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                                                                    EXHIBIT 10.1

                                                                  March 28, 2000

Acqua Wellington North American Equities Fund Limited
c/o MeesPierson Fund Services (Bahamas) Ltd.
Montague Sterling Centre
East Bay Street, P.O. Box SS-6238
Nassau, Bahamas


Dear Sirs:

        This letter sets forth the agreement of Acqua Wellington North American
Equities Fund Limited (the "Purchaser") and Tegal Corporation (the "Company")
regarding the purchase by the Purchaser from the Company of the Company's common
stock (the "Common Stock") on the date hereof. The parties agree as follows:

1.             This Agreement relates to the purchase by the Purchaser of
        442,822 shares of the Company's Common Stock (the "Shares") for an
        aggregate purchase price of $2,970,000, which purchase is being settled
        by the parties on the date hereof.

2.             The Company is a corporation duly incorporated, validly existing
        and in good standing under the laws of Delaware. The Company has the
        requisite corporate power and authority to enter into and perform this
        Agreement and to issue and sell the Shares in accordance with the terms
        hereof. The execution, delivery and performance of this Agreement by the
        Company and the consummation by it of the transactions contemplated
        hereby have been duly and validly authorized by all necessary corporate
        action. A copy of the duly executed resolutions of the Board of
        Directors of the Company is attached hereto as Exhibit "B". This
        Agreement has been duly executed and delivered on behalf of the Company
        by a duly authorized officer. A copy of a duly executed incumbency
        certificate of the Company's duly authorized officers is attached hereto
        as Exhibit "C". This Agreement (assuming its due execution and delivery
        by the other party hereto) constitutes, or shall constitute when
        executed and delivered, a valid and binding obligation of the Company
        enforceable against the Company in accordance with its terms, subject to
        the effects of bankruptcy, insolvency, fraudulent conveyance,
        reorganization, moratorium and other similar laws relating to or
        affecting creditors' rights generally and general equitable principles
        (whether considered in a proceeding in equity or at law).

3.             The Shares to be issued under this Agreement have been duly
        authorized by all necessary corporate action and, when paid for or
        issued in accordance with the terms hereof, the Shares shall be validly
        issued, fully paid and nonassessable.

4.             The Company represents and warrants that (a) the Company has
        filed with the Securities and Exchange Commission (the "Commission")
        pursuant to Rule 415 under


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        the Securities Act of 1933, as amended (the "Securities Act"), a
        registration statement on Form S-3, Commission File Number 333-94093
        (such registration statement, as amended when it became effective on
        January 10, 2000 under the Securities Act, shall be referred to
        hereinafter as the "Registration Statement"); (b) the Company has filed
        a prospectus supplement to the Registration Statement in connection with
        this transaction; and (c) the Shares are registered under the
        Registration Statement. Copies of the Registration Statement and the
        Prospectus Supplement, each as filed (and declared effective, if
        applicable) by the Securities and Exchange Commission, are annexed
        hereto as Exhibits "D" and "E", respectively.

5.             [Deleted Intentionally.]

6.             The Company will continue to take all reasonable action
        necessary to continue the listing or trading of its Common Stock on the
        NASDAQ National Market or any relevant market or system, if applicable,
        and will comply in all material respects with the Company's reporting,
        listing (including, without limitation, the listing of the Shares
        purchased by the Purchaser) or other obligations under the rules of the
        NASDAQ National Market or any relevant market or system.

7.             The Company has filed with the Commission all reports, forms,
        registration statements, definitive proxy statements and documents
        required to be filed with the SEC since March 31, 1997 (the "Commission
        Filings"). The Company has delivered or made available to the Purchaser
        true and complete copies of the Commission Filings. As of their
        respective dates, each of the Commission Filings complied in all
        material respects with the requirements of the Securities Exchange Act
        of 1934 (the "Exchange Act") and the rules and regulations of the
        Commission promulgated thereunder, and, as of their respective dates,
        none of the Commission Filings referred to above contained any untrue
        statement of a material fact or omitted to state a material fact
        required to be stated therein or necessary in order to make the
        statements therein, in light of the circumstances under which they were
        made, not misleading. Each of the consolidated balance sheets of the
        Company included in or incorporated by reference into the Commission
        Filings (including the related notes and schedules) presents fairly the
        consolidated financial position of the Company and its consolidated
        subsidiaries as of its date, and each of the consolidated statements of
        income, retained earnings and cash flows of the Company included in or
        incorporated by reference into the Commission Filings (including any
        related notes and schedules) presents fairly the results of operations,
        retained earnings or cash flows, as the case may be, of the Company and
        its subsidiaries for the periods set forth therein (subject, in the case
        of unaudited statements, to normal year-end audit adjustments), in each
        case in accordance with GAAP consistently applied during the periods
        involved, except as may be noted therein.

8.             The Company will promptly notify the Purchaser of (a) any stop
        order or other suspension of the effectiveness of the Registration
        Statement and (b) the happening of any event as a result of which the
        prospectus included in the Registration Statement


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        includes an untrue statement of a material fact or omits to state a
        material fact required to be stated therein, or necessary to make the
        statements therein, in light of the circumstances under which they were
        made, not misleading.

9.             Except as otherwise required by applicable law or requirements
        of any stock exchange or NASDAQ, as applicable, the Company may not
        issue a press release or otherwise make a public statement or
        announcement with respect to the completion of the transaction
        contemplated hereby without the prior consent of the Purchaser, which
        shall not be unreasonably withheld.

10.             The Company and the Purchaser will indemnify the other party as
        provided in Exhibit "A" attached hereto. For purposes of said Exhibit A,
        capitalized terms used therein without definition shall have the same
        meanings therein as are ascribed to said terms in this Agreement.

11.             This Agreement shall be governed and construed in accordance
        with the substantive laws of the State of New York without giving effect
        to the conflicts of law principles thereunder. This Agreement
        constitutes the entire agreement between the parties with respect to the
        subject matter hereof and supersedes all prior agreements and
        undertakings, both written and oral, among the parties, or any of them,
        with respect to the subject matter hereof. This Agreement may be
        executed in two or more counterparts, and by the different parties
        hereto in separate counterparts, each of which when executed shall be
        deemed to be an original but all of which taken together shall
        constitute one and the same agreement.

12.             The Purchaser has the requisite power and authority to enter
        into and perform this Agreement and to purchase the Shares. The
        execution, delivery and performance of this Agreement by Purchaser and
        the consummation by it of the transactions contemplated hereby have been
        duly authorized by all necessary action. This Agreement constitutes, or
        shall constitute when executed and delivered, a valid and binding
        obligation of the Purchaser enforceable against the Purchaser in
        accordance with its terms, subject to the effects of bankruptcy,
        insolvency, fraudulent conveyance, reorganization, moratorium and other
        similar laws relating to or affecting creditors' rights generally and
        general equitable principles (whether considered in a proceeding in
        equity or at law).

13.             If any provision of this Agreement shall be invalid or
        unenforceable in any jurisdiction, such invalidity or unenforceability
        shall not affect the validity or enforceability of the remainder of this
        Agreement in that jurisdiction or the validity or enforceability of any
        provision of this Agreement in any other jurisdiction.

14.             No provision of this Agreement may be amended other than by an
        instrument in writing signed by the Company and the Purchaser and no
        provision hereof may be waived other than by an instrument in writing
        signed by the party against whom enforcement is sought.


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        Delivery of an executed copy of a signature page to this Agreement by
facsimile transmission shall be effective as delivery of a manually executed
copy of this Agreement and shall be effective and enforceable as the original.

        Please execute a copy of this letter which, when executed by the
Purchaser, will constitute an Agreement between the Company and the Purchaser.

                                       Very truly yours,

                                       TEGAL CORPORATION



                                       By:
                                          -------------------------------------
                                       Name:
                                       Title:

AGREED TO:

PURCHASER:

ACQUA WELLINGTON NORTH AMERICAN
     EQUITIES FUND LIMITED


By:
   ---------------------------------
Name:
Title:


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                                   EXHIBIT 'A'

                            TERMS OF INDEMNIFICATION


(a)     INDEMNIFICATION BY THE COMPANY. The Company will indemnify and hold
        harmless the Purchaser and each person, if any, who controls the
        Purchaser within the meaning of Section 15 of the Securities Act of
        1933, as amended (the "Securities Act"); or Section 20(a) of the
        Securities Exchange Act, as amended (the "Exchange Act"); from and
        against any losses, claims, damages, liabilities, costs and expenses
        (including, without limitation, reasonable costs of defense and
        investigation and all attorneys' fees and expenses) to which the
        Purchaser and each person, if any, who controls the Purchaser may become
        subject, under the Securities Act or otherwise, insofar as such losses,
        claims, damages, liabilities and expenses (or actions in respect
        thereof) arise out of or are based upon (i) any untrue statement or
        alleged untrue statement of a material fact contained, or incorporated
        by reference, in the Registration Statement relating to Shares being
        sold to the Purchaser (including the prospectus dated January 10, 2000,
        the prospectus supplement dated March 28, 2000 (the "Prospectus
        Supplement") which are a part of the Registration Statement), or any
        amendment or supplement to the Registration Statement, or (ii) the
        omission or alleged omission to state in that Registration Statement or
        any document incorporated by reference in the Registration Statement, a
        material fact required to be stated therein or necessary to make the
        statements therein not misleading, except insofar as such losses,
        claims, damages, liabilities, costs and expenses are caused by any such
        untrue statement or omission or alleged untrue statement or omission of
        material fact so made in reliance upon and in conformity with
        information furnished in writing to the Company by the Purchaser or on
        the Purchaser's behalf expressly for inclusion therein (an
        "Indemnifiable Matter").

        The indemnifying party will reimburse the indemnified party and each
        such controlling person promptly upon demand for any legal or other
        costs or expenses reasonably incurred by the indemnified party or the
        controlling person in investigating, defending against, or preparing to
        defend against any claim relating to the applicable Indemnifiable
        Matter.


(b)     INDEMNIFICATION BY PURCHASER Purchaser agrees to indemnify and hold
        harmless the Company, its officers, directors and agents and each
        person, if any, who controls the Company within the meaning of either
        Section 15 of the Securities Act or Section 20 of the Exchange Act to
        the same extent as the foregoing indemnity from the Company to the
        Purchaser, but only with respect to information relating to the
        Purchaser furnished in writing by the Purchaser or with the Purchaser's
        authorization on the Purchaser's behalf expressly for use in any
        registration statement or prospectus relating to the Shares, or any
        amendment or supplement thereto.


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(c)     INDEMNIFICATION PROCEDURES. Promptly after a person receives notice of a
        claim or the commencement of an action, suit or proceeding for which the
        person intends to seek indemnification under Paragraph (a), the person
        will notify the indemnifying party in writing of the claim or
        commencement of the action, suit or proceeding, but failure to notify
        the indemnifying party will not relieve the indemnifying party from
        liability under Paragraph (a), except to the extent the indemnifying
        party has been materially prejudiced by the failure to give notice. The
        indemnifying party will be entitled to participate in the defense of any
        claim, action, suit or proceeding as to which indemnification is being
        sought, or the indemnifying party may (but will not be required to)
        assume the defense against the claim, action, suit or proceeding with
        legal counsel chosen by the indemnifying party. After an indemnifying
        party notifies an indemnified party that the indemnifying party wishes
        to assume the defense of a claim, action, suit or proceeding the
        indemnifying party will not be liable for any legal or other expenses
        incurred by the indemnified party in connection with the defense against
        the claim, action, suit or proceeding, except that if, in the opinion of
        legal counsel to the indemnifying party, one or more of the indemnified
        parties should be separately represented in connection with a claim,
        action, suit or proceeding the indemnifying party will pay the
        reasonable fees and expenses of one separate counsel for the indemnified
        parties. Each indemnified party, as a condition precedent to receiving
        indemnification as provided in Paragraph (a), will, at the cost and
        expense of the indemnifying party, cooperate in all reasonable respects
        with the indemnifying party in the defense of the claim, action, suit or
        proceeding as to which indemnification is sought. No indemnifying party
        will be liable for any settlement of any claim, action, suit or
        proceeding effected without its prior written consent. No indemnifying
        party will, without the prior written consent of the indemnified party,
        effect any settlement of a pending or threatened claim, action or
        proceeding with respect which an indemnified party is, or is informed
        that it may be, made a party and for which it would be entitled to
        indemnification, unless the settlement includes an unconditional release
        of the indemnified party from all liability and claims which are the
        subject matter of the pending or threatened action other than financial
        obligations for which the indemnified party will be indemnified
        hereunder.

(d)     CONTRIBUTION. If for any reason the indemnification provided for in this
        Agreement is not available to, or is not sufficient to hold harmless, an
        indemnified party in respect of any loss, claim, damage, liability, cost
        or expense referred to in Paragraph (a), each indemnifying party will,
        in lieu of indemnifying the indemnified party, contribute to the amount
        paid or payable by the indemnified party, as a result of the loss,
        claim, damage, liability, cost or expense (i) in the proportion which is
        appropriate to reflect the relative benefits received by the
        indemnifying party, on the one hand, and by the indemnified party, on
        the other hand, from the sale of stock which is the subject of the
        claim, action, suit or proceeding which resulted in the loss, claim,
        liability, cost or expense or (ii) if that allocation is not permitted
        by applicable law, in such proportion as is appropriate to reflect not
        only the relative benefits of the sale of stock, but also the relative
        fault of the indemnifying party and the indemnified party with respect
        to the statements or omissions which are the subject of the claim,
        action, suit or proceeding that resulted in the loss,


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        claim, damage, liability, cost or expense as well as any other relevant
        equitable considerations.


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