>
    <td width="50%"><font size="2">By: <u>/s/ Michael L. Parodi                                           </u></font></td>
  </tr>
  <tr>
    <td width="50%"> </td>
    <td width="50%"><font size="2"><br>
    Its: <u>President & CEO                                                  </u></font></td>
  </tr>
  <tr>
    <td width="50%"><font size="2">   </font></td>
    <td width="50%"> </td>
  </tr>
  <tr>
    <td width="50%"><font size="2">Date of Execution: ________________</font></td>
    <td width="50%"><font size="2">By:<u>                                                                         
    </u></font></td>
  </tr>
  <tr>
    <td width="50%"> </td>
    <td width="50%"><font size="2"><br>
    Its:________________________________</font></td>
  </tr>
  <tr>
    <td width="50%"> </td>
    <td width="50%"> </td>
  </tr>
</table>
<i>

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

</i>

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<A NAME=A013><font size="2"></font></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>EXHIBIT B<br>
SURRENDERED PERSONAL PROPERTY <br>
BILL OF SALE </FONT></H1>

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<A NAME=A015><font size="2"></font></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>BILL OF SALE </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        TEGAL
CORPORATION, a Delaware corporation, for good and valuable consideration, hereby sells,
assigns, transfers and quitclaims to JANE CROCKER, Trustee under the Jane C. Jacobs Trust
Agreement dated October 5, 1990 and NORMAN E. MACKAY all of Tegal Corporation’s
right, title and interest in and to the furniture, equipment and other personal property
(the “Personal Property” currently situated in the 74,936 square feet of space
located at 2201 South McDowell Blvd., Petaluma, California, and hereinafter described,
free and clear of all liens and encumbrances and otherwise in “AS IS” physical
condition: </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>    A.       
          Office cubicles: </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>    B.       
          Office and conference chairs: </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>    C.       
          Conference tables: </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>    D.       
          Whiteboards: </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>    E.       
          Desks and tables: </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>    F.       
          Bookshelves: </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>    G.       
          Small storage racks (6 feet): </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>    H.       
          Mid-size storage racks (9 feet): </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>    I.       
          Large storage racks: </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>    J.       
          Rolling racks: </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>    K.       
          File cabinets: </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>    L.       
          Glass display cases: </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>    M.       
          Work benches: </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>    N.       
          AT&T phone system, related equipment, phones and wiring </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>    O.       
          Security system for the Building and all related equipment </FONT></P>

<i>

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

</i>
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>    P.       
          Baler (cardboard) </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>    Q.       
          <B><I>Intentionally omitted</I></B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>    R.       
          All other personal property remaining in the Premises after ____________, 2003. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        No
monetary consideration was paid for this Bill of Sale. This Bill of Sale is made in
partial consideration for the execution and delivery of that certain Seventh Amendment to
Lease Agreement by and between Tegal Corporation and Jane Crocker, Trustee under the Jane
C. Jacobs Trust Agreement dated October 5, 1990 and Norman E. MacKay. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Executed this _____ day of
___________, 2003. </FONT></P>

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<A NAME=A016></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>                                                                                    TEGAL
CORPORATION <br>
                                                                                    a
Delaware corporation </FONT><i></P>

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</i>
<A NAME=A018></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>                                                                                   
By: ________________________ </FONT><i></P>

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</i>
<A NAME=A019></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>                                                                                   
Title: _______________________ </FONT></P>


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<i>

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</i>



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<A NAME=A020></A>

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<A NAME=A021></A>
<H1 ALIGN=CENTER><u><FONT FACE="Times New Roman, Times, Serif" SIZE=2>EXHIBIT E </FONT></H1>

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<A NAME=A022><font size="2"></font></A>
</u>
<H1 ALIGN=CENTER><u><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ASSIGNMENT OF SUBLEASES </FONT>
</u></H1>

<!-- MARKER FORMAT-SHEET="Para Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        FOR
VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, as of the Effective Date
(hereinafter defined), TEGAL CORPORATION, a Delaware corporation (“Assignor”),
assigns, transfers and conveys to JANE CROCKER, Trustee under the Jane C. Jacobs Trust
Agreement dated October 5, 1990 and NORMAN E. MACKAY (“Assignee”), all of
Assignor’s right, title and interest as Sublandlord/Sublessor under the subleases,
copies of which are attached hereto and incorporated herein by this reference (the
“Subleases”). Assignor represents and warrants to Assignee that the copies of
the Subleases attached hereto are true, current and complete copies of all such Subleases
and that there are no amendments or modifications to such Subleases except for the
amendments and modifications attached hereto. Also attached hereto is a rent roll and
Assignor represents and warrants to Assignee that (i) the attached rent roll is true,
correct and complete; (ii) none of the subtenants is in default under the Subleases except
as set forth on the attached rent roll; (iii) Assignor is not in default of any of
Assignor’s obligations under any of the Subleases; and (iv) Assignor holds as
security deposits under the Subleases only the amounts listed on the rent roll. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        As
of the Effective Date, Assignee assumes and agrees to keep, perform, and fulfill all
obligations as Sublandlord/Sublessor under the Subleases required to be kept, performed
and fulfilled by Assignor thereunder. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        Assignor
agrees to indemnify, hold harmless and defend Assignee from and against any and all
liabilities, losses, costs, causes of action, claims, damages, and expenses (including
reasonable attorneys’ fees and costs) relating to obligations of
Sublandlord/Sublessor under the Subleases arising, accruing or incurred prior to the
Effective Date. The defense of Assignee as required by the immediately preceding sentence
shall be with counsel reasonably satisfactory to Assignee. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        Assignee
agrees to indemnify, hold harmless and defend Assignor from and against any and all
liabilities, losses, costs, causes of action, claims, damages, and expenses (including
reasonable attorneys’ fees and costs) relating to obligations of
Sublandlord/Sublessor under the Subleases arising, accruing or incurred on or after the
Effective Date. The defense of Assignor as required by the immediately preceding sentence
shall be with counsel reasonably satisfactory to Assignor. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        The
provisions of this Assignment of Subleases shall be binding upon and inure to the benefit
of Assignor and Assignee and their respective successors and assigns. </FONT></P>

<i>

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

</i>
<P> </P>

<!-- MARKER FORMAT-SHEET="Para Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        This
Assignment of Subleases may be executed in counterparts, each of which shall be deemed to
be an original, but such counterparts when taken together shall constitute but one
assignment. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        If
either party institutes an action or proceeding to enforce its rights under this
Assignment of Subleases or to interpret any provision of this Assignment of Subleases, the
losing party shall pay to the prevailing party the attorneys’ fees and costs incurred
by the prevailing party in such action or proceeding. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        IN
WITNESS WHEREOF, the undersigned have executed the within instrument to be effective as of
January 1, 2003 (“Effective Date”). </FONT></P>

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    <td width="50%"> </td>
    <td width="50%"><b><font size="2">ASSIGNOR:</font></b></td>
  </tr>
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    <td width="50%"> </td>
    <td width="50%"> </td>
  </tr>
  <tr>
    <td width="50%"> </td>
    <td width="50%"><font size="2">TEGAL CORPORATION,</font></td>
  </tr>
  <tr>
    <td width="50%"> </td>
    <td width="50%"><font size="2">a Delaware corporation</font></td>
  </tr>
  <tr>
    <td width="50%"> </td>
    <td width="50%"> </td>
  </tr>
  <tr>
    <td width="50%"><font size="2">Date of Execution: 6/9/03</font></td>
    <td width="50%"><font size="2">By: </font><u><font size="2">/s/ Michael L.
    Parodi                     </font></u></td>
  </tr>
  <tr>
    <td width="50%"> </td>
    <td width="50%"><font size="2">Its: </font><u><font size="2">President &
    CEO                          _</font></u></td>
  </tr>
  <tr>
    <td width="50%">   </td>
    <td width="50%"> </td>
  </tr>
  <tr>
    <td width="50%"><font size="2">Date of Execution: ________________</font></td>
    <td width="50%"><font size="2">By: ________________________________</font></td>
  </tr>
  <tr>
    <td width="50%"> </td>
    <td width="50%"><font size="2"><br>
    Its: ________________________________</font></td>
  </tr>
  <tr>
    <td width="50%">    </td>
    <td width="50%"> </td>
  </tr>
  <tr>
    <td width="50%"> </td>
    <td width="50%"><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
    ASSIGNEE: </FONT></b></td>
  </tr>
  <tr>
    <td width="50%">   </td>
    <td width="50%"> </td>
  </tr>
  <tr>
    <td width="50%"><font size="2">Date of Execution: 5/29/03</font></td>
    <td width="50%"><font size="2">By: <u>/s/ Jane
    Crocker                                                   </u></font></td>
  </tr>
  <tr>
    <td width="50%"> </td>
    <td width="50%"><font size="2">JANE CROCKER, as Trustee under the <br>
    Jane C. Jacobs Trust
<!-- MARKER FORMAT-SHEET="Head Sub 2 Left" FSL="Default" -->
    </font><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Agreement dated <br>
    October 5, 1990 </FONT></td>
  </tr>
  <tr>
    <td width="50%"><font size="2">   </font></td>
    <td width="50%"> </td>
  </tr>
  <tr>
    <td width="50%"><font size="2">Date of Execution: 5/29/03</font></td>
    <td width="50%"><font size="2">By: <u>/s/ Norman E.
    MacKay                                      </u></font></td>
  </tr>
  <tr>
    <td width="50%"> </td>
    <td width="50%"><font size="2">NORMAN E. MACKAY</font></td>
  </tr>
  <tr>
    <td width="50%"> </td>
    <td width="50%"> </td>
  </tr>
</table>

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<A NAME=A023></A>