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                                                                                                    EXHIBIT
    10.23

     

    EXCLUSIVE
      DISTRIBUTOR AGREEMENT

     

    This
      Exclusive Distributor Agreement (“Agreement”), made and effective this
October
      1, 2006,
      by and
      between Tegal
      Corporation and its subsidiaries
      (“Tegal”) located at 2201
      S. McDowell Blvd. Petaluma, CA USA
      and
Noah
      Corporation  (“Noah”)
      located at 4th
      Floor, 1-19-19 Ebisu, Shibuya, Tokyo, 150-0013 Japan.

     

    WHEREAS,
      Tegal
      desires to appoint Noah, and Noah desires to accept appointment, as Tegal’s
      exclusive distributor of certain Tegal products in Japan.

     

    NOW,
      THEREFORE,
      in
      consideration of the mutual agreements and promises set forth herein, the
      parties agree as follows:

     

    
      	1.  	
              Appointment.

            

    

     

    1.1  Appointment. Subject
      to the terms and conditions of this Agreement, Tegal hereby appoints Noah as
      its
      exclusive distributor of the Products (defined below) solely in the country
      of
      Japan (the “Territory”). Noah shall purchase Products from Tegal, inventory such
      Products, promote, distribute, sell and provide warranty and technical support
      for the Products it sells to its customers in the Territory (“Customers”). Noah
      agrees that it shall not market, promote, distribute, sell or provide services
      for the Products outside of the Territory and Tegal agrees that it shall not
      market, promote, distribute, sell or provide services for the Products within
      the Territory except through Noah pursuant to this Agreement. Noah shall
      promptly submit to Tegal, for Tegal’s attention and handling, the originals of
      all inquiries received by Noah from potential customers outside the
      Territory.

     

    1.2  Acceptance.
      Noah
      accepts the foregoing appointment and agrees, at all times, to use its best
      efforts to market, promote, distribute and maximize the sales of the Products
      in
      the Territory only and to fully perform all of its obligations under this
      Agreement in accordance with all applicable laws, decrees, regulations and
      other
      legal requirements.

     

    
      	2.  	
              Products.

            

    

     

    2.1  Products
      Defined. As
      used
      in this Agreement, the term “Products” shall mean the Systems Products, Spare
      Parts, related service parts and accessories manufactured and/or sold by Tegal
      listed in Exhibit
      A
      attached
      hereto. Tegal may update Exhibit A from time to time in its sole discretion
      upon
      notice to Noah.

     

    2.2  Commencement
      Dates. Except
      for those specific Systems Products opportunities listed in Exhibit
      B
      attached
      hereto, all Systems Product sales in the Territory shall be made by Noah no
      earlier than October 1, 2006. Noah may not begin the sale of Spare Parts to
      its
      Customers until January 1, 2007. 

     

    
      
        Confidential
          treatment has been requested for portions of this exhibit by Tegal Corporation.
          The copy filed herewith omits the information subject to the confidentiality
          request. Omissions are designated as *****. A complete version of the exhibit
          has been filed seperately with the Securities and Exchange Commission

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    2.3  Product
      Discontinuance.
      Tegal
      will provide Noah with at least six (6) months prior written notice of any
      intention to discontinue production of any Product. During such six (6) month
      period, Noah shall have the right to make a one time buy of such Product. Noah
      shall have the right to schedule shipment of such one time buy prior to the
      end
      of the notice period. The one time buy amount shall be no more than fifty
      percent (50%) over the forecasted amount for such period.

     

    
      	3.  	
              Process
                and Terms of Sale and
                Supply.

            

    

     

    3.1  Cooperation.
      Noah
      and
      Tegal shall cooperate and work together to develop relationships within the
      Territory with Noah Customers and prospective customers. 

     

    3.2  Forecasts.
      Noah
      will provide Tegal, on a calendar quarter basis, written, rolling, non-binding,
      12 month forecasts for the quantities of Products it anticipates
      purchasing.

     

    3.3  Purchase
      Orders and Product Supply. Noah
      shall submit to Tegal written purchase orders for the Products. All purchase
      orders shall reference this Agreement and shall be consistent with established
      Tegal Product lead times and the terms and conditions of this Agreement. All
      orders by Noah are subject to acceptance by Tegal, and Tegal will provide an
      acknowledgement of its acceptance or rejection of each order within five (5)
      business days of receipt of Noah’s purchase orders. Tegal will use reasonable
      efforts to deliver Products at the times specified in its acceptance of Noah’s
      purchase orders, provided that Tegal has the right not to carry out an order
      for
      reasons of manufacturing or regulatory constraints or financial
      impracticability, as determined by Tegal in its sole discretion. Tegal reserves
      the right to allot available inventories among all of its distributors at its
      discretion. Tegal shall promptly notify Noah if any order, or any portion of
      any
      order, cannot be filled, or of any delays in delivery. Tegal shall have no
      liability to Noah with respect to purchase orders that are not
      accepted.

     

    3.4  Shipment,
      Title and Risk of Loss. Tegal
      agrees to ship the Products to Noah or directly to the Customers, as agreed
      upon
      by the parties on a case-by-case basis. Delivery shall be ex
      works (Incoterms 2000) Tegal’s
      shipping point. Title and risk of loss for the Products will transfer to Noah
      at
      the shipping point. Tegal shall select the shipper in its reasonable judgment.
      Noah shall bear all costs associated with shipment of the Products and insurance
      of the Products during shipment. All Products shall be deemed accepted upon
      delivery.

     

    3.5  Cancellation.
      Noah
      must submit in writing to Tegal any cancellation request. Cancellation fees
      will
      be assessed based upon the length of time from the date a written notice is
      received by Tegal to the first scheduled shipment date and in accordance with
      Tegal’s then standard cancellation fees. Notwithstanding the foregoing,
      customized orders of Systems Products may not be cancelled. In addition, no
      cancellations will be accepted less than thirty (30) days prior to the scheduled
      delivery date.

     

    3.6  Rescheduling.
      Re-schedule
      requests must be made in writing at least thirty (30) days prior to the
      scheduled shipment date. Any order may be re-scheduled only once. Requests
      to
      delay shipments may not exceed ninety (90) days from the original acknowledged
      delivery date. Any re-scheduled order may not thereafter be canceled or further
      modified, and is subject to full payment by Noah of the selling
      price.

     

    
      
        Confidential
          treatment has been requested for portions of this exhibit by Tegal Corporation.
          The copy filed herewith omits the information subject to the confidentiality
          request. Omissions are designated as *****. A complete version of the exhibit
          has been filed seperately with the Securities and Exchange Commission

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    3.7  Tegal’s
      Standard Terms and Conditions. All
      sales
      of Products to Noah during the term of this Agreement shall be subject to the
      terms and conditions of this Agreement and to Tegal’s Standard Terms and
      Conditions of Sale in effect at the time of each such purchase. A copy of
      Tegal’s current Standard Terms and Conditions of Sale is attached as
Exhibit
      C. Tegal
      may
      update its Standard Terms and Conditions of Sale from time to time in its sole
      discretion by providing written notice to Noah. Tegal will use reasonable
      efforts to provide such notice at least sixty (60) days in advance of their
      effectiveness. In the event of any conflict between the terms of this Agreement
      and the Standard Terms and Conditions of Sale then in effect, this Agreement
      shall control. 

     

    3.8  Terms
      and Conditions Applicable to Customers. Noah
      agrees to include in all Product sales agreements with its Customers provisions
      consistent in all material respects with the following provisions of Tegal’s
      Standard Terms and Conditions of Sale set forth in Exhibit
      C:
      Confidential Information, Warranty Disclaimer, Limitation of Liability, Software
      and No License by Implication provisions. 

     

    3.9  No
      Additional Terms and Conditions. All
      Products shall be sold pursuant to the provisions of this Agreement. In the
      event of any inconsistency between this Agreement and Noah’s purchase order or
      Noah’s additional or different terms and conditions, if any, the terms of this
      Agreement shall prevail and Noah’s terms are hereby rejected. Neither Tegal’s
      commencement of performance, acceptance of an order or delivery of Products
      shall be deemed or construed as acceptance of Noah’s additional or different
      terms and conditions, if any. Except as set forth in this Agreement, no other
      terms (including, but not limited to, any and all terms set forth on Noah’s
      purchase orders) control the sale of the Products to Noah.

     

    3.10  Return
      of Products. Except
      for Section 5.4 and except for the warranty remedy obligations set forth in
      Section 11 below, Tegal shall not be obligated to accept any Products that
      are
      returned. In the event such returns are accepted, Tegal may impose a reasonable
      restocking charge.

     

    
      	4.  	
              Duties
                of Noah.

            

    

     

    4.1  Place
      of Business. Noah
      shall maintain a place of business in the Territory. 

     

    4.2  Marketing
      and Promotion

     

    a.  Marketing
      Plan. On
      the
      first day of November of each calendar year, Noah will submit to Tegal for
      Tegal’s approval a marketing plan outlining Noah’s planned marketing and
      promotional activities for the Products for the coming year. Noah shall work
      in
      good faith to revise or modify the marketing plan in accordance with Tegal’s
      reasonable requests. If the parties disagree regarding the elements of the
      marketing plan, the parties agree to discuss in good faith and resolve any
      issues prior to implementation of Noah’s Product marketing plan.

     

    
      
        Confidential
          treatment has been requested for portions of this exhibit by Tegal Corporation.
          The copy filed herewith omits the information subject to the confidentiality
          request. Omissions are designated as *****. A complete version of the exhibit
          has been filed seperately with the Securities and Exchange Commission

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    b.  Policies.
      Noah
      shall implement and carry out its marketing plans as approved by Tegal. Noah
      will cooperate with Tegal in providing for continuous and effective advertising
      and promotion of Products throughout the Territory, and Noah agrees at Noah’s
      expense to use its best efforts to actively promote the Products and participate
      in, and faithfully comply with, the terms and conditions of such cooperative
      advertising programs as Tegal may establish and offer to Noah from time to
      time.
      Nothing herein shall prevent Noah from independently advertising and marketing
      the Products within the Territory, provided the form and content of the
      advertising or marketing materials are approved by Tegal in advance.
      Notwithstanding any of the foregoing, Noah shall comply with all advertising,
      marketing promotional and sales policies of Noah in its activities hereunder.
      

     

    c.  Events.
      Noah
      will participate in relevant exhibitions and trade shows in the
      Territory.

     

    d.  Sales
      Personnel. Noah
      shall hire sales personnel to introduce, promote, market and sell Products
      in
      the Territory. Such sales personnel shall be adequately trained by Noah. Noah
      shall at all times employ a minimum of two full-time sales personnel dedicated
      exclusively to promoting, marketing, and selling the Systems Products and Spare
      Parts in the Territory.

     

    e.  Press
      Releases. All
      press
      and media releases, public announcements and public disclosures by either party
      relating to this Agreement must be coordinated with and approved by Tegal prior
      to the release thereof.

     

    4.3  Installation
      and Warranty Services.

     

    a.  Scope
      of Services.
      Noah
      shall have the responsibility to install, service, and maintain the Products
      sold to its Customers, subject to service policies reasonably satisfactory
      to
      Tegal, and in doing so shall use qualified personnel. Noah shall perform all
      necessary warranty work for the Products pursuant to Tegal’s warranty
      obligations to Customers and provide installation and other related services
      to
      the Customer at no charge to the Customer during the warranty periods applicable
      for each Product. Noah represents and warrants that its provision of such
      services shall be prompt and of the highest quality and shall be performed
      only
      by properly trained personnel of Noah. Noah shall be responsible for any and
      all
      training and instruction of those of its personnel providing technical support
      for the Products, unless otherwise agreed by Tegal. Noah shall at all times
      employ a minimum of ***** (*****) full-time ***** dedicated exclusively to
      supporting the Systems Products in the Territory, unless otherwise agreed in
      writing between Tegal and Noah. In addition, Noah shall employ a minimum of
      ***** full-time *****, qualified to develop and support applications on the
      Systems Products and ***** part-time *****, qualified to develop and support
      PVD
      applications, and such support shall be performed on the Systems Products at
      either Noah’s or Customer’s facilities, as determined by Noah in its reasonable
      judgment. 

     

    
      
        Confidential
          treatment has been requested for portions of this exhibit by Tegal Corporation.
          The copy filed herewith omits the information subject to the confidentiality
          request. Omissions are designated as *****. A complete version of the exhibit
          has been filed seperately with the Securities and Exchange Commission

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    b.  Warranty
      Service Scope.
      Noah
      shall provide warranty service for the entire warranty period applicable to
      each
      Product sold to Customers, as required by the Tegal. Noah shall be available
      to
      Customers for warranty or technical support service twenty-four (24) hours
      per
      day, seven (7) days a week. Noah hereby acknowledges that the standard warranty
      period for Systems Products is one year after Systems Product deliver and ninety
      (90) days from delivery for Spare Parts. Noah shall be solely responsible for
      any warranty services that it offers in excess of the foregoing warranty period,
      unless expressly agreed by Tegal in writing on a case-by-case
      basis.

     

    4.4  Former
      Tegal Employees. As
      partial consideration for the grant of territorial exclusivity as a distributor
      of Tegal Products, Noah
      shall, upon entering into this Agreement and in accordance with the schedule
      set
      forth in Exhibit
      D,
      employ
      personnel previously employed by Tegal Japan Inc. in the Territory. Noah agrees
      to use all reasonable efforts to employ such personnel for ***** following
      the
      date of their employment by Noah, with salaries and benefits consistent with
      the
      salaries and benefits provided to such employees in the six month period
      immediately preceding this Agreement.

     

    4.5  Maintenance
      of Inventory. Noah
      shall, at all times and at its expense, maintain adequate warehousing,
      equipment, transport facilities, training facilities and other facilities to
      ensure proper storage and transport of Products shipped to Noah. All Products
      must be stored in a suitable warehouse, in line with industry storage standards
      for like products in order to ensure their preservation. Noah undertakes to
      ensure that the quality of the Products shall not be altered by the storage
      conditions. In order to comply with Tegal’s quality control standards, Noah
      shall: (i) when providing technical and warranty support, use the Products
      in
      compliance with applicable laws, decrees, regulations and other legal
      requirements; (ii) permit Tegal to inspect Noah’s storage and support facilities
      during normal business hours, without advance notice but in a manner that is
      not
      unreasonably disruptive to the business of Noah, to confirm that Noah’s handling
      and use of such Products is in compliance with this Agreement. Noah must secure
      and maintain all necessary governmental permits, licenses, registrations and
      customs clearances required in connection with the importation, resale and
      support of the Products in the Territory. 

     

    4.6  Records.
      Noah
      shall maintain during the term of this Agreement and for a period of three
      (3)
      years thereafter accurate books and records of its sales, service and
      promotional activities pursuant to this Agreement.

     

    4.7  Reporting
      Requirements. 

     

    a.  Sales
      Reports. Noah
      shall submit written sales reports to Tegal within five (5) days after the
      end
      of each calendar quarter, setting forth net sales of the Products in value
      and
      units and stock levels for the prior quarter. 

     

    
      
        Confidential
          treatment has been requested for portions of this exhibit by Tegal Corporation.
          The copy filed herewith omits the information subject to the confidentiality
          request. Omissions are designated as *****. A complete version of the exhibit
          has been filed seperately with the Securities and Exchange Commission

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    b.  Marketing
      Reports. Within
      five (5) days after the end of each calendar quarter, Noah shall also submit
      a
      written marketing report to Tegal setting forth information on market conditions
      and marketing activities undertaken by Noah, its Customer and prospective
      customer responses concerning the Products and activities of competitors within
      the Territory during the preceding quarter.

     

    4.8  No
      Competitive Products. Noah
      represents and warrants that it does not currently and will not, during the
      term
      of this Agreement, manufacture or otherwise produce, market, promote, distribute
      or sell, in any manner, directly or indirectly, any products in the Territory
      which are similar to, in competition with, or that might interfere with the
      sale
      of the Products. If, at any time, Noah or any of its affiliates is reasonably
      deemed by Tegal to be in competition with the Products in the Territory, Tegal
      may terminate this Agreement immediately by written notice to Noah.

     

    4.9  Non-Solicitation.
      Except
      as
      set forth in Section 4.4 above and to the maximum extent permitted by applicable
      law, for the duration of this Agreement, and for a period of one year from
      the
      date of termination thereof, Noah will not solicit for hire any employee of
      Tegal or any former employee of Tegal who has been employed by Tegal within
      the
      previous twelve (12) months. 

     

    4.10  Expenses.
      Noah
      will
      pay and is responsible for all expenses incurred in connection with its
      activities under this Agreement. 

     

    
      	5.  	
              Duties
                of Tegal

            

    

     

    5.1  Training
      and Materials. Tegal
      agrees to provide training courses to Noah, which will include training for
      the
      operation, installation and maintenance of the Products. Noah shall attend
      such
      training prior to the installation of the first Systems Product sold by Noah
      within the Territory and will obtain additional training as recommended and
      offered by Tegal. Tegal, in its sole discretion, will provide Noah promotional
      literature, reprints of technical references, and other materials to facilitate
      Noah’s efforts in promoting the sale of and servicing the Products in the
      Territory. Tegal will furnish such materials without charge. In the event that
      Noah desires to modify the foregoing materials, or to develop its own such
      materials for use within the Territory regarding the Products, any such
      materials produced by Noah in relation to the Products (including, where
      necessary, any language translation thereof) shall first be submitted to Tegal
      for Tegal’s written approval. Noah shall not use such materials without Tegal’s
      prior written approval. Tegal will not unreasonably withhold or delay such
      approval.

     

    5.2  Assistance.
      Tegal
      will respond promptly and constructively to requests by Noah for technical
      or
      application assistance.

     

    5.3  Referrals.
      Tegal
      will refer all potential purchasers of the Products in the Territory to the
      Noah.

     

    
      
        Confidential
          treatment has been requested for portions of this exhibit by Tegal Corporation.
          The copy filed herewith omits the information subject to the confidentiality
          request. Omissions are designated as *****. A complete version of the exhibit
          has been filed seperately with the Securities and Exchange Commission

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    5.4  Consignment
      Stock. Tegal
      will supply to Noah Spare Parts on a consignment basis (the “Consignment Stock”)
      to meet Tegal’s projected warranty and certain routine service parts
      requirements for Customers in the Territory. The Consignment Stock shall be
      held
      by Noah at no charge and shall be subject, with reasonable notice by Tegal,
      to
      inspection, audit, removal and replacement by Tegal, as may from time to time
      be
      required. Noah shall promptly notify Tegal of any removal of Spare Parts from
      the Consignment Stock so that Tegal may invoice Noah and replace the Spare
      Part.
      Noah hereby agrees that no Spare Parts will be loaned to Customers or to any
      third party for any reason. 

     

    
      	6.  	
              Pricing
                and Payment

            

    

     

    6.1  Systems
      Products Pricing. For
      reference purposes only, Tegal will supply Noah with a confidential Tegal price
      list for Systems Products. The initial price list for Systems Products and
      Spare
      Parts is attached hereto as Exhibit
      E.
      Tegal
      may change the price list and the prices set forth therein from time to time
      in
      its sole discretion upon at least sixty (60) days prior written notice to Noah.
      Noah acknowledges and agrees that the price list for the Territory may differ
      from price lists Tegal provides for different regions. Given the nature of
      the
      sales process for Systems Products, the parties will have to work together
      in
      all sales efforts for System Products in the Territory. All prices and discounts
      offered to Noah are net of and do not include the costs for shipping, insurance
      and any additional services or products offered by Noah to a Customer. Unless
      Tegal agrees to a different discount rate for a particular sale of System
      Products to a Customer, Tegal agrees to sell System Products to Noah at a
      ***** 
      percent
      (*****%) discount from the listed price on the Tegal price list. Tegal agrees
      to
      consider in good faith deviations from the standard discount rate upon request
      from Noah for particular Customer opportunities but shall not be obligated
      to
      offer greater discount rates. 

     

    6.2  Spare
      Parts Pricing. Noah
      may
      purchase Spare Parts from Tegal at a discount of ***** percent (*****%) off
      of
      the prices set forth in the price list attached hereto as Exhibit
      E.  

     

    6.3  Pricing
      of Products to Customers.
      Noah
      shall have full discretion to set its own prices for the Products it sells
      to
      Customers.

     

    6.4  Invoicing;
      Payment. If
      agreed
      upon in advance by Tegal on a case-by-case basis, Tegal may invoice Noah for
      sales of Systems Products based on a payment plan of ***** percent (*****%)
      of
      the discounted sales price payable upon delivery and ***** percent (*****%)
      payable upon Customer acceptance. Noah
      shall pay all charges due hereunder within thirty (30) days after the date
      of
      Tegal’s invoice. If Noah fails to meet its payment obligations when due or if
      Noah’s financial condition, in the reasonable opinion of Tegal, becomes
      impaired, then Tegal shall have the right to refuse any orders placed by Noah,
      in whole or in part. In addition, if Noah shall fail to make any payment due
      hereunder on the date such payment is due and payable, then such portion that
      remains outstanding shall bear simple interest until paid in full at a rate
      equal to the lesser of (i) *****% per month and (ii) the maximum interest rate
      permitted under applicable law. Noah shall not be entitled to set off any amount
      owed by Noah to Tegal against any amount owed by Tegal to Noah pursuant to
      this
      Agreement or otherwise. Noah shall reimburse Tegal for any costs or expenses
      incurred by Tegal in seeking recovery from Noah of any amounts due hereunder.
      

     

    
      
        Confidential
          treatment has been requested for portions of this exhibit by Tegal Corporation.
          The copy filed herewith omits the information subject to the confidentiality
          request. Omissions are designated as *****. A complete version of the exhibit
          has been filed seperately with the Securities and Exchange Commission

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    6.5  Taxes.
      The
      prices specified in this Agreement are exclusive of any sales, use, excise,
      or
      similar taxes, and of any export and import duties, which may be levied upon
      or
      collectible by Tegal as a result of the licensing or shipment of Products to
      Noah or its Customers, or any services performed by Tegal in connection
      herewith, or any commissions earned by Noah. Noah agrees to pay and otherwise
      be
      fully responsible for, and indemnify and hold Tegal harmless from any such
      taxes
      and duties, unless in lieu thereof Noah provides Tegal with an exemption
      certificate acceptable to the relevant governmental authorities. Tegal shall
      have the right, but shall not be obligated, to pay any such taxes or duties
      directly, in which event Noah shall immediately reimburse Tegal in the amount
      thereof upon presentation by Tegal of evidence of payment. 

     

    6.6  Tax
      Withholding.
      In the
      event that Noah is required to withhold taxes imposed upon Tegal for any payment
      under this Agreement by virtue of the statutes, laws, codes or governmental
      regulations of a country in which the Products are provided, then the payment
      then due to Tegal and remitting such taxes to the proper authorities on a timely
      basis, and the payments provided for under this Agreement will be adjusted
      appropriately, provided that Noah supplies Tegal with official documentation
      and/or tax receipts on such withholdings supporting such taxes and such payments
      as may be required by Tegal for its tax records on or before the date on which
      such payment is due Tegal under this Agreement.

     

    6.7  Currency.
      All
      payments due hereunder shall be made in United States Dollars.

     

    6.8  Billable
      Services.
      Notwithstanding any other provision herein, Tegal shall continue to invoice
      its
      customers within the Territory for any billable service performed by Tegal’s
      employees through December 31, 2006. As of January 1, 2007, Noah shall invoice
      Customers for any billable service performed by its employees. As of January
      1,
      2007, Tegal will no longer offer services to customers in the Territory,
      provided, however, that Noah complies with its service obligations
      hereunder.

     

    
      	7.  	
              Financial
                Obligations and
                Policies

            

    

     

    7.1  Sufficient
      Capital. Noah
      will
      maintain and employ in connection with Noah’s business and operations under this
      Agreement such working capital and net worth as may be reasonably required
      to
      enable Noah to properly and fully to carry out and perform all of Noah’s duties,
      obligations and responsibilities under this Agreement.

     

    7.2  Financial
      Statements. Noah
      will
      furnish Tegal with financial statements in such form as Tegal may reasonably
      require from time to time for credit purposes.

     

    
      
        Confidential
          treatment has been requested for portions of this exhibit by Tegal Corporation.
          The copy filed herewith omits the information subject to the confidentiality
          request. Omissions are designated as *****. A complete version of the exhibit
          has been filed seperately with the Securities and Exchange Commission

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    7.3  Audit
      Rights. On
      not
      less than seven (7) days written notice to Noah and no more often than twice
      annually, Tegal and its certified public accountants and other auditors shall
      have full access to the books and records of Noah pertaining to activities
      under
      this Agreement. Tegal, its certified public accountants and other auditors
      shall
      have such access during normal business hours during the term of this Agreement
      and for a period of two (2) years after its expiration or termination. Whilst
      on
      Noah's premises, Tegal, its certified public accountants and other auditors
      shall conduct their audit review in a manner that is not unreasonably disruptive
      to the business of Noah. Tegal agrees and shall require its certified public
      accountants and other auditors to agree to hold confidential all information
      learned in the course of any examination of Noah’s books and records hereunder,
      except when it is necessary for Tegal, its certified public accountants or
      other
      auditors to reveal such information in order to enforce Tegal’s rights under
      this Agreement in court, or similar dispute resolution or enforcement
      proceedings or action, or except when compelled by law. In the event that such
      audit reveals an underpayment by Noah of five percent (5%) or more, Noah shall
      bear the costs of such audit and promptly pay the underpayment revealed.

     

    7.4  Suspension
      of Shipments. In
      addition to any other right or remedy to which Tegal may be entitled, shipments
      of Products to Noah or its Customers may be suspended at Tegal’s discretion in
      the event that Noah fails to promptly and faithfully discharge each and every
      obligation in this Section 7.

     

    
      	8.  	
              Intellectual
                Property and Software

            

    

     

    8.1  License.
      Subject
      to the terms and conditions of this Agreement, Tegal hereby grants to Noah
      an
      exclusive (except as to Tegal as set forth in this Agreement) non-transferable
      license, without right to sublicense, to import, offer to sell and sell Products
      in the Territory and to distribute any software or firmware in the Territory
      solely as incorporated therein.

     

    8.2  License
      Restrictions.
      The
      license granted to Noah under Section 8.1 shall be subject to the following
      restrictions:

     

    (A)  Noah
      shall not modify or alter the Products in any way, or offer the Products in
      combination with any other products or services of Noah or any third party,
      except as may be expressly set forth in this Agreement, without the prior
      written consent of Tegal. All such requests shall be in English.

     

    (B)  Noah
      agrees that except as may be expressly permitted by applicable law, Noah will
      not cause or permit the reverse engineering, translation or disassembly of
      the
      Products. If a jurisdiction in the Territory expressly permits by applicable
      law
      any of the foregoing activities regardless of contractual restriction, then
      Noah
      agrees that prior to engaging in any such activity Noah will first notify Tegal
      of its desire to reverse engineer the Products, and Tegal may, in its
      discretion, either provide such information to Noah or impose reasonable terms
      and conditions on such use of the Products to ensure that Tegal proprietary
      rights are protected.

     

    (C)  The
      license granted in Section 8.1 above is granted solely to Noah, and not, by
      implication or otherwise, to any parent, subsidiary or affiliate of
      Noah.

     

    (D)  Noah
      shall not remove, obscure, or alter any Tegal or other proprietary rights notice
      affixed to or contained within the Products or associated
      documentation.

     

    
      
        Confidential
          treatment has been requested for portions of this exhibit by Tegal Corporation.
          The copy filed herewith omits the information subject to the confidentiality
          request. Omissions are designated as *****. A complete version of the exhibit
          has been filed seperately with the Securities and Exchange Commission

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    8.3  Intellectual
      Property Protection.
      Noah
      will immediately bring to the attention of Tegal any improper or wrongful use
      of
      Tegal’s trade marks, emblems, designs, models or other intellectual property
      rights which come to the notice of Noah and will in the performance of its
      duties under this Agreement use every effort to safeguard the property rights
      and interests of Tegal.

     

    8.4  Trademark
      License.
      Subject
      to the terms and conditions of this Agreement, Tegal hereby grants to
      Distributor a limited, non-exclusive, non-transferable, royalty-free license
      to
      use Tegal’s trademarks, trade names, designs, trade dress, copyrights,
      copyrightable works, markings, insignias, logos, slogans, and legends that
      Tegal
      uses in connection with the Products (collectively, the “Marks”) for marketing
      the Products in the Territory. Tegal may from time to time use other or
      additional Marks to the Products. Noah agrees to state in appropriate places
      on
      all materials using the Marks that the Marks are trademarks of Tegal and to
      include the appropriate trademark symbols. Noah’s use of the Marks must be in
      strict conformity with all applicable laws, decrees, regulations and other
      legal
      requirements as well as all applicable Tegal usage guidelines. Tegal grants
      no
      other rights than expressly granted hereunder, and Noah acknowledges Tegal’s
      exclusive ownership of the Marks and the renown of Tegal’s Marks worldwide. Noah
      agrees not to take any action inconsistent with such ownership and further
      agrees to take, at Tegal’s expense, any action, including the conduct of legal
      proceedings, which Tegal deems necessary to establish and preserve Tegal’s
      exclusive rights in and to its Marks. Noah shall not adopt, use or attempt
      to
      register any trademarks or trade names that are confusingly similar to the
      Marks
      or in such a way as to create combination marks with the Marks. Noah shall
      provide Tegal with samples of all materials that use the Marks prior to their
      public use or display for Tegal’s quality control purposes. Tegal may suspend or
      terminate, in whole or in part, Noah’s license to use the Marks if, in Tegal’s
      reasonable judgment, Noah’s use of the Marks does not meet Tegal’s then current
      trademark usage policy. Tegal agrees to provide Noah in advance any updates
      to
      Tegal’s trademark usage policy and provide Noah reasonable time, not to exceed
      60 days, to make changes to marketing and other materials that incorporate
      the
      Marks. Tegal agrees to notify Noah of any failure to meet the Tegal trademark
      usage policy and Noah shall have a grace period of no more than ten days to
      rectify any such failure unless Tegal agrees to extend such grace period in
      Tegal’s sole discretion.

     

    8.5  Ownership.
      Noah
      acknowledges that any and all intellectual property rights in or related to
      the
      Products are and shall remain the property of Tegal or Tegal’s licensors, and
      Noah shall not at any time during or after the expiration or termination of
      this
      Agreement in any way question or dispute the ownership thereof by Tegal. All
      software, even if embedded in the Products, is licensed not sold by Tegal.
      All
      rights not expressly granted under this Agreement are reserved.

     

    
      
        Confidential
          treatment has been requested for portions of this exhibit by Tegal Corporation.
          The copy filed herewith omits the information subject to the confidentiality
          request. Omissions are designated as *****. A complete version of the exhibit
          has been filed seperately with the Securities and Exchange Commission

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    8.6  Software
      Licensed. Without
      limiting any of the foregoing, any software Tegal provides to Noah for its
      own
      use or for sublicensing to Customers (“Software”) will be licensed, not sold,
      pursuant to the terms of Tegal’s standard Master Software License Agreement.
      Such agreement contains provisions, under which Noah agrees to be bound,
      relating to software ownership, protection and conditions for sublicensing
      the
      software to Customers. Such Software shall be considered Proprietary Information
      pursuant to Section 9. 

     

    
      	9.  	
              Confidential
                Information

            

    

     

    9.1  Confidential
      Information Defined. “Confidential
      Information” means any and all technical and non-technical information either
      party provides the other hereunder that is marked or otherwise identified at
      the
      time of disclosure as confidential or proprietary, including trade secrets,
      know-how, firmware, designs, schematics, techniques, software code, technical
      documentation, specifications, plans or any other information relating to any
      research project, work in process, future development, scientific, engineering,
      manufacturing, marketing or business plan, financial and pricing information,
      customer information, or financial or personnel matter relating to either party,
      its present or future products, sales, suppliers, customers, employees,
      investors or business, whether in written, oral, graphic or electronic form.
      Notwithstanding the foregoing, any pricing or technical information regarding
      the Products or their components shall be deemed the Confidential Information
      of
      Tegal, regardless of marking or identification. 

     

    9.2  Nondisclosure
      and Nonuse.
      All
      Confidential Information exchanged between the parties pursuant to this
      Agreement shall not be distributed, disclosed, or disseminated in any way or
      form by the receiving party to anyone except its own employees, subcontractors
      or advisors who have a reasonable need to know such Confidential Information
      and
      who have been advised of the confidential nature and required to observe the
      terms and conditions hereof; nor shall Confidential Information be used by
      the
      receiving party for its own purpose, except for the purposes of exercising
      its
      rights or fulfilling its obligations under this Agreement. The restriction
      on
      disclosure will not apply to Confidential Information which is required to
      be
      disclosed by a court, government agency or regulatory requirement, provided
      that
      recipient shall first notify the disclosing party of such disclosure requirement
      or order and use reasonable efforts to obtain confidential treatment or a
      protective order.

     

    9.3  Exclusions.
      The
      obligations of Section 9.2 shall not apply, however, to any information
      which:

     

    (A)  is
      already in the public domain or becomes available to the public through no
      breach of this Agreement or other confidentiality obligation by the receiving
      party;

     

    (B)  was
      in
      the receiving party’s possession prior to receipt from the disclosing party as
      proven by the receiving party’s written records; or

     

    (C)  is
      received independently on a non-confidential basis from a third party free
      to
      disclose such information to the receiving party.

     

    
      
        Confidential
          treatment has been requested for portions of this exhibit by Tegal Corporation.
          The copy filed herewith omits the information subject to the confidentiality
          request. Omissions are designated as *****. A complete version of the exhibit
          has been filed seperately with the Securities and Exchange Commission

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	10.  	
              Relationship
                of the Parties

            

    

     

    10.1  No
      Authority to Bind. Noah
      shall have no power or authority to bind or to obligate Tegal to any contract
      or
      any other commitment with any third party, including but not limited to
      Customers, prospective customers, or any person who contemplates any business
      relationship with Tegal or Noah. 

     

    10.2  Independent
      Contractor.
      Noah
      shall be and act under this Agreement solely as an independent contractor,
      and
      shall not be an agent of Tegal. Nothing contained in this Agreement shall be
      construed to (i) give either party the power to direct and control the
      day-to-day activities of the other or (ii) constitute the parties as partners,
      joint ventures, co-owners or otherwise as participants in a joint or common
      undertaking. Neither Noah nor its agents or employees are the agents of Tegal
      for any purpose except as expressly set forth in this Agreement.

     

    10.3  Noah’s
      Obligations. All
      financial obligations associated with the business of Noah are its sole
      responsibility. All sales, service and other agreements between Noah and its
      Customers are Noah’s exclusive responsibility and shall have no binding effect
      on Tegal.

     

    10.4  Acts
      of Noah. Noah
      shall be solely responsible for, and shall indemnify and hold Tegal free and
      harmless from, any and all claims, damages, expenses, including reasonable
      attorney’s fees, and any other liability arising out of or in connection with
      the acts of Noah, its employees, servants, agents or any of them.

     

    
      	11.  	
              Representations
                and Warranties

            

    

     

    11.1  General
      Representations.
      The
      parties hereby represent and warrant:

     

    a.  Corporate
      Power. It
      is
      duly organized and validly existing under the laws of the state of its
      incorporation and has full corporate power and authority to enter into this
      Agreement and to carry out the provisions hereof.

     

    b.  Due
      Authorization.
      It is
      duly authorized to execute and deliver this Agreement and to perform its
      obligations hereunder.

     

    c.  Binding
      Agreement.
      This
      Agreement is a legal and valid obligation binding upon it and enforceable in
      accordance with its terms. The execution, delivery and performance of this
      Agreement by such party does not conflict with any agreement, instrument or
      understanding, oral or written, to which it is a party or by which it may be
      bound, nor violate and law or regulation of any court, governmental body or
      administrative or other agency having jurisdiction over it.

     

    
      
        Confidential
          treatment has been requested for portions of this exhibit by Tegal Corporation.
          The copy filed herewith omits the information subject to the confidentiality
          request. Omissions are designated as *****. A complete version of the exhibit
          has been filed seperately with the Securities and Exchange Commission

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    11.2  Limited
      Performance Warranty.
      Tegal
      represents and warrants that the Products will perform substantially in
      accordance with the specifications set forth in the applicable Tegal
      documentation for a period of one year after delivery for Systems Products
      and
      ninety (90) days after delivery for Spare Parts. Noah’s sole and exclusive
      remedy and Tegal’s sole and exclusive obligations in the event of a breach of
      the foregoing warranty will be that Tegal will repair or replace any defective
      Products per Tegal’s standard Return Material Authorization (RMA) and warranty
      repair or replacement process.

     

    11.3  Warranty
      Disclaimer. EXCEPT
      AS
      EXPRESSLY SET FORTH IN SECTION 11.2, TO THE MAXIMUM EXTENT PERMITTED BY
      APPLICABLE LAW, TEGAL EXPRESSLY DISCLAIMS ALL WARRANTIES AND CONDITIONS
      REGARDING THE PRODUCTS, WHETHER EXPRESS, IMPLIED OR STATUTORY, AND INCLUDING
      BUT
      NOT LIMITED TO ALL WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
      PURPOSE, TITLE AND NON-INFRINGEMENT OF THIRD PARTY RIGHTS. NOAH UNDERSTANDS
      AND
      AGREES THAT THE DISCLAIMER OF WARRANTIES IN THIS AGREEMENT IS A FUNDAMENTAL
      PART
      OF THIS AGREEMENT AND THAT TEGAL WOULD NOT AGREE TO ENTER THIS AGREEMENT WITHOUT
      SUCH DISCLAIMERS. 

     

    11.4  No
      Warranty Pass Through.
      Except
      for the limited warranty expressly set forth in Section 11.2 above, Noah shall
      not be entitled to make or pass through any warranties to any third parties
      regarding the Products unless specifically authorized in writing by Tegal on
      a
      case-by-case basis. Noah shall be responsible for all representations and
      warranties it makes to Customers. Noah indemnifies and holds Tegal harmless
      from
      and against any and all liabilities, losses, damages, costs and expenses,
      including without limitation attorney’s fees and costs, incurred by Tegal
      resulting from any claims based on or related to any representation or warranty
      made by Noah regarding the Products that was not specifically authorized in
      writing in advance by Tegal.

     

    11.5  No
      Illegal Activity. The
      parties represent and warrant that each shall at all times refrain from engaging
      in any illegal, unfair, deceptive or unethical business practices whatsoever,
      whether with respect to the Products or otherwise.

     

    11.6  No
      Agency.
      Noah
      further represents and warrant that it will not incur any liability on behalf
      of
      Tegal nor in any way pledge or purport to pledge Tegal’s credit or purport to
      make any contract binding upon Tegal. 

     

    
      	12.  	
              Limited
                Liability

            

    

     

    IN
      NO
      EVENT SHALL TEGAL SHALL BE LIABLE TO NOAH, OR TO ANY PARTY CLAIMING THROUGH
      OR
      UNDER NOAH, FOR ANY LOST PROFITS, LOSS OF DATA, LOSS OF GOODWILL, OR FOR ANY
      INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES OF ANY KIND, EVEN IF
      TEGAL HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, ARISING OUT OF OR
      RELATED TO THE SALE OF PRODUCTS TO OR BY NOAH. TEGAL’S TOTAL CUMULATIVE
      LIABILITY UNDER THIS AGREEMENT EXCEPT FOR AMOUNTS PAYABLE PURSUANT TO ITS
      INDEMNITY OBLIGATIONS UNDER SECTION 13 OR WITH RESPECT TO THE PRODUCTS SHALL
      NOT
      EXCEED THE AMOUNTS PAID BY NOAH TO TEGAL DURING THE 12 MONTHS PRECEDING THE
      CLAIM. Noah acknowledges that the foregoing limitations are an essential element
      of the Agreement between the parties and that in the absence of such limitations
      the pricing and other terms set forth in this Agreement would be substantially
      different. 

     

    
      
        Confidential
          treatment has been requested for portions of this exhibit by Tegal Corporation.
          The copy filed herewith omits the information subject to the confidentiality
          request. Omissions are designated as *****. A complete version of the exhibit
          has been filed seperately with the Securities and Exchange Commission

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	13.  	
              Indemnification

            

    

     

    13.1  Indemnity.
      Tegal
      shall defend Noah against any third party suits, actions, claims or proceedings
      alleging that the Products infringe such third party’s patent rights, copyrights
      or trademarks, or misappropriates such third party’s trade secrets, and Tegal
      agrees to indemnify Noah and hold it harmless from and against any damages
      finally awarded against Noah by a court of competent jurisdiction that may
      result from any such third party claim; provided that (i) Noah notifies Tegal
      promptly in writing of the claim; (ii) Tegal has sole control of the
      defense and all related settlement negotiations; and (iii) Noah provides Tegal
      with all necessary assistance, information, and authority to perform these
      duties. To the extent that any delay by Noah in notifying Tegal results in
      any
      cost, expense, or liability to Tegal which would otherwise have been avoided,
      Tegal shall be relieved of its obligation to indemnify and shall be entitled
      to
      deduct such amount from sums paid or collect such amount from Noah.

     

    13.2  Exclusions.
      Tegal
      shall have no liability for any claim of infringement based on or arising from
      (i) use of any version other than the latest commercially available version
      of the Products made available to Noah, to the extent the infringement would
      have been avoided by use of such version; (ii) modification of the Products
      by Noah or any third party; or (iii) the combination or use of the Products
      furnished hereunder with materials not furnished by Tegal to the extent such
      infringement would have been avoided by use of the Tegal materials
      alone.

     

    13.3  Alternatives.
      In the
      event a Product is held to, or Tegal believes is likely to be held to infringe
      or misappropriate, Tegal shall have the right at its sole option and expense
      to
      (i) substitute or modify the Product so that it is non-infringing, while
      retaining substantially equivalent features and functionality as set forth
      in
      the documentation; or (ii) obtain for Noah a license to continue offering
      the Product under commercially reasonable terms; or (iii) if (i) and (ii)
      are not reasonably practicable as determined by Tegal, terminate this Agreement
      or cease sale of the infringing Product.

     

    13.4  Sole
      Obligation. The
      foregoing Tegal indemnity states the sole obligation and exclusive liability
      of
      Tegal, and Noah’s sole recourse and remedy for any claim of infringement or
      misappropriation of an intellectual property right or proprietary right by
      the
      Products.

     

    
      
        Confidential
          treatment has been requested for portions of this exhibit by Tegal Corporation.
          The copy filed herewith omits the information subject to the confidentiality
          request. Omissions are designated as *****. A complete version of the exhibit
          has been filed seperately with the Securities and Exchange Commission

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	14.  	
              Term
                and Termination

            

    

     

    14.1  Term.
      This
      Agreement shall become effective as the date first shown above and
      shall
      continue for a period of three (3) years thereafter. This Agreement may be
      renewed for additional one year periods solely upon the mutual written agreement
      of the parties. 

     

    14.2  Termination
      for Convenience. Either
      party may terminate this Agreement at any time by written notice given to the
      other party not less than one hundred and eighty (180) days prior to the
      effective date of such termination.

     

    14.3  Termination
      for Cause. Either
      party may terminate this Agreement upon notice to the other party, upon any
      material failure of the other party to fulfill or perform any one of the duties,
      obligations or responsibilities of in this Agreement, which failure is not
      cured
      within thirty (30) days of notice from the party. In addition, Tegal may
      terminate this Agreement upon notice to Noah upon (i) any assignment or
      attempted assignment by Noah of any interest in this Agreement or delegation
      of
      Noah’s obligations without Tegal’s written consent; (ii) any sale, transfer or
      relinquishment, voluntary or involuntary, by operation of law or otherwise,
      of
      any material interest in the direct or indirect ownership or any change in
      the
      management of Noah; (iii) failure of Noah for any reason to function in the
      ordinary course of business; (iv) conviction in a court of competent
      jurisdiction of Noah, or a manager, partner, principal officer or major
      stockholder of Noah for any violation of law tending, in Tegal’s opinion, to
      affect adversely the operation or business of Noah or the good name, goodwill,
      or reputation of Tegal, products of Tegal; or (vi) submission by Noah to Tegal
      of false or fraudulent reports or statements, including, without limitation,
      claims for any refund, credit, rebate, incentive, allowance, discount,
      reimbursement or other payment by Tegal. 

     

    14.4  Effect
      of Termination.
      On
      termination of this Agreement, Noah shall cease to be an authorized distributor
      of Tegal and:

     

    a.  Amounts
      Due. All
      amounts owing by Noah to Tegal shall, notwithstanding prior terms of sale,
      become immediately due and payable.

     

    b.  Unshipped
      Orders.  All
      unshipped confirmed orders shall be fulfilled with the obligations of the
      purchase contract and enforceable on the both parties. Noah and Tegal may come
      to mutual agreement to alter this provision on execution of a
      termination.

     

    c.  Resale
      of Products to Tegal. Noah
      will resell to Tegal on demand, free and clear of liens and encumbrances, all
      Products in Noah’s inventory as Tegal shall elect to repurchase, at a mutually
      agreed price, but not in excess of Tegal’s current price to distributors for
      such products and materials, and deliver to Tegal all materials bearing Tegal’s
      name. Notwithstanding the foregoing, Noah shall be required to deliver to Tegal
      and Tegal shall not be obligated to pay Noah for any item originally provided
      to
      Noah by Tegal free of charge, including, but not limited to Consignment
      Stock.

     

    
      
        Confidential
          treatment has been requested for portions of this exhibit by Tegal Corporation.
          The copy filed herewith omits the information subject to the confidentiality
          request. Omissions are designated as *****. A complete version of the exhibit
          has been filed seperately with the Securities and Exchange Commission

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    d.  No
      Liability Due to Termination. Neither
      party shall be liable to the other because of such termination for compensation,
      reimbursement or damages on account of the loss of prospective profits or
      anticipated sales, or on account of expenditures, investments, lease or
      commitments in connection with the business or goodwill of Tegal or Noah or
      for
      any other reason whatsoever growing out of such
      termination.

     

    e.  Use
      of Materials. Noah
      will cease use of any materials containing any Marks, and will immediately
      destroy all stationery, advertising matter and other printed matter in its
      possession or under its control containing such Marks. Noah will not at any
      time
      after such termination use or permit any such Marks to be used in any manner
      in
      connection with any business conducted by it or in which it may have an
      interest, or otherwise whatsoever as descriptive of or referring to anything
      other than merchandise or products of Tegal. Regardless of the cause of
      termination, Noah will immediately take all appropriate steps to remove and
      cancel its listings in telephone books, and other directories, and public
      records, or elsewhere that contain the Tegal’s name, logos or trademarks. If
      Noah fails to obtain such removals or cancellations promptly, Tegal may make
      application for such removals or cancellations on behalf of Noah and in Noah’s
      name, and in such event Noah will render every assistance required to implement
      the intention of this Section 14.4(e).

     

    f.  Survival. The
      provisions of Sections 4.6, 4.9, 6, 7.3, 8.5, 9, 10, 11, 12, 14.4, 15, 16,
      17,
      18, 19, 20, 21, 22, 23, 24 and 25 shall survive any termination or expiration
      of
      this Agreement.

     

    
      	15.  	
              Compliance
                with Law. 

            

    

     

    15.1  Legal
      Compliance. In
      performing its duties under this Agreement, Noah shall at all times comply
      with
      all applicable international, federal, state and local laws and shall not engage
      in any illegal or unethical practices. Noah agrees that any sums paid to Noah
      under this Agreement are for Noah’s own account, and that except as appropriate
      to carry out Noah’s duties set forth herein in a legal manner, Noah has not, has
      no obligation to and shall not, directly or indirectly, give, offer, pay,
      promise to pay, or authorize the payment of money or any thing of value to
      any
      other person in connection with the transactions for which commissions hereunder
      are to be paid. Noah agrees not to take any actions that would cause it or
      Tegal
      to violate the U.S. Foreign Corrupt Practices Act of 1977, as amended. Noah
      further agrees that no officer, director, employee, or agent of Noah is an
      “official” of any government located within the Territory as that term is
      defined in such Act, nor shall Noah employ any such “official”. Noah agrees that
      Noah shall not download, export, or re-export any software or technical data
      received hereunder, regardless of the manner in which received, (i) into, or
      to
      a national or resident of, any country to which the United States has embargoed
      goods, or (ii) to anyone in the United States Treasury Department’s list of
      Specially Designated Nationals or the U.S. Commerce Department’s Table of Denial
      Orders. Noah shall indemnify and hold Tegal harmless from and against any
      liabilities, damages, costs and expenses, including without limitation
      attorneys’ fees and costs, resulting from any breach by Noah of this Section
      15.

     

    
      
        Confidential
          treatment has been requested for portions of this exhibit by Tegal Corporation.
          The copy filed herewith omits the information subject to the confidentiality
          request. Omissions are designated as *****. A complete version of the exhibit
          has been filed seperately with the Securities and Exchange Commission

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    15.2  Legal
      Obligations. If
      this
      Agreement, any form of contract or license, or any other document, transaction
      or act contemplated herein is required by the law of any nation or other
      jurisdiction within the Territory to be registered, approved, notified, or
      recorded with or by any government agency, Noah shall assume all such legal
      obligations and shall indemnify and hold Tegal harmless from any and all
      liability, damages or expenses, including reasonable attorneys fees, from any
      failure of Noah so to comply. Tegal shall, without limitation, cooperate with
      and assist Noah by furnishing all information reasonably necessary for such
      registration, approval, notification, or recording. Tegal shall have the right,
      at its option, to participate in any such proceeding and to examine prior to
      submission any documents prepared by Noah for submission to any government
      agency, including, without limitation, any correspondence to or from such
      agency. If this Section 15.2 applies in any respect, Noah shall take no other
      action under this Agreement unless and until it has so complied, and Noah shall
      give Tegal prompt written notice when such compliance has been
      completed.

     

    
      	16.  	
              Acknowledgments

            

    

     

    Each
      party acknowledges that no representation or statement, and no understanding
      or
      agreement, has been made, or exists, and that in entering into this Agreement
      each party has not relied on anything done or said or on any presumption in
      fact
      or in law, (i) with respect to this Agreement, or to the duration, termination
      or renewal of this Agreement, or with respect to the relationship between the
      parties, other than as expressly set forth in this Agreement; (ii) that in
      any
      way tends to change or modify the terms of this Agreement or to prevent this
      Agreement from becoming effective; or (iii) that in any way affects or relates
      to the subject matter hereof. Noah also acknowledges that the terms and
      conditions of this Agreement, and each of them, are reasonable and fair and
      equitable.

     

    
      	17.  	
              Final
                Agreement

            

    

     

    This
      Agreement and the Exhibits attached hereto and by this reference incorporated
      herein represent the entire agreement between the parties with respect to the
      subject matter hereof, and supersedes all prior understandings or agreements
      with respect to the subject matter hereof. This Agreement may be modified,
      amended or supplemented only by a further writing that is duly executed by
      both
      parties.

     

    
      	18.  	
              Assignment

            

    

     

    Neither
      this Agreement nor any interest in this Agreement may be assigned by Noah
      without the prior express written approval of Tegal, which may be withheld
      by
      Tegal at Tegal’s absolute discretion. Notwithstanding the foregoing, this
      Agreement is binding upon and shall inure to the benefit of its successors
      and
      assigns. Any assignment in violation of the foregoing shall be null and
      void.

     

    
      
        Confidential
          treatment has been requested for portions of this exhibit by Tegal Corporation.
          The copy filed herewith omits the information subject to the confidentiality
          request. Omissions are designated as *****. A complete version of the exhibit
          has been filed seperately with the Securities and Exchange Commission

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	19.  	
              Force
                Majeure

            

    

     

    Except
      for the obligation to make payment when due, each party shall be excused from
      liability for the failure or delay in performance of any obligation under this
      Agreement by reason of any event beyond such party’s reasonable control
      including but not limited to acts of God, fire, flood, explosion, earthquake,
      or
      other natural forces, war, civil unrest, accident, destruction or other
      casualty, any act, inaction or delay of any government or government agency,
      any
      lack or failure of transportation facilities, any lack or failure of supply
      of
      raw materials, any strike or labor disturbance, or any other event whether
      similar or dissimilar to those enumerated above. Such excuse from liability
      shall be effective only to the extent and duration of the event(s) causing
      the
      failure or delay in performance and provided that the party has not caused
      such
      event(s) to occur. All delivery dates in this Agreement that have been affected
      by force majeure shall be tolled for the duration of such force
      majeure.

     

    
      	20.  	
              No
                Implied Waivers

            

    

     

    The
      failure of a party to insist upon strict performance of any provision of this
      Agreement or to exercise any right arising out of this Agreement neither impairs
      that provision or right nor constitutes a waiver of that provision or right,
      in
      whole or in part, in that instance or in any other instance. Any waiver must
      be
      in writing expressly stated for such purpose and signed by the parties to this
      Agreement.

     

    
      	21.  	
              Notices

            

    

     

    Any
      notice required by this Agreement or given in connection with it, shall be
      in
      writing and shall be given to the appropriate party by personal delivery or
      by
      certified mail, postage prepaid, or recognized overnight delivery services
      as
      set forth below:

     

    If
      to Tegal:

     

    Tegal
      Corporation

    Attn:
      President & CEO

    2201
      S.
      McDowell Blvd.

    Petaluma,
      CA 94954 USA

     

    If
      to Noah:

     

    Noah
      Corporation

    1-19-19
      Ebisu, Shibuya

    Tokyo

    Japan

     

    
      
        Confidential
          treatment has been requested for portions of this exhibit by Tegal Corporation.
          The copy filed herewith omits the information subject to the confidentiality
          request. Omissions are designated as *****. A complete version of the exhibit
          has been filed seperately with the Securities and Exchange Commission

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	22.  	
              Governing
                Law

            

    

     

    The
      rights and obligations of the parties under this Agreement shall not be governed
      by the provisions of the 1980 United Nations Convention on Contracts for the
      International Sale of Goods or the United Nations convention on the Limitation
      Period in the International Sale of Goods, as amended; rather, this Agreement
      shall be governed by and construed under the laws of the State of California,
      USA, without regard to conflicts of law principles. Upon Tegal’s request, Noah
      hereby expressly consents to: (i) the personal jurisdiction of the federal
      and
      state courts within California and (ii) service of process being effected upon
      it by registered mail sent to the address set forth at the beginning of this
      Agreement.

     

    
      	23.  	
              Governing
                Language. 

            

    

     

    The
      official text of this Agreement shall be in the English language, and any
      interpretation or construction of this Agreement shall be based solely on the
      English-language text. 

     

    
      	24.  	
              Severability

            

    

     

    If
      any
      term of this Agreement is held by a court of competent jurisdiction to be
      invalid or unenforceable, then this Agreement, including all of the remaining
      terms, will remain in full force and effect as if such invalid or unenforceable
      term had never been included.

     

    
      	25.  	
              Headings;
                Construction

            

    

     

    The
      headings to the clauses, sub-clause and parts of this Agreement are inserted
      for
      convenience of reference only and are not intended to be part of or to affect
      the meaning or interpretation of this Agreement. Any ambiguity in this Agreement
      shall be interpreted equitably without regard to which party drafted the
      Agreement or any provision thereof. The terms “this Agreement,” “hereof,”
“hereunder” and any similar expressions refer to this Agreement and not to any
      particular Section or other portion hereof. The parties hereto agree that any
      rule of construction to the effect that ambiguities are to be resolved against
      the drafting party will not be applied in the construction or interpretation
      of
      this Agreement. As used in this Agreement, the words “include” and “including,”
and variations thereof, will be deemed to be followed by the words “without
      limitation” and “discretion” means sole discretion.

     

     

    
      
        Confidential
          treatment has been requested for portions of this exhibit by Tegal Corporation.
          The copy filed herewith omits the information subject to the confidentiality
          request. Omissions are designated as *****. A complete version of the exhibit
          has been filed seperately with the Securities and Exchange Commission

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      the
      parties have executed this Agreement as of the date first above
      written.

    

    

    

    Tegal
      Corporation (“Tegal”)

    

    

    By:
      /s/ Thomas R. Mikas_________________________ Date:
      October
      20, 2006

    Thomas
      R.
      Mika, President and CEO

    

    

    

    Noah
      Corporation (“Noah”)

    

    

    

    By:
      /s/
      Hiroshi Tabira___________________________ Date:
      October20,
      2006

      
      Hiroshi
      Tabira, President & CEOexhibit1038.htm

    
Exhibit
      10.38

     

     

    
 

    DISCRETIONARY
      REVOLVING LINE OF CREDIT NOTE

     

     

    
      
        	
                $7,500,000.00

              	
                Louisville,
                  Kentucky

              
	 	
                as
                  of June 29, 2007

              

      

    

     

    FOR
      VALUE RECEIVED, the undersigned, CITIZENS FINANCIAL
      CORPORATION, a Kentucky corporation (“Borrower”),
      having an address of Suite 300, The Marketplace, 12910 Shelbyville Road,
      Louisville, Kentucky 40243, hereby promises and agrees to pay to the order
      of
DARRELL R. WELLS (“Lender”), having an address
      of Suite 310, 4310 Brownsboro Road, Louisville, Kentucky 40207, the principal
      sum of SEVEN MILLION FIVE HUNDRED THOUSAND DOLLARS
      ($7,500,000.00) or so much thereof as may be advanced by Lender to or
      for the account of Borrower (the “Loan”), together with
      interest thereon or on the balance thereof from time to time outstanding, to
      be
      computed as hereinafter provided from the date hereof until the said principal
      sum shall be fully repaid, all without any relief whatever from valuation or
      appraisement laws and with reasonable attorney’s fees, on or before June 30,
      2008 (the “Final Maturity Date”).

     

    NOTWITHSTANDING
      ANYTHING TO THE CONTRARY HEREIN, THE HOLDER OF THIS DISCRETIONARY REVOLVING
      LINE
      OF CREDIT NOTE (THIS “NOTE”) SHALL HAVE THE RIGHT TO REQUIRE REPAYMENT IN FULL
      OF THIS NOTE IN WHOLE OR IN PART AND ALL ACCRUED AND UNPAID INTEREST HEREON
      BY
      GIVING WRITTEN NOTICE TO BORROWER AT THE ADDRESS FIRST SET FORTH ABOVE
      SPECIFYING A DATE FOR REPAYMENT THAT SHALL BE NOT LESS THAN NINETY (90) DAYS
      AFTER THE DATE BORROWER RECEIVES SUCH NOTICE.

     

    This
      Note
      amends, consolidates, restates and replaces the Third Amended, Consolidated
      and
      Restated Promissory Note ($5,630,000.00) dated as of April 2, 2007 made by
      Borrower to the order of Lender (the “Prior
      Note”).  This Note is not intended to be and shall not be
      construed as a novation of the indebtedness evidenced by the Prior
      Note.  This Note shall be entitled to the benefits (in the same
      priority) of, interalia, any security at any time granted and
      pledged by Borrower to Lender in conjunction with the original execution and
      delivery of the Prior Note or predecessor notes or by Borrower or any other
      person at any time thereafter.  This Note also evidences an additional
      loan from Lender to Borrower made on the date hereof in the original principal
      amount of One Hundred Thirty Thousand Dollars ($130,000.00).  As of
      the date hereof, this Note evidences a principal balance disbursed and
      outstanding of Five Million Seven Hundred Sixty Thousand Dollars ($5,760,000.00)
      plus interest accrued under the Prior Note and a predecessor note from and
      after
      April 1, 2007.

     

    Lender
      may make disbursements of the Loan hereunder (“Advances”) from
      time to time in his sole and absolute discretion to or for the account of
      Borrower, including without limitation payments of interest on the
      Loan.  Borrower may borrow, repay in whole or in part without premium
      or penalty, and reborrow hereunder, subject to the terms hereof.

     

    Lender
      shall record in his accounts the date and amount of each Advance and each
      payment on this Note from time to time, which accounts shall be deemed correct
      and complete in the absence of manifest error.

     

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    The
      principal sums actually disbursed and outstanding hereon from time to time
      shall
      bear interest for each calendar quarter (each such calendar quarter, an
“Interest Period”) at a rate per annum equal to the
greater of [i] six percent (6%) or [ii] one percent (1%)
      in excess of
      the Prime Rate as it existed at the opening of business on the first day of
      such
      Interest Period.  The interest rate per annum shall be reset at the
      opening of business on the first day of each Interest Period hereafter (each
      an
“Adjustment Date”) so that for the Interest Period beginning on
      that day the interest rate per annum shall equal the greater
      of [i] six percent (6%) or [ii] one percent (1%) in excess of the
      Prime Rate at the opening of business on that day.  The “Prime
      Rate, as used in this Note, shall mean that rate of interest announced
      from time to time by National City Bank (the “Bank”) to be its
      prime rate at its principal office in Louisville,
      Kentucky, it being understood and agreed that such rate shall not necessarily
      be
      the lowest rate the Bank then offers to its most creditworthy
      borrowers.  As of April 1, 2007, the Prime Rate of the Bank was eight
      and one-quarter percent (8-1/4%), and accordingly the interest rate per annum
      on
      this Note until the first Adjustment Date shall be nine and one-quarter percent
      (9-1/4%).

     

    Principal
      of this Note shall be paid in a single payment on the Final Maturity
      Date.  All accrued and unpaid interest shall be paid on each
      Adjustment Date for the preceding Interest Period and also on the Final Maturity
      Date or any other date on which the principal balance of this Note is paid
      in
      full.  Failure of Lender to make an Advance for the payment of
      interest on this Note shall not relieve Borrower of the obligation to pay
      interest accrued on this Note.

     

    All
      payments of principal and interest and any other sums due under this Note shall
      be made in immediately available funds to Lender at his address set forth above
      in this Note or to such other person or at such other address as may be
      designated in writing by the holder of this Note.  All payments on
      this Note shall be applied first to the payment of any expenses or charges
      payable hereunder, and next to accrued interest, and then to the principal
      balance hereof, or in such other order as Lender may elect in his sole
      discretion.

     

    Any
      payment on this Note that is overdue for more than five (5) days from its due
      date shall, if requested by and at the sole option of the holder of this Note,
      in order to compensate the holder for the inconvenience and administrative
      expense incident to such delinquency and not as a penalty, be increased by
      an
      amount equal to five percent (5%) of the overdue payment, unless such increase
      would exceed the maximum increase permitted by law, in which event the overdue
      payment shall be increased by such lesser increment, if any, as would not exceed
      the maximum increase permitted by law.  The charging or collection of
      a late charge shall not be deemed a waiver of any of the holder’s other rights
      and remedies hereunder, including, if applicable, the right to exercise the
      remedies of the holder upon a default under this Note as hereinafter
      provided.

     

    The
      occurrence of any one or more of the following shall constitute a default under
      this Note:  [i] Borrower does not pay any installment of principal of,
      or interest on, this Note as and when due or within five (5) days thereafter;
      [ii] a proceeding is filed or commenced against Borrower for dissolution or
      liquidation that is not dismissed within sixty (60) days after filing; [iii]
      Borrower becomes insolvent, or a custodian, trustee, liquidator or receiver
      is
      appointed for Borrower or for any of its property, or Borrower makes an
      assignment for the

     

     

     

    
      
        
        

      

      
        2

        
        

      

      
        
        
benefit
        of its creditors, files a petition under bankruptcy, insolvency or debtor’s
        relief law or for any readjustment of indebtedness, composition or extension
        or
        [iv] any such proceeding is filed against Borrower and is not dismissed within
        sixty (60) days).

    

     

    Whenever
      there is a default under this Note, the entire principal balance of and all
      accrued interest on this Note, shall, at the option of Lender, become forthwith
      due and payable, without presentment, notice, protest or demand of any kind
      (all
      of which are expressly waived by Borrower).  Upon any such default,
      the rate of interest applicable to the entire unpaid principal balance of this
      Note shall, at the sole and exclusive option of the holder of this Note, be
      increased by four percent (4%) per annum, unless the resulting rate would exceed
      the maximum rate permitted by law, in which event the rate of interest shall
      be
      increased to a rate that shall not exceed such maximum rate.

     

    This
      Note
      is hereby expressly limited so that in no event whatsoever, whether by reason
      of
      acceleration of the maturity hereof or otherwise, shall the amount paid or
      agreed to be paid to the holder of this Note for the use, forbearance or
      retention of money loaned hereunder exceed the maximum amount permissible under
      applicable law.  If from any circumstance the holder of this Note
      shall ever receive anything of value deemed by applicable law to be interest
      in
      any amount that would exceed the highest lawful rate payable hereunder, an
      amount equal to any excessive interest shall be applied to the reduction of
      the
      principal amount owing hereunder and not to the payment of the interest, and
      if
      the amount that would be excessive interest exceeds the principal balance then
      owing, such excess shall be refunded to the party paying the same.

     

    Failure
      of the holder of this Note to exercise any of its rights and remedies shall
      not
      constitute a waiver of the right to exercise the same at that or any other
      time.  All rights and remedies of the holder for default under this
      Note shall be cumulative to the greatest extent permitted by
      law.  Time shall be of the essence in the payment of all installments
      of interest and principal on this Note and the performance of Borrower’s other
      obligations under this Note.

     

    If
      there
      is any default under this Note, and this Note is placed in the hands of an
      attorney for collection or is collected through any court, including any
      bankruptcy court, Borrower promises to pay to the holder hereof its reasonable
      attorneys’ fees and court costs incurred in collecting or attempting to collect
      or securing or attempting to secure this Note or enforcing the holder’s rights
      in any collateral securing this Note, provided the same is legally allowed
      by
      the laws of the Commonwealth of Kentucky or any state where the collateral
      or
      part thereof is situated.

     

    If
      any
      provision, or portion thereof, of this Note, or the application thereof to
      any
      persons or circumstances shall to any extent be invalid or unenforceable, the
      remainder of this Note, or the application of such provision, or portion
      thereof, to any other person or circumstances shall not be affected thereby,
      and
      each provision of this Note shall be valid and enforceable to the fullest extent
      permitted by law.

     

    This
      Note, including matters of construction, validity and performance, and the
      obligations arising hereunder, shall be construed in accordance with and
      otherwise governed in all respects by the laws of the Commonwealth of Kentucky
      applicable to contracts made and performed in such state and any applicable
      law
      of the United States of America.

     

     

    
      
        
        

      

      
        3

        
        

      

      
        
        

      

    

     

    Borrower
      and any other party who may become primarily or secondarily liable for any
      of
      the obligations of Borrower hereunder hereby jointly and severally waive
      presentment, demand, notice of dishonor, protest, notice of protest, and
      diligence in collection, and further waive all exemptions to which they may
      now
      or hereafter be entitled under the laws of the Commonwealth of Kentucky or
      any
      other state or of the United States, and further agree that the holder of this
      Note shall have the right without notice, to deal in any way, at any time,
      with
      Borrower, or with any other party who may become primarily or secondarily liable
      for, or pledge any collateral as security for, any of the obligations of
      Borrower under this Note and to grant any extension of time for payment of
      this
      Note or any other indulgence or forbearance whatsoever, and may release any
      security for the payment of this Note and/or modify the terms of the
      any other documents securing or pertaining to this Note,
      without in any way affecting the liability of Borrower, or such other party
      who
      may pledge any collateral as security for, or become primarily or secondarily
      liable for, the obligations of Borrower hereunder and without waiving any rights
      the holder may have hereunder or by virtue of the laws of this state or any
      other state of the Unites States.

     

    Borrower
      hereby consents to the jurisdiction of any state or federal court located within
      the County of Jefferson, Commonwealth of Kentucky, and irrevocably agrees that,
      subject to Lender’s sole and absolute election, any case or proceeding relating
      to Title 11 of the United States Code and any actions relating to the
      indebtedness evidenced hereby shall be litigated in such courts, and Borrower
      waives any objection that it may have based on improper venue or forum non
      conveniens to the conduct of any proceeding in any such
      court.  Nothing contained in this paragraph shall affect the right of
      Lender to bring any action or proceeding against Borrower or its property in
      the
      courts of any other jurisdiction.

     

    LENDER
      AND BORROWER ACKNOWLEDGE THAT THE TIME AND EXPENSE REQUIRED FOR TRIAL BY JURY
      EXCEED THE TIME AND EXPENSE REQUIRED FOR A BENCH TRIAL AND HEREBY KNOWINGLY
      AND
      VOLUNTARILY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, AND AFTER HAVING
      CONSULTED OR HAVING HAD AMPLE OPPORTUNITY TO CONSULT THEIR RESPECTIVE LEGAL
      COUNSEL CONCERNING THE CONSEQUENCES OF SUCH WAIVER, TRIAL BY JURY IN ANY ACTION
      OR OTHER PROCEEDING BROUGHT TO ENFORCE OR DEFEND AGAINST COLLECTION OF OR
      OTHERWISE IN CONNECTION WITH THIS NOTE OR ANY RELATED
      DOCUMENTS.

     

    CITIZENS
      FINANCIAL CORPORATION

     

    By:   
      /s/ Len E.
      Schweitzer                       

    Len
      E.
      Schweitzer

    Vice
      President, Accounting, and Chief

     Financial
      Officer

    

    4

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