<PAGE> 1
Exhibit 5.1
[Latham & Watkins Letterhead]
July 28, 2000
Tegal Corporation
2201 S. McDowell Blvd.
Petaluma, California 94954
Re: $30,000,000 Aggregate Offering
Price of Securities of Tegal Corporation
Ladies and Gentlemen:
In connection with the registration statement on Form S-3 filed
with the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Securities Act") on May 30, 2000 (File
No. 333-38086), as amended by Amendment No. 1 filed with the Commission on the
date hereof (the "Registration Statement"), you have requested our opinion with
respect to the matters set forth below.
You have provided us with a draft prospectus (the "Prospectus")
which is a part of the Registration Statement. The Prospectus provides that it
will be supplemented in the future by one or more supplements to the Prospectus
(each, a "Prospectus Supplement"). The Prospectus as supplemented by various
Prospectus Supplements will provide for the issuance and sale by Tegal
Corporation, a Delaware corporation (the "Company") of up to $30,000,000
aggregate offering price of (i) shares of common stock, par value $0.01 per
share (the "Common Stock"), and (ii) warrants to purchase Common Stock
("Warrants"). The Common Stock and Warrants are collectively referred to herein
as the "Securities." The Warrants may be issued pursuant to one or more warrant
agreements (collectively, the "Warrant Agreements"), in each case between the
Company and a financial institution identified therein as warrant agent (each, a
"Warrant Agent").
In our capacity as counsel to the Company in connection with the
Registration Statement, we are generally familiar with the proceedings taken and
proposed to be taken by the Company in connection with the authorization and
issuance of the Securities. For purposes of this opinion, we have assumed that
such proceedings will be timely and properly completed, in accordance with all
requirements of applicable federal Delaware and New York laws, in the manner
presently proposed.
We have made such legal and factual examinations and inquiries,
including an examination of originals and copies certified or otherwise
identified to our satisfaction, of all such documents, corporate records and
instruments of the Company as we have deemed necessary or appropriate for
purposes of this opinion. In our examination, we have assumed the genuineness of
all signatures, the authenticity of all documents submitted to us as originals,
and the conformity to authentic original documents of all documents submitted to
us as copies.
We have been furnished with, and with your consent have
exclusively relied upon, certificates of officers of the Company with respect to
certain factual matters. In addition, we have obtained and relied upon such
certificates and assurances from public officials as we have deemed necessary.
We are opining herein as to the effect on the subject transaction
only of the federal securities laws of the United States, the General
Corporation Law of the State of Delaware (the "DGCL"), and with respect to the
opinion set forth in paragraph 1 below, the internal laws of the State of New
York, and we express no opinion with respect to the applicability thereto, or
the effect thereon, of the laws of any other jurisdiction or, in the case of
Delaware, any other laws, or as to any matters of municipal law or the laws of
any local agencies within any state.
Subject to the foregoing and the other qualifications set forth
herein, it is our opinion that, as of the date hereof:
<PAGE> 2
1. When (a) the applicable Warrant Agreement has been duly
executed and delivered, and the terms of the Warrants and of their issuance and
sale have been duly established in conformity with the applicable Warrant
Agreement and applicable law, and (b) when the Warrants have been duly executed
and countersigned in accordance with the applicable Warrant Agreement relating
to such Warrants, and issued and sold in the form and in the manner contemplated
in the Registration Statement, the Prospectus and the related Prospectus
Supplement(s), and (c) when the Registration Statement and any required
post-effective amendment thereto and any and all Prospectus Supplement(s)
required by applicable laws have all become effective under the Securities Act,
and (d) assuming that the terms of the applicable Warrant Agreement as executed
and delivered are as described in the Registration Statement, the Prospectus and
the related Prospectus Supplement(s), and (e) assuming that the applicable
Warrant Agreement as executed and delivered does not violate any law applicable
to the Company or result in a default under or breach of any agreement or
instrument binding upon the Company, and (f) assuming that the applicable
Warrant Agreement as executed and delivered complies with all requirements and
restrictions, if any, applicable to the Company, whether imposed by any court or
governmental or regulatory body having jurisdiction over the Company, and (g)
assuming that the Warrants are then issued and sold as contemplated in the
Registration Statement, the Prospectus and the related Prospectus Supplement(s),
the applicable Warrant Agreement will constitute a valid and legally binding
obligation of the Company, enforceable against the Company in accordance with
the applicable Warrant Agreement's terms.
2. The Company has the authority pursuant to its Certificate of
Incorporation, as amended (the "Amended Certificate"), to issue up to 35,000,000
shares of Common Stock. Upon adoption by the Board of Directors of the Company
of a resolution in form and content as required by the DGCL and upon issuance
and delivery of and payment for such shares in the manner contemplated by the
Registration Statement, the Prospectus and the related Prospectus Supplement(s)
and by such resolution, and when the Registration Statement and any required
post-effective amendment thereto and any and all Prospectus Supplement(s)
required by applicable laws have all become effective under the Securities Act,
and assuming that (i) the terms of such shares as executed and delivered are as
described in the Registration Statement, the Prospectus and the related
Prospectus Supplement(s), (ii) the Company has a sufficient number of authorized
but unissued shares under the Amended Certificate at the time of issuance, (iii)
such shares as executed and delivered do not violate any law applicable to the
Company or result in a default under or breach of any agreement or instrument
binding upon the Company, (iv) such shares as executed and delivered comply with
all requirements and restrictions, if any, applicable to the Company, whether
imposed by any court or governmental or regulatory body having jurisdiction over
the Company and (v) such shares are then issued and sold as contemplated in the
Registration Statement, such shares of Common Stock (including, without
limitation, any Common Stock duly issued upon the exchange or conversion of any
shares of preferred stock that are exchangeable or convertible into Common
Stock, upon the exercise of any Warrants exercisable for Common Stock or upon
the exchange or conversion of debt securities that are exchangeable or
convertible into Common Stock) will be validly issued, fully paid and
nonassessable.
All of the opinions set forth above are subject to the following
exceptions, limitations and qualifications: (i) the effect of bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to or affecting the rights and remedies of creditors; (ii) the
effect of general principles of equity, including without limitation, concepts
of materiality, reasonableness, good faith and fair dealing and the possible
unavailability of specific performance or injunctive relief, regardless of
whether enforcement is considered in a proceeding in equity or at law, and the
discretion of the court before which any proceeding therefor may be brought;
(iii) the unenforceability under certain circumstances under law or court
decisions of provisions providing for the indemnification of, or contribution
to, a party with respect to a liability where such indemnification or
contribution is contrary to public policy; and (iv) the unenforceability of any
provision regarding the payment of attorney's fees, except to the extent that a
court determines such fees to be reasonable.
To the extent that the obligations of the Company under the
applicable Warrant Agreement may be dependent upon such matters, we assume for
purposes of this opinion that the Warrant Agent will have complied with any
applicable requirement to file returns and pay taxes under the Franchise Tax Law
of the State of California, the Warrant Agent for each Warrant Agreement will be
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization; that the Warrant Agent will be duly qualified to
engage in the activities contemplated by the applicable Warrant Agreement; that
the applicable Warrant Agreement will have been duly authorized, executed and
delivered by the Warrant Agent and will constitute a legally valid, binding and
enforceable obligation of the Warrant Agent, enforceable against the Warrant
Agent in accordance with its terms; that the Warrant Agent will be in
compliance, generally and with respect to acting as Warrant Agent under the
applicable Warrant
2
<PAGE> 3
Agreement, with all applicable laws and regulations; and that the Warrant Agent
will have the requisite organizational and legal power and authority to perform
its obligations under the applicable Warrant Agreement.
We consent to your filing this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the caption "Legal
Matters" in the Prospectus included therein.
This opinion is rendered only to you and is solely for your
benefit in connection with the transactions covered hereby. This opinion may not
be relied upon by you for any other purpose, or furnished to, quoted to, or
relied upon by any other person, firm or corporation for any purpose, without
our prior written consent.
Very truly yours,
/s/ Latham & Watkins
3
