Document:

Exhibit 10.2

                                     WARRANT

THE SECURITIES EVIDENCED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES  ACT OF  1933,  AS  AMENDED  (THE  "SECURITIES  ACT"),  OR ANY  OTHER
APPLICABLE  SECURITIES  LAWS AND HAVE BEEN ISSUED IN RELIANCE  UPON AN EXEMPTION
FROM  THE  REGISTRATION  REQUIREMENTS  OF THE  SECURITIES  ACT  AND  SUCH  OTHER
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION  HEREIN
MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED, HYPOTHECATED
OR OTHERWISE DISPOSED OF, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES  ACT OR PURSUANT TO A TRANSACTION  WHICH IS EXEMPT FROM, OR
NOT SUBJECT TO, SUCH REGISTRATION.

                                                               February 11, 2004

         Warrant  to  Purchase  up to  300,000  shares of Common  Stock of Tegal
Corporation (the "Company").

         In  consideration  for  Kingsbridge  Capital  Limited (the  "Investor")
agreeing to enter into that certain Common Stock Purchase Agreement, dated as of
the date hereof,  between the Investor  and the Company (the  "Agreement"),  the
Company  hereby agrees that the Investor or any other Warrant Holder (as defined
below) is entitled,  on the terms and  conditions  set forth below,  to purchase
from the Company at any time during the Exercise Period (as defined below) up to
300,000 fully paid and nonassessable shares of common stock, par value $0.01 per
share,  of the Company (the "Common  Stock") at the Exercise Price  (hereinafter
defined),  as the same may be adjusted from time to time pursuant to Section 6.1
hereof.  The resale of the shares of Common Stock or other  securities  issuable
upon  exercise or exchange of this Warrant is subject to the  provisions  of the
Registration Rights Agreement (as defined in the Agreement).

         Section 1. Definitions.

         "Affiliate" shall mean any Person that,  directly or indirectly through
one or more intermediaries,  controls or is controlled by, or is under direct or
indirect  common  control  with  any  other  Person.  For the  purposes  of this
definition,  "control," when used with respect to any Person, means the power to
direct the  management  and  policies of such  Person,  directly or  indirectly,
whether  through the ownership of voting  securities,  by contract or otherwise,
and the term  "controls"  and  "controlled"  have  meanings  correlative  to the
foregoing.

         "Bid Price"  shall mean the closing bid price of the  Company's  Common
Stock as reported by Bloomberg L.P. using the AQR function.

         "Exercise Period" shall mean that period beginning six months after the
date of this Warrant and continuing until the expiration of the five-year period
thereafter.

         "Exercise  Price" as of the date hereof  shall mean one hundred  thirty
percent  (130%) of the average of the Bid Prices over the five (5) Trading  Days
preceding  the  date of this  Warrant,  subject  to  adjustment  for the  events
specified in Section 6.1 below.

         "Per Share  Warrant  Value" shall mean the  difference  resulting  from
subtracting the Exercise Price from the Bid Price on the Trading Day immediately
preceding the Exercise Date.

         "Person" shall mean an  individual,  a  corporation,  a partnership,  a
limited  liability  company,  an  association,   a  trust  or  other  entity  or
organization,  including a government or political  subdivision  or an agency or
instrumentality thereof.

<PAGE>

         "Principal  Market" shall mean the Nasdaq National  Market,  the Nasdaq
SmallCap  Market,  the American Stock  Exchange or the New York Stock  Exchange,
whichever is at the time the principal trading exchange or market for the Common
Stock.

         "SEC" shall mean the United States Securities and Exchange Commission.

         "Trading  Day" shall mean any day other than a Saturday  or a Sunday on
which the Principal Market is open for trading in equity securities.

         "Warrant  Holder" shall mean the Investor or any assignee or transferee
of all or any portion of this Warrant.

         "Warrant  Shares" shall mean those shares of Common Stock received upon
exercise of this Warrant.

         Section 2. Exercise.

              (a) Method of Exercise.  This Warrant may be exercised in whole or
in part (but not as to a fractional share of Common Stock), at any time and from
time to time during the Exercise Period,  by the Warrant Holder by (i) surrender
of this  Warrant,  with  the form of  exercise  attached  hereto  as  Exhibit  A
completed and duly executed by the Warrant  Holder (the "Exercise  Notice"),  to
the  Company at the  address  set forth in Section  13  hereof,  accompanied  by
payment of the Exercise Price multiplied by the number of shares of Common Stock
for which this Warrant is being  exercised (the "Aggregate  Exercise  Price") or
(ii)  telecopying an executed and completed  Exercise  Notice to the Company and
delivering to the Company within five (5) business days  thereafter the original
Exercise  Notice,  this Warrant and the Aggregate  Exercise Price.  Each date on
which an Exercise  Notice is received by the Company in  accordance  with clause
(i) and each date on which the Exercise  Notice is  telecopied to the Company in
accordance with clause (ii) above shall be deemed an "Exercise Date."

              (b) Payment of Aggregate Exercise Price.  Subject to paragraph (c)
below, payment of the Aggregate Exercise Price shall be made by wire transfer of
immediately  available  funds to an account  designated  by the Company.  If the
amount  of the  payment  received  by the  Company  is less  than the  Aggregate
Exercise Price,  the Warrant Holder will be notified of the deficiency and shall
make  payment in that amount  within  three (3) Trading  Days.  In the event the
payment exceeds the Aggregate Exercise Price, the Company will refund the excess
to the Warrant Holder within five (5) Trading Days of receipt.

              (c) Cashless Exercise.  In the event that the Warrant Shares to be
received  by the Warrant  Holder upon  exercise of the Warrant may not be resold
pursuant  to  an  effective  registration  statement  or  an  exemption  to  the
registration  requirements  of the  Securities  Act of  1933,  as  amended,  and
applicable  state laws,  the Warrant Holder may, as an alternative to payment of
the Aggregate  Exercise  Price upon exercise in  accordance  with  paragraph (b)
above,  elect to effect a cashless  exercise by so  indicating  on the  Exercise
Notice and including a calculation of the number of shares of Common Stock to be
issued  upon such  exercise in  accordance  with the terms  hereof (a  "Cashless
Exercise").  In the event of a  Cashless  Exercise,  the  Warrant  Holder  shall
receive that number of shares of Common Stock  determined by (i) multiplying the
number of Warrant  Shares for which this  Warrant is being  exercised by the Per
Share  Warrant  Value  and (ii)  dividing  the  product  by the Bid Price on the
Trading Day  immediately  preceding  the Exercise  Date,  rounded to the nearest
whole share.  The Company shall cancel the total number of Warrant  Shares equal
to the excess of the  number of the  Warrant  Shares  for which this  Warrant is
being  exercised over the number of Warrant Shares to be received by the Warrant
Holder pursuant to such Cashless Exercise.

<PAGE>

              (d)  Replacement  Warrant.  In the event  that the  Warrant is not
exercised in full,  the number of Warrant  Shares shall be reduced by the number
of such Warrant Shares for which this Warrant is exercised,  and the Company, at
its  expense,  shall  forthwith  issue and  deliver  to or upon the order of the
Warrant  Holder a new Warrant of like tenor in the name of the  Warrant  Holder,
reflecting such adjusted number of Warrant Shares.

         Section 3. Ten Percent Limitation.  The Warrant Holder may not exercise
this Warrant such that the number of Warrant  Shares to be received  pursuant to
such exercise aggregated with all other shares of Common Stock then owned by the
Warrant Holder  beneficially or deemed  beneficially owned by the Warrant Holder
would result in the Warrant  Holder  owning more than 9.9% of all of such Common
Stock as would be outstanding on such Exercise Date, as determined in accordance
with Section  13(d) of the  Exchange  Act of 1934 and the rules and  regulations
promulgated thereunder.

         Section 4. Delivery of Stock Certificates.

                  (a) Subject to the terms and  conditions of this  Warrant,  as
soon as  practicable  after the exercise of this Warrant in full or in part, and
in any event within ten (10) Trading Days thereafter, the Company at its expense
(including, without limitation, the payment by it of any applicable issue taxes)
will cause to be issued in the name of and delivered to the Warrant  Holder,  or
as the Warrant Holder may lawfully direct, a certificate or certificates for the
number of validly issued, fully paid and non-assessable  Warrant Shares to which
the Warrant Holder shall be entitled on such  exercise,  together with any other
stock or other  securities or property  (including  cash,  where  applicable) to
which the Warrant  Holder is entitled upon such exercise in accordance  with the
provisions hereof.

                  (b) This Warrant may not be exercised as to fractional  shares
of Common Stock.  In the event that the exercise of this Warrant,  in full or in
part, would result in the issuance of any fractional share of Common Stock, then
in such event the Warrant  Holder shall receive the number of shares  rounded to
the nearest whole share.

         Section 5. Representations, Warranties and Covenants of the Company.

                  (a) The Warrant  Shares,  when issued in  accordance  with the
terms hereof, will be duly authorized and, when paid for or issued in accordance
with the terms hereof, shall be validly issued, fully paid and non-assessable.

                  (b) The Company shall take all commercially  reasonable action
and  proceedings  as may be required and permitted by  applicable  law, rule and
regulation  for the legal and valid  issuance  of this  Warrant  and the Warrant
Shares to the Warrant Holder.

                  (c) The Company has  authorized  and  reserved for issuance to
the Warrant  Holder the requisite  number of shares of Common Stock to be issued
pursuant  to this  Warrant.  The  Company  shall at all times  reserve  and keep
available,  solely for issuance and delivery as Warrant Shares  hereunder,  such
shares of Common Stock as shall from time to time be issuable as Warrant Shares.

                  (d) From the date  hereof  through the last date on which this
Warrant is exercisable, the Company shall take all steps commercially reasonable
to ensure  that the  Common  Stock  remains  listed  or quoted on the  Principal
Market.

         Section 6.1.  Adjustment of the Exercise Price. The Exercise Price and,
accordingly, the number of Warrant Shares issuable upon exercise of the Warrant,
shall be subject to  adjustment  from time to time upon the happening of certain
events as follows:

                  (a) Reclassification,  Consolidation,  Merger, Mandatory Share
Exchange, Sale or Transfer.

<PAGE>

                  (i)  Upon  occurrence  of  any  of  the  events  specified  in
subsection  (a)(ii)  below  (the  "Adjustment  Events")  while  this  Warrant is
unexpired  and not  exercised  in  full,  the  Warrant  Holder  may in its  sole
discretion require the Company, or any successor or purchasing  corporation,  as
the case may be, without payment of any additional  consideration  therefor,  to
execute  and  deliver to the Warrant  Holder a new  Warrant  providing  that the
Warrant Holder shall have the right to exercise such new Warrant (upon terms not
less favorable to the Warrant Holder than those then applicable to this Warrant)
and to  receive  upon  such  exercise,  in lieu of each  share of  Common  Stock
theretofore  issuable  upon  exercise  of this  Warrant,  the kind and amount of
shares  of stock,  other  securities,  money or  property  receivable  upon such
Adjustment  Event by the  holder  of one  share of Common  Stock  issuable  upon
exercise of this Warrant had this Warrant been  exercised  immediately  prior to
such Adjustment Event. Such new Warrant shall provide for adjustments that shall
be as nearly equivalent as may be practicable to the adjustments provided for in
this Section 6.1.

                  (ii) The Adjustment  Events shall be (1) any  reclassification
or change of Common  Stock (other than a change in par value or as a result of a
subdivision or combination of Common Stock),  (2) any  consolidation,  merger or
mandatory share exchange of the Company with or into another  corporation (other
than a merger or mandatory share exchange with another  corporation in which the
Company  is  a  continuing   corporation  and  which  does  not  result  in  any
reclassification  or change other than a change in par value or as a result of a
subdivision or  combination  of Common  Stock),  and (3) any sale or transfer to
another corporation of all or substantially all of the assets of the Company.

                  (iii) If the  Company  shall fail to  maintain  the listing or
quotation of the Common Stock on a Principal  Market,  the Warrant Holder may in
its sole discretion at any time thereafter require any publicly traded Affiliate
of  the  Company,  without  payment  by the  Warrant  Holder  of any  additional
consideration  therefor,  to execute  and  deliver to the  Warrant  Holder a new
Warrant  providing that the Warrant Holder shall have the right to exercise such
new  Warrant  (in an amount and upon  terms not less  favorable  to the  Warrant
Holder than those then  applicable  to this  Warrant)  and to receive  upon such
exercise,  in lieu of each  share of  Common  Stock  theretofore  issuable  upon
exercise  of this  Warrant,  publicly  traded  shares  of  common  stock of such
Affiliate.

                  The provisions of this subsection (a) shall similarly apply to
successive reclassifications,  changes, consolidations, mergers, mandatory share
exchanges, sales and transfers.

                  (b) Subdivision or Combination of Shares.  If the Company,  at
any time while this  Warrant  is  unexpired  and not  exercised  in full,  shall
subdivide its Common Stock, the Exercise Price shall be proportionately  reduced
as of the effective  date of such  subdivision,  or, if the Company shall take a
record of holders of its Common Stock for the purpose of so  subdividing,  as of
such record date,  whichever is earlier.  If the Company, at any time while this
Warrant is unexpired and not exercised in full,  shall combine its Common Stock,
the Exercise Price shall be  proportionately  increased as of the effective date
of such  combination,  or, if the Company  shall take a record of holders of its
Common Stock for the purpose of so combining,  as of such record date, whichever
is earlier.

                  (c) Stock  Dividends.  If the Company,  at any time while this
Warrant is unexpired  and not  exercised in full,  shall pay a dividend or other
distribution in shares of Common Stock to all holders of Common Stock,  then the
Exercise Price shall be adjusted, as of the date the Company shall take a record
of the holders of its Common Stock for the purpose of receiving such dividend or
other  distribution  (or if no such  record  is  taken,  as at the  date of such
payment or other  distribution),  to that price  determined by  multiplying  the
Exercise Price in effect immediately prior to such payment or other distribution
by a fraction:

                  1. the  numerator of which shall be the total number of shares
of Common Stock outstanding  immediately prior to such dividend or distribution,
and

                  2. the  denominator  of which  shall be the  total  number  of
shares  of  Common  Stock   outstanding   immediately  after  such  dividend  or
distribution.

<PAGE>

                  The  provisions of this  subsection  (c) shall not apply under
any of the  circumstances for which an adjustment is provided in subsections (a)
or (b).

                  (d) Liquidating  Dividends,  Etc. If the Company,  at any time
while this Warrant is unexpired and not exercised in full,  makes a distribution
of its assets or evidences of indebtedness to the holders of its Common Stock as
a  dividend  in  liquidation  or by way of return of  capital or other than as a
dividend  payable out of earnings or surplus  legally  available  for  dividends
under  applicable law or any distribution to such holders made in respect of the
sale of all or  substantially  all of the Company's assets (other than under the
circumstances  provided for in the foregoing  subsections (a) through (c)), then
the Warrant Holder shall be entitled to receive upon exercise of this Warrant in
addition to the Warrant Shares receivable in connection  therewith,  and without
payment of any consideration  other than the Exercise Price, the kind and amount
of such  distribution  per share of Common  Stock  multiplied  by the  number of
Warrant Shares that, on the record date for such distribution, are issuable upon
such exercise of the Warrant (with no further  adjustment  being made  following
any event which causes a subsequent  adjustment in the number of Warrant  Shares
issuable),  and an  appropriate  provision  therefor shall be made a part of any
such  distribution.  The value of a distribution that is paid in other than cash
shall be determined in good faith by the Board of Directors of the Company.

                  Section  6.2  No  Adjustments  Under  Certain   Circumstances.
Notwithstanding anything contained in the foregoing to the contrary, there shall
be no adjustment to the Exercise  Price based upon,  related to or in connection
with any  instrument  or other  benefit  issued or  conferred by the Company (a)
under any of its employee or director  stock award  plans,  employee or director
stock  compensation  plans or employee or director  stock  purchase plans or (b)
with  respect  to the  granting  of  stock  or  stock  options  to  advisors  or
consultants  engaged by the Company,  but only if such grant is in consideration
for services rendered or to be rendered and not for capital raising purposes.

                  Section 6.3 Notice of Adjustments. Whenever the Exercise Price
or number of Warrant  Shares  shall be adjusted  pursuant to Section 6.1 hereof,
the Company  shall  promptly  prepare a  certificate  signed by its President or
Chief Financial  Officer setting forth in reasonable  detail the event requiring
the  adjustment,  the  amount  of the  adjustment,  the  method  by  which  such
adjustment  was  calculated  (including a description  of the basis on which the
Company's Board of Directors made any determination hereunder), and the Exercise
Price and number of Warrant  Shares  purchasable  at that  Exercise  Price after
giving  effect to such  adjustment,  and  shall  promptly  cause  copies of such
certificate to be sent by overnight  courier to the Warrant Holder. In the event
the Company shall, at a time while the Warrant is unexpired and not exercised in
full,  take any action that pursuant to  subsections  (a) through (c) of Section
6.1 may result in an adjustment of the Exercise Price, the Company shall give to
the Warrant  Holder at its last address known to the Company  written  notice of
such action ten (10) days in advance of its effective date in order to afford to
the Warrant  Holder an  opportunity to exercise the Warrant prior to such action
becoming effective.

                  Section 7. No  Impairment.  The Company will not, by amendment
of its Certificate of  Incorporation  or By-Laws or through any  reorganization,
transfer  of  assets,  consolidation,  merger,  dissolution  or issue or sale of
securities,  avoid or seek to avoid the  observance or performance of any of the
terms  of this  Warrant,  but  will at all  times in good  faith  assist  in the
carrying  out of all such terms and in the  taking of all such  action as may be
necessary or  appropriate  in order to protect the rights of the Warrant  Holder
against  impairment.  Without  limiting the  generality  of the  foregoing,  the
Company  (a) will not  increase  the par value of any Warrant  Shares  above the
amount payable  therefor on such exercise,  and (b) will take all such action as
may be reasonably necessary or appropriate in order that the Company may validly
and legally issue fully paid and nonassessable Warrant Shares on the exercise of
this Warrant.

<PAGE>

                  Section  8.  Rights  As  Stockholder.  Except  as set forth in
Section 6.1 above,  prior to exercise of this Warrant,  the Warrant Holder shall
not be entitled to any rights as a  stockholder  of the Company  with respect to
the  Warrant  Shares,  including  (without  limitation)  the  right to vote such
shares,  receive  dividends  or other  distributions  thereon or be  notified of
stockholder  meetings.  However,  in the event of any taking by the Company of a
record of the holders of any class of securities  for the purpose of determining
the holders  thereof who are entitled to receive any dividend (other than a cash
dividend)  or other  distribution,  any  right to  subscribe  for,  purchase  or
otherwise  acquire any shares of stock of any class or any other  securities  or
property,  or to receive any other right, the Company shall mail to each Warrant
Holder,  at least ten (10) days prior to the date  specified  therein,  a notice
specifying  the date on which any such  record is to be taken for the purpose of
such  dividend,  distribution  or right,  and the amount and  character  of such
dividend, distribution or right.

              Section 9.  Replacement  of  Warrant.  Upon  receipt  of  evidence
reasonably  satisfactory  to the  Company  of the loss,  theft,  destruction  or
mutilation  of the  Warrant  and,  in  the  case  of any  such  loss,  theft  or
destruction of the Warrant,  upon delivery of an indemnity agreement or security
reasonably satisfactory in form and amount to the Company or, in the case of any
such mutilation,  on surrender and cancellation of such Warrant,  the Company at
its expense  will execute and deliver,  in lieu  thereof,  a new Warrant of like
tenor.

              Section 10. Choice of Law.  This Warrant shall be construed  under
the laws of the State of New York.

              Section 11. Entire Agreement;  Amendments.  Except for any written
instrument  concurrent or subsequent to the date hereof  executed by the Company
and  the  Investor,   this  Warrant  and  the   Agreement   contain  the  entire
understanding  of the parties  with  respect to the matters  covered  hereby and
thereby.  No provision of this Warrant may be waived or amended  other than by a
written  instrument  signed by the party  against whom  enforcement  of any such
amendment or waiver is sought.

              Section 12. Restricted Securities.

              (a)  Registration  or  Exemption  Required.  This Warrant has been
issued  in a  transaction  exempt  from  the  registration  requirements  of the
Securities  Act of 1933, as amended,  in reliance upon the provisions of Section
4(2) thereof. This Warrant and the Warrant Shares issuable upon exercise of this
Warrant may not be resold except pursuant to an effective registration statement
or an exemption to the  registration  requirements of the Securities Act of 1933
and applicable state laws.

              (b) Legend. Any replacement  Warrants issued pursuant to Section 2
and Section 9 hereof and,  unless a  registration  statement  has been  declared
effective by the SEC in accordance  with the Securities Act of 1933, as amended,
with respect thereto, any Warrant Shares issued upon exercise hereof, shall bear
the following legend:

                  "THE SECURITIES  EVIDENCED BY THIS  CERTIFICATE  HAVE NOT BEEN
                  REGISTERED  UNDER THE U.S.  SECURITIES ACT OF 1933, AS AMENDED
                  (THE  "SECURITIES  ACT"), OR ANY OTHER  APPLICABLE  SECURITIES
                  LAWS AND HAVE BEEN ISSUED IN RELIANCE  UPON AN EXEMPTION  FROM
                  THE  REGISTRATION  REQUIREMENTS OF THE SECURITIES ACT AND SUCH
                  OTHER SECURITIES LAWS.  NEITHER THIS SECURITY NOR ANY INTEREST
                  OR  PARTICIPATION  HEREIN MAY BE  REOFFERED,  SOLD,  ASSIGNED,
                  TRANSFERRED,  PLEDGED,  ENCUMBERED,  HYPOTHECATED OR OTHERWISE
                  DISPOSED  OF,  EXCEPT  PURSUANT TO AN  EFFECTIVE  REGISTRATION
                  STATEMENT   UNDER  THE   SECURITIES   ACT  OR  PURSUANT  TO  A
                  TRANSACTION  WHICH IS EXEMPT  FROM,  OR NOT  SUBJECT  TO, SUCH
                  REGISTRATION."

<PAGE>

                  (c) No Other Legend or Stock Transfer Restrictions.  No legend
other than the one specified in Section 12(b) has been or shall be placed on the
share certificates  representing the Warrant Shares and no instructions or "stop
transfer orders" (so called "stock transfer restrictions") or other restrictions
have been or shall be given to the Company's transfer agent with respect thereto
other than as expressly set forth in this Section 12.

                  (d) Assignment. Assuming the conditions of Section 12(a) above
regarding registration or exemption have been satisfied,  the Warrant Holder may
sell, transfer, assign, pledge or otherwise dispose of this Warrant, in whole or
in part.  The  Warrant  Holder  shall  deliver  a  written  notice  to  Company,
substantially  in the form of the  Assignment  attached  hereto  as  Exhibit  B,
indicating  the person or persons to whom the Warrant  shall be assigned and the
respective number of warrants to be assigned to each assignee. The Company shall
effect the assignment within ten (10) days, and shall deliver to the assignee(s)
designated  by the Warrant  Holder a Warrant or Warrants of like tenor and terms
for the appropriate number of shares.

                  (e)  Investor's  Compliance.  Nothing in this Section 12 shall
affect in any way the Investor's  obligations under any agreement to comply with
all applicable securities laws upon resale of the Common Stock.

                  Section 13. Notices. All notices, demands, requests, consents,
approvals,  and other communications required or permitted hereunder shall be in
writing  and  shall  be (i)  personally  served,  (ii)  deposited  in the  mail,
registered  or certified,  return  receipt  requested,  postage  prepaid,  (iii)
delivered  by  reputable  air courier  service  with  charges  prepaid,  or (iv)
transmitted  by hand  delivery,  telegram or  facsimile,  addressed as set forth
below or to such other address as such party shall have  specified most recently
by written notice. Any notice or other communication required or permitted to be
given hereunder shall be deemed  effective (a) upon hand delivery or delivery by
facsimile (with accurate  confirmation  generated by the transmitting  facsimile
machine) at the address or number  designated  below (if delivered on a business
day during normal  business  hours where such notice is to be received),  or the
first  business  day  following  such  delivery  (if  delivered  other than on a
business day during normal  business  hours where such notice is to be received)
or (b) on the  second  business  day  following  the date of  mailing by express
courier  service,  fully  prepaid,  addressed  to such  address,  or upon actual
receipt of such  mailing,  whichever  shall first occur.  The addresses for such
communications shall be:

                  If to the Company:

                  Tegal Corporation
                  2201 South McDowell Blvd.
                  Petaluma, California  94954
                  Telephone:  (707) 763-5600
                  Facsimile:  (415) 395-8095
                  Attention:  Chief Financial Officer

with a copy (which shall not constitute notice) to:

                  Scott Willoughby, Esq.
                  Latham & Watkins LLP
                  505 Montgomery Street #1900
                  San Francisco, CA 94111
                  Telephone:  (415) 646 8345
                  Facsimile:  (415) 395 8095

if to the Investor:

<PAGE>

                  Kingsbridge Capital Limited c/o Kingsbridge Corporate Services
                  Limited
                  Main Street
                  Kilcullen, County Kildare
                  Republic of Ireland
                  Telephone:        011-353-45-481-811
                  Facsimile:        011-353-45-482-003
                  Attention:        Adam Gurney, Director

with a copy (which shall not constitute notice) to:

                  Clifford Chance US LLP
                  200 Park Avenue
                  New York, NY  10166
                  Telephone:  (212) 878-8000
                  Facsimile:  (212) 878-8375
                  Attention:  Keith M. Andruschak, Esq.

                  Either  party  hereto may from time to time change its address
or  facsimile  number for notices  under this  Section 13 by giving at least ten
(10) days prior written  notice of such changed  address or facsimile  number to
the other party hereto.

                  Section 14.  Miscellaneous.  This  Warrant and any term hereof
may be changed,  waived,  discharged  or  terminated  only by an  instrument  in
writing signed by the party against which  enforcement  of such change,  waiver,
discharge  or  termination  is sought.  The  headings  in this  Warrant  are for
purposes of reference  only, and shall not limit or otherwise  affect any of the
terms hereof. The invalidity or  unenforceability  of any provision hereof shall
in no way affect the validity or enforceability of any other provision.

                  IN WITNESS  WHEREOF,  this  Warrant  was duly  executed by the
undersigned, thereunto duly authorized, as of the date first set forth above.

TEGAL CORPORATION

By: /s/ Thomas R. Mika
    ----------------------------------------
    Thomas R. Mika
    Executive Vice President and Chief Financial Officer

<PAGE>

                            EXHIBIT A TO THE WARRANT

                                  EXERCISE FORM

                                TEGAL CORPORATION

         The  undersigned  hereby  irrevocably  exercises  the right to purchase
__________________  shares  of Common  Stock of Tegal  Corporation,  a  Delaware
corporation,  evidenced by the attached Warrant, and (CIRCLE EITHER (i) or (ii))
(i) tenders  herewith  payment of the Aggregate  Exercise  Price with respect to
such  shares in full,  in the amount of  $________,  in cash,  by  certified  or
official  bank check or by wire  transfer for the account of the Company or (ii)
elects,  pursuant to Section 2(c) of the  Warrant,  to convert such Warrant into
shares of Common Stock of Tegal Corporation on a cashless exercise basis, all in
accordance with the conditions and provisions of said Warrant.

         The  undersigned  requests  that stock  certificates  for such  Warrant
Shares be issued, and a Warrant  representing any unexercised  portion hereof be
issued,  pursuant to this Warrant,  in the name of the registered Warrant Holder
and delivered to the undersigned at the address set forth below.

Dated:______________________________________

---------------------------------------------
Signature of Registered Holder
Name of Registered Holder (Print)

---------------------------------------------
Address

<PAGE>

                            EXHIBIT B TO THE WARRANT
                                   ASSIGNMENT

         (To be executed by the registered  Warrant Holder  desiring to transfer
the Warrant)

         FOR VALUED  RECEIVED,  the  undersigned  Warrant Holder of the attached
Warrant  hereby sells,  assigns and  transfers  unto the persons below named the
right to purchase  ______________  shares of Common  Stock of Tegal  Corporation
evidenced by the attached  Warrant and does hereby  irrevocably  constitute  and
appoint  ______________________  attorney  to transfer  the said  Warrant on the
books of the Company, with full power of substitution in the premises.

Dated:

------------------------------
Signature

Fill in for new Registration of Warrant:

-----------------------------------------
Name

-----------------------------------------
Address

-----------------------------------------
Please print name and address of assignee
(including zip code number)Exhibit 10.3

                          REGISTRATION RIGHTS AGREEMENT

         This  REGISTRATION  RIGHTS  AGREEMENT (this  "Agreement"),  dated as of
February 11, 2004,  is by and between  TEGAL  CORPORATION  (the  "Company")  and
KINGSBRIDGE CAPITAL LIMITED (the "Investor").

         WHEREAS,  the Company and the Investor are  concurrently  entering into
that certain Common Stock Purchase  Agreement,  dated as of the date hereof (the
"Purchase  Agreement"),  pursuant to which the  Company may issue,  from time to
time, to the Investor up to $25 million worth (as determined in accordance  with
the Purchase Agreement) of Common Stock;

         WHEREAS, pursuant to the terms of, and in partial consideration for the
Investor  entering into,  the Purchase  Agreement,  the Company is  concurrently
issuing to the Investor a warrant, exercisable from time to time within five (5)
years  following  the  six-month  anniversary  of  the  date  of  issuance  (the
"Warrant")  for the purchase of an  aggregate of up to 300,000  shares of Common
Stock at a price specified in such Warrant;

         WHEREAS,  pursuant to the terms of, and in partial  consideration  for,
the Investor's  agreement to enter into the Purchase  Agreement,  the Company is
required to provide the Investor with certain  registration  rights with respect
to the  Registrable  Securities  (as defined in the Purchase  Agreement)  as set
forth herein;

         NOW, THEREFORE,  in consideration of the premises, the representations,
warranties,  covenants and agreements  contained herein, in the Warrant,  and in
the  Purchase  Agreement,  and for other good and  valuable  consideration,  the
receipt and sufficiency of which is hereby acknowledged, intending to be legally
bound hereby, the parties hereto agree as follows (capitalized terms used herein
and not defined  herein shall have the respective  meanings  ascribed to them in
the Purchase Agreement):

                                    ARTICLE I
                               REGISTRATION RIGHTS

Section 1.1. REGISTRATION STATEMENT.

                  (a) Filing of the Registration  Statement.  Upon the terms and
subject to the  conditions set forth in this  Agreement,  the Company shall file
with the  Commission  within ten (10) Trading Days  following the Closing Date a
registration  statement on Form S-3 under the  Securities Act or such other form
as deemed  appropriate  by counsel to the Company for the  registration  for the
resale  by  the  Investor  of  the  Registrable  Securities  (the  "Registration
Statement").

                  (b) Effectiveness of the Registration  Statement.  The Company
shall use commercially reasonable efforts (i) to have the Registration Statement
declared effective by the Commission as soon as reasonably  practicable,  but in
any event no later than  forty-five  (45) calendar  days, or one hundred  twenty
(120)  calendar days in the event that the Commission  reviews the  Registration
Statement,  following the Closing Date and (ii) to ensure that the  Registration
Statement  remains in effect  throughout the term of this Agreement as set forth
in Section 4.2, subject to the terms and conditions of this Agreement.

                  (c) Regulatory Disapproval.  Notwithstanding the provisions of
Sections  1.1(b),  the date by which a  Registration  Statement  is  required to
become  effective  shall be  extended  without  default  or  liquidated  damages
hereunder  or under  the  Purchase  Agreement  in the event  that the  Company's
failure to obtain the  effectiveness of the  Registration  Statement on a timely
basis results solely from the  Commission's  disapproval of the structure of the
transactions  contemplated by the Purchase Agreement. In such event, the parties
agree to  cooperate  with one  another in good  faith to arrive at a  resolution
acceptable to the Commission;  provided, however, that nothing contained in this
Section  1.1(c)  shall  relieve the Company  from its  obligation  to effect and
maintain the registration of the Warrant Shares on a timely basis.

<PAGE>

                  (d)  Failure  to  Maintain   Effectiveness   of   Registration
Statement.  In the event the Company fails to maintain the  effectiveness of the
Registration  Statement (or the  Prospectus)  throughout the period set forth in
Section 4.2,  other than temporary  suspensions as set forth in Section  1.1(e),
and the Investor holds any Registrable  Securities at any time during the period
of such ineffectiveness (an "Ineffective  Period"), the Company shall pay to the
Investor  in  immediately  available  funds  into an account  designated  by the
Investor an amount equal to the product of (x) the total  number of  Registrable
Securities issued to the Investor under the Purchase  Agreement and owned by the
Investor  at any time  during such  Ineffective  Period and (y) the  result,  if
greater  than  zero,  obtained  by  subtracting  the  VWAP  on the  Trading  Day
immediately  following the last day of such Ineffective  Period from the VWAP on
the  Trading Day  immediately  preceding  the day on which any such  Ineffective
Period began; provided,  however, that the foregoing payments shall not apply in
respect of  Registrable  Securities  that are otherwise  freely  tradable by the
Investor.

                  (e)  Deferral  or   Suspension   During  a  Blackout   Period.
Notwithstanding  the provisions of Section 1.1(d), if in the good faith judgment
of  the  Company,  following  consultation  with  legal  counsel,  it  would  be
detrimental to the Company or its stockholders for the Registration Statement to
be filed or for resales of  Registrable  Securities  to be made  pursuant to the
Registration  Statement  due to (i) the existence of a material  development  or
potential material  development  involving the Company that the Company would be
obligated to disclose in the Registration  Statement,  which disclosure would be
premature or otherwise inadvisable at such time or would have a Material Adverse
Effect  on  the   Company   or  its   stockholders,   or  (ii)  a  filing  of  a
Company-initiated  registration of any class of its equity securities, which, in
the good  faith  judgment  of the  Company,  would  adversely  effect or require
premature  disclosure  of the  filing  of  such  Company-initiated  registration
(notice thereof, a "Blackout  Notice"),  the Company shall have the right to (A)
immediately  defer  such  filing  for a period of not more than  sixty (60) days
beyond the date by which such  Registration  Statement  was  otherwise  required
hereunder to be filed or (B) suspend use of such  Registration  Statement  for a
period of not more than  thirty  (30) days  (any  such  deferral  or  suspension
period,  a  "Blackout  Period").  The  Investor  acknowledges  that it  would be
seriously  detrimental to the Company and its stockholders for such Registration
Statement  to be filed (or  remain  in  effect)  during a  Blackout  Period  and
therefore  essential  to defer such filing (or suspend the use  thereof)  during
such  Blackout  Period and agrees to cease any  disposition  of the  Registrable
Securities  during such Blackout Period.  The Company may not utilize any of its
rights under this Section 1.1(e) to defer the filing of a Registration Statement
(or suspend its effectiveness)  more than twice in any twelve (12) month period.
In the event that,  within sixty (60)  calendar days  following  any  Settlement
Date, the Company gives a Blackout  Notice to the Investor of a Blackout  Period
and the VWAP on the Trading Day immediately preceding such Blackout Period ("Old
VWAP") is greater than the VWAP on the first Trading Day following such Blackout
Period that the  Investor  may sell its  Registrable  Securities  pursuant to an
effective  Registration  Statement ("New VWAP"),  then the Company shall either:
(X) issue to the  Investor  the  number  of  additional  shares of Common  Stock
("Blackout Shares") equal to one hundred twenty percent (120%) of the difference
between (1) the product of the number of Registrable Securities purchased by the
Investor  during the  preceding  sixty  (60)  calendar  days under the  Purchase
Agreement and actually held by Investor immediately prior to the Blackout Period
multiplied  by the Old  VWAP,  divided  by the New VWAP,  and (2) the  number of
Registrable  Securities  purchased by the Investor under the Purchase  Agreement
during the  preceding  sixty (60)  calendar  days and actually  held by Investor
immediately  prior to the  Blackout  Period or (Y) pay to the Investor an amount
equal to the product of (1) the number of  Registrable  Securities  purchased by
the  Investor  under the  Purchase  Agreement  during the  preceding  sixty (60)
calendar  days and actually held by Investor  immediately  prior to the Blackout
Period  and (2) the result  obtained  by  subtracting  the New VWAP from the Old
VWAP.

                                       2
<PAGE>

                  (f) Liquidated  Damages.  The Company and the Investor  hereto
acknowledge  and agree that the amounts payable under Sections 1.1(d) and 1.1(e)
and the Blackout Shares  deliverable under Section 1.1(e) above shall constitute
liquidated damages and not penalties.  The parties further  acknowledge that (i)
the amount of loss or damages likely to be incurred by the Investor is incapable
or is  difficult  to  precisely  estimate,  (ii) the amounts  specified  in such
sections  bear  a  reasonable   proportion   and  are  not  plainly  or  grossly
disproportionate  to the probable loss likely to be incurred in connection  with
any  failure  by the  Company to obtain or  maintain  the  effectiveness  of the
Registration  Statement,  (iii)  one of the  reasons  for  the  Company  and the
Investor  reaching an agreement as to such amounts was the  uncertainty and cost
of litigation regarding the question of actual damages, and (iv) the Company and
the Investor are  sophisticated  business  parties and have been  represented by
sophisticated and able legal and financial counsel and negotiated this Agreement
at arm's length.

                  (g) Additional  Registration  Statements.  In the event and to
the extent that the Registration Statement fails to register a sufficient amount
of Common Stock  necessary for the Company to issue and sell to the Investor and
the Investor to purchase from the Company all of the  Registrable  Securities to
be issued, sold and purchased under the Purchase Agreement and the Warrant,  the
Company  shall prepare and file with the  Commission an additional  registration
statement or statements in order to  effectuate  the purpose of this  Agreement,
the Purchase Agreement, and the Warrant.

                                   ARTICLE II
                             REGISTRATION PROCEDURES

Section 2.1.  FILINGS;  INFORMATION.  The Company shall effect the  registration
with  respect  to the sale of the  Registrable  Securities  by the  Investor  in
accordance with the intended  methods of disposition  thereof.  Without limiting
the  foregoing,  the  Company  in  each  such  case  will  do the  following  as
expeditiously  as  possible,  but in no event later than the  deadline,  if any,
prescribed therefor in this Agreement:

                  (a) Subject to Section  1.1(e),  the Company shall (i) prepare
and file with the Commission the Registration  Statement;  (ii) use commercially
reasonable efforts to cause such filed  Registration  Statement to become and to
remain  effective  (pursuant to Rule 415 under the Securities Act or otherwise);
(iii) prepare and file with the Commission  such  amendments and  supplements to
the  Registration  Statement and the Prospectus used in connection  therewith as
may be  necessary to keep such  Registration  Statement  effective  for the time
period  prescribed by Section 4.2 and in order to effectuate the purpose of this
Agreement,  the Purchase  Agreement,  and the Warrant;  and (iv) comply with the
provisions  of  the  Securities  Act  with  respect  to the  disposition  of all
securities  covered  by  such  Registration  Statement  during  such  period  in
accordance with the intended methods of disposition by the Investor set forth in
such  Registration  Statement;  provided,  however,  that the Investor  shall be
responsible  for the  delivery  of the  Prospectus  to the  Persons  to whom the
Investor sells the Shares and the Warrant Shares.

                  (b) If so requested by a managing underwriter or underwriters,
if any, or the holders of a majority of the Registrable Securities being sold in
connection with the filing of a Registration  Statement under the Securities Act
for the  offering on a continuous  or delayed  basis in the future of all of the
Registrable Securities (a "Shelf Registration"),  the Company shall (i) promptly
incorporate  in  a  prospectus  supplement  or  post-effective   amendment  such
information as the managing underwriters,  if any, and such holders agree should
be  included  therein,  and (ii) make all  required  filings of such  prospectus
supplement or post-effective  amendment as soon as practicable after the Company
has received  notification  of the matters to be incorporated in such prospectus
supplement or  post-effective  amendment;  provided,  however,  that the Company
shall not be required to take any action  pursuant  to this  Section  2.1(b)(ii)
that would, in the opinion of counsel for the Company, violate applicable law.

                                       3
<PAGE>

                  (c) In connection with the filing of a Shelf Registration, the
Company  shall  enter into such  reasonable  agreements  and take all such other
reasonable actions in connection therewith (including those reasonably requested
by the  managing  underwriters,  if any,  or the  holders of a  majority  of the
Registrable  Securities  being  sold) in order to  expedite  or  facilitate  the
disposition of such Registrable Securities,  and in such connection,  whether or
not  an  underwriting   agreement  is  entered  into  and  whether  or  not  the
registration  is an underwritten  registration,  the Company shall (i) make such
representations and warranties to the holders of such Registrable Securities and
the underwriters, if any, with respect to the business of the Company (including
with respect to businesses or assets acquired or to be acquired by the Company),
and the Registration  Statement,  Prospectus and documents, if any, incorporated
or deemed to be  incorporated  by  reference  therein,  in each  case,  in form,
substance  and scope as are  customarily  made by  issuers  to  underwriters  in
underwritten  offerings,  and confirm such representations and warranties if and
when  requested;  (ii) if an  underwriting  agreement is entered  into, it shall
contain  indemnification  provision  and  procedures  no less  favorable  to the
selling holders of such  Registrable  Securities and the  underwriters,  if any,
than those set forth herein (or such other provisions and procedures  acceptable
to  the  holders  of a  majority  of  Registrable  Securities  covered  by  such
Registration Statement and the managing underwriters, if any); and (iii) deliver
such documents and certificates as may be reasonably requested by the holders of
a majority  of the  Registrable  Securities  being sold,  their  counsel and the
managing  underwriters,  if any, to  evidence  the  continued  validity of their
representations and warranties made pursuant to clause (i) above and to evidence
compliance with any customary conditions contained in the underwriting agreement
or other agreement entered into by the Company.

                  (d) If the Investor  determines  to engage an  underwriter  in
connection  with the  offering  of any  Registrable  Securities  (other than the
resale  broker-dealers  identified in the Prospectus as such), the Investor will
enter into and perform its obligations under an underwriting agreement, in usual
and customary form, including, without limitation, customary indemnification and
contribution  obligation,  with the managing  underwriter of such offering,  and
will take such other actions as are reasonably  required in order to expedite or
facilitate the  disposition of the Registrable  Securities,  unless the Investor
has  notified  the  Company  in writing of its  election  to exclude  all of its
Registrable Securities from such Registration Statement; provided, however, that
the  Investor  shall  consult  with the Company  prior to any such  underwritten
offering and defer such offering for a reasonable  period upon the  commercially
reasonable  request of the  Company.  The Investor  may not  participate  in any
underwriting distribution hereunder unless it (i) agrees to sell its Registrable
Securities on the basis provided in any underwriting agreements,  (ii) completes
and executes all questionnaires,  powers of attorney, indemnities,  underwriting
agreements  and  other  documents  reasonably  required  under the terms of such
underwriting agreements,  and (iii) agrees to pay all underwriting discounts and
commissions and other fees and expenses of investment bankers and any manager or
managers of such underwriting, and legal expenses of the underwriter, applicable
with respect to its Registrable Securities.

                  (e) Three (3)  Trading  Days prior to filing the  Registration
Statement or  Prospectus,  or any  amendment or  supplement  thereto  (excluding
amendments  deemed  to  result  from the  filing of  documents  incorporated  by
reference  therein),  the Company  shall  deliver to the Investor and to counsel
representing the Investor,  in accordance with the notice  provisions of Section
4.8, copies of the Registration  Statement,  Prospectus and/or any amendments or
supplements  thereto as proposed to be filed,  together with  exhibits  thereto,
which documents will be subject to review by the Investor and such counsel,  and
thereafter  deliver to the Investor and such  counsel,  in  accordance  with the
notice  provisions  of Section  4.8,  such number of copies of the  Registration
Statement,  each  amendment and  supplement  thereto (in each case including all
exhibits thereto),  the Prospectus  (including each preliminary  prospectus) and
such other  documents or  information  as the Investor or counsel may reasonably
request in order to facilitate the disposition of the Registrable Securities.

                                       4
<PAGE>

                  (f) The Company shall deliver,  in accordance  with the notice
provisions of Section 4.8, to each seller of Registrable  Securities  covered by
the  Registration  Statement such number of conformed copies of the Registration
Statement and of each amendment and  supplement  thereto (in each case including
all exhibits and documents incorporated by reference),  such number of copies of
the  Prospectus   (including  each   preliminary   prospectus  and  any  summary
prospectus) and any other prospectus filed under Rule 424 promulgated  under the
Securities Act relating to such seller's Registrable Securities,  and such other
documents,  as such seller may reasonably  request to facilitate the disposition
of its Registrable Securities.

                  (g)  After  the  filing  of the  Registration  Statement,  the
Company  shall  promptly  notify  the  Investor  of any  stop  order  issued  or
threatened by the Commission in connection  therewith and take all  commercially
reasonable actions required to prevent the entry of such stop order or to remove
it if entered.

                  (h) The Company shall use commercially  reasonable  efforts to
(i) register or qualify the Registrable  Securities  under such other securities
or blue sky laws of each  jurisdiction  in the United States as the Investor may
reasonably  (in light of its intended plan of  distribution)  request,  and (ii)
cause the Registrable Securities to be registered with or approved by such other
governmental agencies or authorities in the United States as may be necessary by
virtue of the  business and  operations  of the Company and do any and all other
acts and things that may be  reasonably  necessary  or  advisable  to enable the
Investor to consummate the disposition of the Registrable Securities;  provided,
however,  that the  Company  will not be  required  to qualify  generally  to do
business in any jurisdiction where it would not otherwise be required to qualify
but  for  this  Section   2.1(g),   subject  itself  to  taxation  in  any  such
jurisdiction,  consent  or subject  itself to general  service of process in any
such  jurisdiction,  change any existing  business  practices,  benefit plans or
outstanding securities or amend or otherwise modify the Charter or Bylaws.

                  (i) The Company shall enter into customary agreements and take
such  other  actions  as are  reasonably  required  in  order  to  expedite  the
disposition of such Registrable  Securities  (whereupon the Investor may, at its
option, require that any or all of the representations, warranties and covenants
of the Company also be made to and for the benefit of the Investor).

                  (j) The Company shall make available to the Investor (and will
deliver to Investor's counsel),(A) subject to restrictions imposed by the United
States federal  government or any agency or instrumentality  thereof,  copies of
all public correspondence  between the Commission and the Company concerning the
Registration  Statement  and will  also make  available  for  inspection  by the
Investor and any  attorney,  accountant  or other  professional  retained by the
Investor  (collectively,  the  "Inspectors"),(B)  upon reasonable advance notice
during  normal  business  hours  all  financial  and  other  records,  pertinent
corporate documents and properties of the Company (collectively,  the "Records")
as shall be reasonably  necessary to enable them to exercise their due diligence
responsibility,  and cause the  Company's  officers and  employees to supply all
information  reasonably  requested  by any  Inspectors  in  connection  with the
Registration Statement.  Records that the Company determines,  in good faith, to
be confidential and that it notifies the Inspectors are  confidential  shall not
be disclosed by the Inspectors  unless the disclosure or release of such Records
is requested or required pursuant to oral questions,  interrogatories,  requests
for  information  or  documents  or a  subpoena  or other  order from a court of
competent  jurisdiction or other process;  provided,  however, that prior to any
disclosure  or  release  pursuant  to  the  immediately  preceding  clause,  the
Inspectors  shall  provide the Company with prompt notice of any such request or
requirement  so that the Company  may seek an  appropriate  protective  order or
waive such Inspectors'  obligation not to disclose such Records;  and, provided,
further,  that if failing the entry of a  protective  order or the waiver by the
Company  permitting the disclosure or release of such Records,  the  Inspectors,
upon advice of counsel,  are compelled to disclose such Records,  the Inspectors
may disclose that portion of the Records that counsel has advised the Inspectors
that the Inspectors are compelled to disclose;  provided, however, that upon any
such required  disclosure,  such Inspector  shall use his or her best efforts to
obtain reasonable  assurances that confidential  treatment will be afforded such

                                       5
<PAGE>

information.  The Investor  agrees that  information  obtained by it solely as a
result of such inspections (not including any information  obtained from a third
party who, insofar as is known to the Investor after reasonable  inquiry, is not
prohibited from providing such information by a contractual,  legal or fiduciary
obligation to the Company)  shall be deemed  confidential  and shall not be used
for any  purposes  other than as  indicated  above or by it as the basis for any
market  transactions  in the securities of the Company or its affiliates  unless
and until such  information  is made  generally  available  to the  public.  The
Investor  further  agrees that it will,  upon learning  that  disclosure of such
Records  is  sought in a court of  competent  jurisdiction,  give  notice to the
Company and allow the Company, at its expense,  to undertake  appropriate action
to prevent disclosure of the Records deemed confidential.

                  (k) To the extent  required by law or reasonably  necessary to
effect a sale of Registrable  Securities in accordance with prevailing  business
practices  at the  time of any  sale of  Registrable  Securities  pursuant  to a
Registration  Statement,  the  Company  shall  deliver to the  Investor a signed
counterpart, addressed to the Investor, of (1) an opinion or opinions of counsel
to the Company,  and (2) a comfort letter or comfort  letters from the Company's
independent public accountants, each in customary form and covering such matters
of the type customarily  covered by opinions or comfort letters, as the case may
be, as the Investor therefor reasonably requests.

                  (l) The Company  shall  otherwise  comply with all  applicable
rules  and  regulations  of  the  Commission,   including,  without  limitation,
compliance with applicable reporting requirements under the Exchange Act.

                  (m) The Company shall  appoint a transfer  agent and registrar
for all of the Registrable Securities covered by such Registration Statement not
later than the effective date of such Registration Statement.

                  (n) The Company may require the  Investor to promptly  furnish
in writing to the Company such information as may be required in connection with
such registration including,  without limitation, all such information as may be
requested by the Commission or the NASD or any state  securities  commission and
all such information regarding the Investor,  the Registrable Securities held by
the  Investor  and  the  intended  method  of  disposition  of  the  Registrable
Securities.  The  Investor  agrees to  provide  such  information  requested  in
connection with such registration  within five (5) Business days after receiving
such written  request and the Company shall not be responsible for any delays in
obtaining or maintaining the effectiveness of the Registration  Statement caused
by the Investor's failure to timely provide such information.

                  (o) The  Investor  will use  cooperate  with the  Company,  as
reasonably  requested by the Company,  in connection  with the  preparation  and
filing of any Registration Statement hereunder, unless the Investor has notified
the Company in writing of such Investor's irrevocable election to exclude all of
the Investor's Registrable Securities from such Registration Statement.

                  (p) Upon receipt of a Blackout  Notice from the  Company,  the
Investor shall  immediately  discontinue  disposition of Registrable  Securities
pursuant to the  Registration  Statement  covering such  Registrable  Securities
until  (i) the  Company  advises  the  Investor  that the  Blackout  Period  has
terminated and (ii) the Investor  receives  copies of a supplemented  or amended
prospectus,  if  necessary.  If so directed by the Company,  the  Investor  will
deliver to the Company (at the expense of the  Company) or destroy  (and deliver
to the  Company a  certificate  of  destruction)  all  copies in the  Investor's
possession  (other  than a limited  number  of file  copies)  of the  prospectus
covering such  Registrable  Securities that is current at the time of receipt of
such notice.

                                       6
<PAGE>

Section  2.2.  REGISTRATION  EXPENSES.  The Company  shall pay all  registration
expenses   incurred  in  connection   with  the   Registration   Statement  (the
"Registration Expenses"),  including,  without limitation: (i) all registration,
filing,   securities   exchange  listing  and  fees  required  by  the  National
Association of Securities Dealers, (ii) all registration,  filing, qualification
and other fees and  expenses  of  compliance  with  securities  or blue sky laws
(including  reasonable fees and disbursements of counsel in connection with blue
sky  qualifications of the Registrable  Securities),  (iii) all word processing,
duplicating,  printing,  messenger  and delivery  expenses,  (iv) the  Company's
internal expenses (including,  without limitation,  all salaries and expenses of
its officers and employees  performing legal or accounting duties), (v) the fees
and  expenses  incurred  by the  Company in  connection  with the listing of the
Registrable  Securities,  (vi) reasonable fees and  disbursements of counsel for
the Company and customary  fees and expenses for  independent  certified  public
accountants  retained  by the  Company  (including  the  expenses of any special
audits or comfort  letters or costs  associated with the delivery by independent
certified  public  accountants  of such  special  audit(s) or comfort  letter(s)
requested pursuant to Section 2.1(i) hereof), (vii) the fees and expenses of any
special experts retained by the Company in connection with such registration and
amendments and supplements to the Registration Statement and Prospectus,  (viii)
all  reasonable  fees and  expenses  of counsel  for the  Investor to the extent
incurred in connection with the review,  and assistance in  preparation,  of the
Registration  Statement,  correspondence  with the Commission and amendments and
supplements to the Registration Statement and Prospectus,  and (ix) any fees and
disbursements  of  underwriters  customarily  paid  by  issuers  or  sellers  of
securities,  but  excluding  underwriting  fees,  discounts,  transfer  taxes or
commissions,  if any, attributable to the sale of Registrable Securities,  which
shall be payable by each holder of Registrable  Securities pro rata on the basis
of the number of Registrable Securities of each such holder that are included in
a registration under this Agreement.

                                   ARTICLE III
                                 INDEMNIFICATION

Section 3.1. INDEMNIFICATION.

         (a) The Company agrees to indemnify and hold harmless the Investor, its
partners, Affiliates, officers, directors, employees and duly authorized agents,
and each Person or entity,  if any, who controls the Investor within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act,  together
with  the  partners,   Affiliates,   officers,  directors,  employees  and  duly
authorized  agents  of such  controlling  Person or  entity  (collectively,  the
"Controlling  Persons"),  from and against any loss, claim,  damage,  liability,
costs and expenses (including,  without limitation,  reasonable  attorneys' fees
and disbursements and costs and expenses of investigating and defending any such
claim) (collectively, "Damages"), joint or several, and any action or proceeding
in respect thereof to which the Investor,  its partners,  affiliates,  officers,
directors, employees and duly authorized agents, and any Controlling Person, may
become subject under the Securities  Act or otherwise,  as incurred,  insofar as
such Damages (or actions or proceedings in respect thereof) arise out of, or are
based upon, any untrue  statement or alleged untrue statement of a material fact
contained in any Registration Statement, or in any preliminary prospectus, final
prospectus,  summary  prospectus,   amendment  or  supplement  relating  to  the
Registrable  Securities  or arises out of, or are based  upon,  any  omission or
alleged  omission to state therein a material fact required to be stated therein
or  necessary  to make  the  statements  therein  under  the  circumstances  not
misleading,  and  shall  reimburse  the  Investor,  its  partners,   affiliates,
officers,  directors,  employees  and duly  authorized  agents,  and  each  such
Controlling  Person, for any legal and other expenses reasonably incurred by the
Investor,  its partners,  affiliates,  officers,  directors,  employees and duly
authorized agents, or any such Controlling Person, as incurred, in investigating
or  defending  or  preparing  to defend  against any such  Damages or actions or
proceedings;  provided,  however,  that the  Company  shall not be liable to the

                                       7
<PAGE>

extent  that  any  such  Damages  arise  out of the  Investor's  (or  any  other
indemnified  Person's) failure to send or give a copy of the final prospectus or
supplement (as then amended or supplemented) to the persons  asserting an untrue
statement  or alleged  untrue  statement  or omission or alleged  omission at or
prior to the written confirmation of the sale of Registrable  Securities to such
person if such  statement or omission was corrected in such final  prospectus or
supplement;  provided,  further,  that the  Company  shall  not be liable to the
extent that any such Damages arise out of or are based upon an untrue  statement
or  alleged  untrue  statement  or  omission  or alleged  omission  made in such
Registration Statement,  or any such preliminary  prospectus,  final prospectus,
summary  prospectus,  amendment or supplement in reliance upon and in conformity
with  written  information  furnished  to the  Company  by or on  behalf  of the
Investor or any other person who  participates as an underwriter in the offering
or sale of such securities,  in either case, specifically stating that it is for
use in the preparation thereof.

         (b) In connection with any Registration Statement with respect to which
the Investor is participating, the Investor will indemnify and hold harmless, to
the same extent and in the same manner set forth in the preceding paragraph, the
Company,  each of  directors,  each its  officers  who  signs  the  Registration
Statement,  each Person,  if any, who controls the Company within the meaning of
Section  15 of the  Securities  Act or Section  20 of the  Exchange  Act (each a
"Company   Indemnified  Person")  against  any  Damages  to  which  any  Company
Indemnified Person may become subject under the Securities Act, the Exchange Act
or otherwise, insofar as the such Damages arises out of or is based upon (a) any
untrue statement or alleged untrue statement of a material fact contained in any
Registration  Statement,  or in any preliminary  prospectus,  final  prospectus,
summary  prospectus,   amendment  or  supplement  relating  to  the  Registrable
Securities or arises out of, or are based upon, any omission or alleged omission
to state therein a material  fact required to be stated  therein or necessary to
make the statements therein under the circumstances not misleading to the extent
that such  violation  occurs in reliance  upon and in  conformity  with  written
information  furnished  to the  Company  by the  Investor  or on  behalf  of the
Investor expressly for use in connection with such Registration Statement or (b)
any failure by the Investor to comply with prospectus  delivery  requirements of
the  Securities  Act,  the  Exchange  Act or any other law or legal  requirement
applicable to sales under the Registration Statement.

Section   3.2.   CONDUCT  OF   INDEMNIFICATION   PROCEEDINGS.   All  claims  for
indemnification  under  Section 3.1 shall be asserted and resolved in accordance
with the provisions of Section 11.02 and 11.03 of the Purchase Agreement.

Section  3.3.  ADDITIONAL  INDEMNIFICATION.   Indemnification  similar  to  that
specified  in the  preceding  sections  of this  Article  III (with  appropriate
modifications)  shall be given  by the  Company  with  respect  to any  required
registration or other qualification of securities under any federal or state law
or regulation of any  governmental  authority other than the Securities Act. The
provisions  of this  Article  III shall be in  addition  to any other  rights to
indemnification,  contribution or other remedies which an Indemnified  Party may
have pursuant to law, equity, contract or otherwise.

To the extent that any  indemnification  provided  for herein is  prohibited  or
limited by law, the indemnifying  party will make the maximum  contribution with
respect to any amounts for which it would otherwise be liable under this Article
III to the fullest extent permitted by law. However, (a) no contribution will be
make under  circumstances  where maker of such contribution  would not have been
required to indemnify the indemnified  party under the fault standards set forth
in  this  Article  III,  (b) no  seller  of  Registrable  Securities  guilty  of
fraudulent  misrepresentation  (within  the  meaning  of  Section  11(f)  of the
Securities  Act) will be  entitled  to  contribution  from any Person who is not
guilty of such fraudulent misrepresentation, and (c) contribution (together with
any  indemnification   obligations  under  this  Agreement)  by  any  seller  of
Registrable  Securities  will be limited in amount of proceeds  received by such
seller from the sale of such Registrable Securities.

                                       8
<PAGE>

                                   ARTICLE IV
                                  MISCELLANEOUS

Section 4.1. NO OUTSTANDING REGISTRATION RIGHTS. Except as set forth on Schedule
4.03 of the  Purchase  Agreement  or in the  Commission  Documents,  the Company
represents  and warrants to the Investor that there is not in effect on the date
hereof any agreement by the Company  pursuant to which any holders of securities
of the Company  have a right to cause the  Company to  register or qualify  such
securities  under the  Securities  Act or any securities or blue sky laws of any
jurisdiction.

Section  4.2.  TERM.  The  registration   rights  provided  to  the  holders  of
Registrable Securities hereunder shall terminate at the earlier of (i) such time
that is two years  following the  termination of the Purchase  Agreement or (ii)
such time as all  Registrable  Securities have been issued and have ceased to be
Registrable  Securities.  Notwithstanding  the  foregoing,  Sections  1.1(c) and
1.1(d),  Article III, Section 4.8, and Section 4.9 shall survive the termination
of this Agreement.

Section 4.3.  RULE 144. The Company  will,  at its expense,  promptly  take such
action as holders of Registrable  Securities  may  reasonably  request to enable
such holders of Registrable  Securities to sell Registrable  Securities  without
registration  under the  Securities  Act within the limitation of the exemptions
provided by (a) Rule 144 under the Securities Act ("Rule 144"), as such Rule may
be amended from time to time,  or (b) any similar rule or  regulation  hereafter
adopted by the  Commission.  If at any time the Company is not  required to file
such reports, it will, at its expense, forthwith upon the written request of any
holder  of  Registrable  Securities,  make  available  adequate  current  public
information  with respect to the Company within the meaning of paragraph  (c)(2)
of Rule 144 or such other  information  as necessary to permit sales pursuant to
Rule 144. Upon the request of the Investor (which request shall not be made more
than once per  calendar  quarter),  the Company  will  deliver to the Investor a
written statement,  signed by the Company's  principal  financial officer, as to
whether it has complied with such requirements.

Section 4.4. CERTIFICATE.  The Company will, at its expense,  forthwith upon the
request of any holder of Registrable Securities (which request shall not be made
more than once per  calendar  quarter),  deliver to such  holder a  certificate,
signed by the Company's principal  financial officer,  stating (a) the Company's
name,  address and telephone  number  (including  area code),  (b) the Company's
Internal Revenue Service  identification  number,  (c) the Company's  Commission
file  number,  (d) the  number of shares of each class of Stock  outstanding  as
shown by the most recent report or statement  published by the Company,  and (e)
whether  the  Company  has  filed the  reports  required  to be filed  under the
Exchange Act for a period of at least ninety (90) days prior to the date of such
certificate  and in addition has filed the most recent annual report required to
be filed thereunder.

Section 4.5. AMENDMENT AND MODIFICATION.  Any provision of this Agreement may be
waived,  provided  that such  waiver is set forth in a writing  executed by both
parties to this  Agreement.  The  provisions  of this  Agreement,  including the
provisions of this sentence, may not be amended,  modified or supplemented,  and
waivers or consents to departures  from the provisions  hereof may not be given,
unless the Company has obtained the written consent of the holders of a majority
of the then outstanding Registrable  Securities.  Notwithstanding the foregoing,
the  waiver of any  provision  hereof  with  respect  to a matter  that  relates
exclusively to the rights of holders of Registrable  Securities whose securities
are being sold  pursuant to a  Registration  Statement  and does not directly or
indirectly  affect the rights of other holders of Registrable  Securities may be
given by holders of at least a majority of the Registrable Securities being sold
by such  holders;  provided  that the  provisions  of this  sentence  may not be
amended,  modified or  supplemented  except in accordance with the provisions of
the immediately  preceding  sentence.  No course of dealing between or among any
Person having any interest in this Agreement will be deemed effective to modify,
amend or discharge any part of this  Agreement or any rights or  obligations  of
any person under or by reason of this Agreement.

                                       9
<PAGE>

Section 4.6. SUCCESSORS AND ASSIGNS; ENTIRE AGREEMENT. This Agreement and all of
the  provisions  hereof  shall be binding  upon and inure to the  benefit of the
parties hereto and their  respective  successors  and assigns.  The Investor may
assign  its  rights  under  this  Agreement  to  any  subsequent  holder  of the
Registrable  Securities  (unless  sold  pursuant  to an  effective  registration
statement or in accordance  with Rule 144 under the  Securities  Act),  provided
that the  Company  shall  have the right to require  any  holder of  Registrable
Securities  to execute a  counterpart  of this  Agreement as a condition to such
holder's  claim to any  rights  hereunder.  This  Agreement,  together  with the
Purchase  Agreement  and the  Warrant(s)  sets  forth the entire  agreement  and
understanding between the parties as to the subject matter hereof and merges and
supersedes all prior discussions, agreements and understandings of any and every
nature among them.

Section 4.7.  SEVERABILITY.  In the event that any  provision of this  Agreement
becomes or is  declared  by a court of  competent  jurisdiction  to be  illegal,
unenforceable  or void,  this Agreement  shall continue in full force and effect
without said provision;  provided that such severability shall be ineffective if
it  materially  changes  the  economic  benefit of this  Agreement  to any party
hereto.

Section 4.8. NOTICES. All notices, demands, requests,  consents,  approvals, and
other  communications   required  or  permitted  hereunder  shall  be  given  in
accordance with Section 12.04 of the Purchase Agreement.

Section 4.9.  GOVERNING LAW. This Agreement shall be construed under the laws of
the State of New York.

Section 4.10.  HEADINGS.  The headings in this Agreement are for  convenience of
reference only and shall not constitute a part of this Agreement, nor shall they
affect their meaning, construction or effect.

Section  4.11.  COUNTERPARTS.   This  Agreement  may  be  executed  in  multiple
counterparts, each of which shall be deemed to be an original instrument and all
of which together shall constitute one and the same instrument.

Section  4.12.  FURTHER  ASSURANCES.  Each party shall  cooperate  and take such
action as may be reasonably requested by another party in order to carry out the
provisions  and purposes of this  Agreement  and the  transactions  contemplated
hereby.

Section 4.13. ABSENCE OF PRESUMPTION.  This Agreement shall be construed without
regard to any  presumption  or rule  requiring  construction  or  interpretation
against the party drafting or causing any instrument to be drafted.

                                       10
<PAGE>

         IN WITNESS  WHEREOF,  the parties hereto have caused this  Registration
Rights Agreement to be executed by the  undersigned,  thereunto duly authorized,
as of the date first set forth above.

                                        TEGAL CORPORATION

                                        By: /s/ Thomas R. Mika
                                            --------------------------------
                                            Thomas R. Mika
                                            Executive Vice President and Chief
                                            Financial Officer

                                        KINGSBRIDGE CAPITAL LIMITED

                                        By: /s/ Valentine O'Donoghue
                                            ---------------------------------
                                            Valentine O'Donoghue
                                            Director

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