Exhibit 10.1

EXECUTION COPY

EXCHANGE AND PURCHASE AGREEMENT

This Exchange and Purchase Agreement (this “Agreement”) is made and entered into
as of this 14th day of December, 2006, by and between              (the
“Holder”), and Credence Systems Corporation, a Delaware corporation (the
“Company”).

RECITALS

WHEREAS, the Holder currently holds $             principal amount of the
Company’s 1.5% Convertible Subordinated Notes due 2008 (the “Outstanding
Notes”);

WHEREAS, the Holder desires to exchange the Outstanding Notes for an equal
principal amount of the Company’s 3.5% Convertible Senior Subordinated Notes due
2010 (the “Exchange Notes”) on the terms and conditions set forth in this
Agreement (the “Note Exchange”);

WHEREAS, the Company desires to issue to the Holder $             principal
amount of Exchange Notes in exchange for the Outstanding Notes in the Note
Exchange;

WHEREAS, the Company desires to issue and sell to the Holder $            
principal amount of the Company’s 3.5% Convertible Senior Subordinated Notes due
2010, which shall have identical terms (except for principal amount) as those
set forth in the Exchange Notes (the “New Notes,” and together with the Exchange
Notes, the “3.5% Notes”) at a purchase price of $950 per $1,000 principal amount
of New Notes;

WHEREAS, the Holder desires to purchase $             principal amount of New
Notes at a purchase price of $950 per $1,000 principal amount of New Notes on
the terms and conditions set forth in this Agreement (the “Sale of New Notes”
and together with the Note Exchange, the Transaction”);

WHEREAS, the 3.5% Notes will be issued pursuant to the Indenture, to be entered
into by the Company and the Trustee named therein (the “Indenture”),
substantially in the form of Exhibit A hereto;

WHEREAS, in connection with the issuance of the 3.5% Notes the Company will
agree to provide the Holder registration rights pursuant to the Registration
Rights Agreement, to be entered into by the Company and the Holder, the other
holders of Outstanding Notes exchanging such notes for 3.5% Notes and any other
purchasers of the 3.5% Notes to be issued by the Company, if any (the
“Registration Rights Agreement”), substantially in the form of Exhibit B hereto;

NOW, THEREFORE, in consideration of the premises and the agreements set forth
below, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

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ARTICLE I

Exchange

Section 1.1 Exchange and Sale of the 3.5% Notes.

(a) Upon the terms and subject to the conditions of this Agreement, at the
Closing (as defined herein), the Company shall issue and exchange to the Holder,
and the Holder agrees to accept from the Company, $             in aggregate
principal amount of Exchange Notes, together with all accrued and unpaid
interest paid in cash on the Outstanding Notes to, but excluding, the Closing
Date, for $             aggregate principal amount of Outstanding Notes.

(b) Upon the terms and subject to the conditions of this Agreement, at the
Closing, the Company shall sell to the Holder, and the Holder agrees to purchase
from the Company, the $             aggregate principal amount of New Notes at a
purchase price of 95% of the principal amount thereof (the Purchase Price”).

Section 1.2 Closing. The closing of the transactions contemplated by this
Agreement (the “Closing”) is anticipated to take place on the third business day
after the date hereof at the offices of the Company, 1421 California Circle,
Milpitas, California 95035, or on such other date and at such other place as the
parties may agree in writing (the “Closing Date”). At the Closing, (i) the
Holder shall deliver or cause to be delivered to the Company (A) all of such
Holder’s right, title and interest in and to all of the Outstanding Notes, and
all documentation related thereto, and whatever documents of conveyance or
transfer may be necessary or desirable to transfer to and confirm in the Company
all right, title and interest in and to the Outstanding Notes and (B) the
Purchase Price, and (ii) the Company shall issue to the Holder the 3.5% Notes
and pay to the Holder in cash by wire transfer of immediately available funds an
amount equal to the accrued and unpaid interest on the Holder’s Outstanding
Notes to, but excluding, the day of the Closing.

Section 1.3 Conditions to Closing. (i) The obligation of the Holder hereunder to
consummate the transactions contemplated hereby at the Closing is subject to the
satisfaction, at or before the Closing Date, of each of the following
conditions, provided that these conditions are for the Holder’s sole benefit and
may be waived by the Holder at any time in its sole discretion by providing the
Company with prior written notice thereof:

(a) The Company shall have executed and delivered this Agreement to Holder;

(b) The Company and the Trustee shall have executed and delivered the Indenture;

(c) The Company shall have executed and delivered the 3.5% Notes in the
aggregate principal amount set forth in Section 1.1;

(d) The Company shall have executed and delivered the Registration Rights
Agreement to Holder;

 

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(e) The Company shall have submitted an additional share listing application for
the shares of Common Stock issuable upon conversion of the 3.5% Notes with the
Nasdaq Global Select Market and the shares of Common Stock issuable upon
conversion of the 3.5% Notes shall have been approved by the Nasdaq Global
Select Market for listing prior to the Closing;

(f) The Company shall have delivered to the Holder and Piper Jaffray & Co. a
certificate of the Company, dated the Closing Date, executed by the secretary of
the Company certifying in such capacity and on behalf of the Company (i) as to
the incumbency and signature of the officer of the Company who executed this
Agreement and the 3.5% Notes; and (ii) as to the adoption of resolutions of the
board of directors of the Company which are in full force and effect on the
Closing Date, authorizing (x) the execution and delivery of this Agreement, the
Indenture, the Registration Rights Agreement and the 3.5% Notes; and (y) the
performance of the obligations of the Company hereunder and thereunder;

(g) The Company shall have delivered to the Holder and Piper Jaffray & Co. a
certificate of the Chief Executive Officer or Chief Financial Officer of the
Company, dated the Closing Date, to the effect that the representations and
warranties of the Company in this Agreement are true and correct on and as of
the Closing Date with the same effect as if made on the Closing Date and that
the Company has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to the Closing
Date;

(h) Simultaneously with the Closing, the Company shall issue an aggregate
principal amount of 3.5% Notes that, together with notes issued to Other Holders
(as defined below) is not less than $122,500,000, of which at least $72,500,000
million aggregate principal amount shall be Exchange Notes;

(i) Subsequent to the execution and delivery of this Agreement and prior to the
Closing Date, there shall have been no suspension or material limitation of
trading in the Common Stock on The Nasdaq Global Select Market;

(j) The 3.5% Notes shall have been approved for trading on The PORTAL Market of
the National Association of Securities Dealers, Inc., subject only to notice of
issuance at or prior to the time of purchase;

(k) The Company shall have obtained a Committee on Uniform Securities
Identification Procedures number (CUSIP number) for the 3.5% Notes;

(l) The 3.5% Notes satisfy the requirements set forth in Rule 144A(d)(3) under
the Securities Act; and

(m) The Company shall have delivered to Holder and Piper Jaffray & Co. the
opinion of Morrison & Foerster LLP, dated as of the Closing Date, in
substantially the form of Exhibit C attached hereto.

(ii) The obligation of the Company hereunder to consummate the transactions
contemplated hereby at the Closing is subject to the satisfaction, at or before
the Closing Date, of each of the following conditions, provided that these
conditions are for the Company’s sole

 

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benefit and may be waived by the Company at any time in its sole discretion by
providing the Holder with prior written notice thereof:

(a) The Holder shall have executed and delivered to the Company this Agreement;

(b) The Holder shall have executed and delivered to the Company the Registration
Rights Agreement; and

(c) The Holder shall have delivered, or caused to be delivered, to the Company
the Outstanding Notes being exchanged pursuant to this Agreement and the
Purchase Price in accordance with the written instructions of the Company.

Section 1.4 Exchange of Sale of Additional Notes. Simultaneously with the
Closing, the Company (i) shall enter into one or more agreements substantially
identical to this Agreement (the “Other Agreements”) with one or more holders
(the “Other Holders”) of Outstanding Notes to exchange Exchange Notes with one
or more Other Holders for Outstanding Notes, subject to the terms of the
Indenture, in an aggregate principal amount that, together with the Exchange
Notes issued pursuant to this Agreement, is not less than $72,500,000, and
(ii) may issue New Notes pursuant to one or more Other Agreements, subject to
the terms of the Indenture, with one or more Other Holders and/or any new
Holders, so long as the purchase price for any such New Notes is not less than
$950 per $1,000 principal amount of New Notes.

ARTICLE II

Representations and Warranties of the Holder

The Holder hereby makes the following representations and warranties, each of
which is true and correct on the date hereof and shall survive the Closing Date
and the transactions contemplated hereby to the extent set forth herein.

Section 2.1 Existence and Power.

(a) The Holder is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization and has the power, authority
and capacity to execute and deliver this Agreement, to perform its obligations
hereunder, and to consummate the transactions contemplated hereby.

(b) The execution of this Agreement by the Holder and the consummation by the
Holder of the transactions contemplated hereby do not and will not constitute or
result in a breach, violation, conflict or default under any note, bond,
mortgage, deed, indenture, lien, instrument, contract, agreement, lease or
license to which the Holder is a party, whether written or oral, express or
implied, or any statute, law, ordinance, decree, order, injunction, rule,
directive, judgment or regulation of any court, administrative or regulatory
body, governmental authority, arbitrator, mediator or similar body on the part
of the Holder or on the part of any other party thereto or cause the
acceleration or termination of any obligation or right of the Holder, except for
such breaches, conflicts, defaults, rights or violations which would not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the ability of the Holder to perform its obligations
hereunder.

 

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Section 2.2 Valid and Enforceable Agreement; Authorization. This Agreement has
been duly executed and delivered by the Holder and constitutes a legal, valid
and binding obligation of the Holder, enforceable against the Holder in
accordance with its terms, except that such enforcement may be subject to
(a) bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting or relating to enforcement of creditors’ rights generally, and
(b) general principles of equity.

Section 2.3 Title to Outstanding Notes. The Holder is the sole beneficial owner
of and has good and valid title to the Outstanding Notes being exchanged by such
Holder hereby, free and clear of any mortgage, lien, pledge, charge, security
interest, encumbrance, title retention agreement, option, equity or other
adverse claim thereto. The Holder has not, in whole or in part, (i) assigned,
transferred, hypothecated, pledged or otherwise disposed of the Outstanding
Notes or its rights in such Outstanding Notes being exchanged or redeemed by
such Holder hereby, or (ii) given any person or entity any transfer order, power
of attorney or other authority of any nature whatsoever with respect to such
Outstanding Notes.

Section 2.4 Investment Decision. The Holder is either (i) a “qualified
institutional buyer” within the meaning of Rule 144A under the Securities Act of
1933, as amended (the “Securities Act”) or (ii) an “accredited investor” within
the meaning of Rule 501 of Regulation D under the Securities Act, and in either
case was not organized for the purpose of acquiring the 3.5% Notes or the shares
of the Company’s common stock (the “Common Stock”), $0.001 par value per share,
into which the 3.5% Notes may be converted (the “Underlying Common Stock”). The
Holder (or its authorized representative) is familiar with the Company’s
objectives and business plan, has had the opportunity to review the Company’s
filings with the Securities and Exchange Commission (the “SEC”), including,
without limitation, the Company’s Annual Report on Form 10-K filed on
January 17, 2006, the Company’s Quarterly Reports on Form 10-Q filed on each of
March 10, 2006, June 9, 2006 and September 11, 2006, the Company’s Definitive
Proxy Statement filed on February 24, 2006, and the Company’s Current Reports on
Form 8-K filed on March 2, 2006, March 21, 2006, March 25, 2006, May 25,
2006, August 9, 2006, August 24, 2006, September 11, 2006, November 13,
2006, December 7, 2006 and December 8, 2006 and the Company’s Amended Current
Report on Form 8-K/A filed on December 8, 2006 (all of such filings with the SEC
referred to, collectively, as the “SEC Documents”). The Holder has reviewed
copies of each of the Indenture and the Registration Rights Agreement, including
copies of each of the Indenture and Registration Rights Agreement marked to show
the differences between such documents and the respective indenture and
registration rights agreement related to the Outstanding Notes, and has had an
opportunity to ask questions of the Company and to obtain from representatives
of the Company such information as is necessary to determine the changes
reflected in each such document, including the changes to the terms of the 3.5%
Notes compared with the Outstanding Notes. The Holder has had such opportunity
to ask questions of the Company and its representative and to obtain from
representatives of the Company such information as is necessary to permit it to
evaluate the merits and risks of its investment in the Company and has
independently, without reliance upon any representatives of the Company and
based on such information as the Holder deemed appropriate, made its own
analysis and decision to enter into this Agreement. The Holder has had the
opportunity to consult with its accounting, tax, financial and legal advisors to
be able to evaluate the risks involved in the exchange of the Outstanding Notes
pursuant hereto and to make an informed investment decision with respect to such
exchange. The Holder acknowledges

 

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that the Company is relying on the truth and accuracy of the foregoing
representations and warranties in the offering of the 3.5% Notes to the Holder
without having first registered the 3.5% Notes or the Underlying Common Stock
under the Securities Act.

Section 2.5 Purchase Entirely for Own Account. The Holder is acquiring the 3.5%
Notes for its own account and not towards, or for resale in connection with, the
public sale or distribution thereof, except pursuant to sales registered or
exempted under the Securities Act; provided, however that by making the
representations herein, the Holder does not agree to hold any of such 3.5% Notes
for any minimum or other specific term and reserves the right to dispose of such
3.5% Notes or the Underlying Common Stock at any time in accordance with or
pursuant to a registration statement or an exemption under the Securities Act
and pursuant to the applicable terms of this Agreement. The Holder is acquiring
the 3.5% Notes to be issued to the Holder hereunder in the ordinary course of
its business. The Holder does not presently have any understanding, directly or
indirectly, with any person to distribute any of the 3.5% Notes to be issued to
the Holder hereunder.

Section 2.6 Restricted Securities. The Holder understands that neither the 3.5%
Notes nor the Underlying Common Stock have been registered under the Securities
Act, and are being issued hereunder by reason of a specific exemption from the
registration provisions of the Securities Act which depends upon, among other
things, the bona fide nature of the investment intent and the accuracy of the
Holder’s representations as expressed herein. The Holder understands that the
3.5% Notes (and the Underlying Common Stock) are “restricted securities” under
applicable U.S. federal and state securities laws and that, pursuant to these
laws, the Holder must hold the 3.5% Notes (and the Underlying Common Stock)
indefinitely unless they are registered with the SEC and qualified by state
authorities, or an exemption from such registration and qualification
requirements is available. The Holder further acknowledges that if an exemption
from registration or qualification is available, it may be conditioned on
various requirements including, but not limited to, the time and manner of sale,
the holding period for the 3.5% Notes (and the Underlying Common Stock), and on
requirements relating to the Company which may be outside the Holder’s control,
and which, except as set forth in the Registration Rights Agreement, the Company
is under no obligation and may not be able to satisfy.

Section 2.7 No Public Market. The Holder understands that no public market now
exists for the 3.5% Notes, and that the Company has made no assurance that a
public market will ever exist for the 3.5% Notes.

Section 2.8 Legends. The Holder understands that the 3.5% Notes and any shares
of Underlying Common Stock will bear one or more of the legends required by the
Indenture, and the removal of such legends shall be governed by the terms of the
Indenture.

Section 2.9 Affiliate Status. The Holder is not, and has not been during the
preceding three months, an “affiliate” of the Company as such term is defined in
Rule 144 under the Securities Act.

 

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ARTICLE III

Representations, Warranties and Covenants of the Company

The Company hereby makes the following representations, warranties, and
covenants each of which is true and correct on the date hereof and shall survive
the date of the Closing and the transactions contemplated hereby to the extent
set forth herein.

Section 3.1 Existence and Power.

(a) The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has the power, authority
and capacity to execute and deliver this Agreement, to perform the Company’s
obligations hereunder, and to consummate the transactions contemplated hereby.

(b) The execution of this Agreement by the Company and the consummation by the
Company of the transactions contemplated hereby (i) does not require the
consent, approval, authorization, order, registration or qualification of, or
filing with, any governmental authority or court, or body or arbitrator having
jurisdiction over the Company other than as contemplated in the Registration
Rights Agreement, state securities regulators, the Nasdaq Global Select Market,
The Depository Trust Company and The PORTAL Market; and (ii) does not and will
not constitute or result in a breach, violation or default under any note, bond,
mortgage, deed, indenture, lien, instrument, contract, agreement, lease or
license, whether written or oral, express or implied, or with the Company’s
Certificate of Incorporation or by-laws, or any statute, law, ordinance, decree,
order, injunction, rule, directive, judgment or regulation of any court,
administrative or regulatory body, governmental authority, arbitrator, mediator
or similar body on the part of the Company or on the part of any other party
thereto or cause the acceleration or termination of any obligation or right of
the Company or any other party thereto.

Section 3.2 Valid and Enforceable Agreement; Authorization. This Agreement has
been duly executed and delivered by the Company and constitutes a legal, valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except that such enforcement may be subject to
(a) bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting or relating to enforcement of creditors’ rights generally, and
(b) general principles of equity.

Section 3.3 Capitalization. At the Closing, the authorized capital stock of the
Company will consist of 150,000,000 shares of Common Stock, par value $0.001 per
share, and 1,000,000 shares of Preferred Stock, par value $0.001 per share. As
of the close of business on December 11, 2006, there were 100,610,772 shares of
Common Stock issued and outstanding. All such issued and outstanding shares have
been duly authorized and validly issued, and are fully paid and non-assessable,
and were issued in compliance with all applicable state and federal laws
concerning the issuance of securities and all applicable pre-emptive,
participation, rights of first refusal and other similar rights.

 

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Section 3.4 Valid Issuance of the 3.5% Notes. The 3.5% Notes, when issued, sold
and delivered in accordance with the terms and for the consideration set forth
in this Agreement and the Indenture, will constitute legal and binding
obligations of the Company, be validly issued and free of restrictions on
transfer other than restrictions on transfer under this Agreement, applicable
state and federal securities laws and liens or encumbrances created by or
imposed by the Holder, and enforceable against the Company in accordance with
their terms, except that such enforcement may be limited by (a) bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting or
relating to enforcement of creditors’ rights generally, and (b) general
principles of equity. Assuming the accuracy of the representations of the Holder
in Section 2 of this Agreement and subject to the filing of Form D pursuant to
Regulation D under the Securities Act and state securities laws, the 3.5% Notes
will be issued in compliance in all material respects with all applicable
federal and state securities laws. The Underlying Common Stock has been duly
reserved for issuance, and upon issuance in accordance with the terms of the
Company’s Certificate of Incorporation, as amended, will be validly issued,
fully paid and nonassessable and free of restrictions on transfer other than
restrictions on transfer under applicable federal and state securities laws and
liens or encumbrances created by or imposed by the Holder. Based in part upon
the representations of the Holder in Section 2 of this Agreement, the 3.5% Notes
and the Underlying Common Stock, when issued and delivered in accordance with
the terms of the 3.5% Notes and the Indenture, will be issued in compliance in
all material respects with all applicable federal and state securities laws.

Section 3.5 Financial Statements. Except as qualified in the SEC Documents, the
audited and unaudited financial statements and schedules included in the SEC
Documents, present fairly in all material respects the consolidated financial
position of the Company and its subsidiaries as of the dates indicated and the
consolidated results of operations and cash flows of the Company and its
subsidiaries for the periods specified; except as qualified in the SEC
Documents, such financial statements and schedules have been prepared in
conformity with generally accepted accounting principles applied on a consistent
basis during the periods involved.

Section 3.6 Legal Proceedings. No legal or governmental proceedings or
investigations are pending or, to the knowledge of the Company, threatened to
which the Company is a party or to which the property of the Company or any of
its subsidiaries is subject that are not described in the SEC Documents, except
for such proceedings or investigations which would not reasonably be expected
to, singly or in the aggregate, result in a Material Adverse Effect. As used in
this Agreement, the term “Material Adverse Effect” shall mean when used in
respect of any matter relating to the Company a material adverse effect on the
business, condition (financial or otherwise), properties or results of
operations of the Company and its subsidiaries, considered as one enterprise, or
would materially adversely affect the ability of the Company to perform its
obligations under this Agreement, the Indenture, the Registration Rights
Agreement and the 3.5% Notes.

Section 3.7 Compliance with Laws; Permits. The Company and its subsidiaries
possess all certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct their
respective businesses, except where the failure to have such certificates,
authorizations and permits would not reasonably be expected to have a Material
Adverse Effect, and none of the Company and its subsidiaries has received any

 

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notice of proceedings relating to the revocation or modification of any such
certificate, authorization or permit which would reasonably be expected to,
singly or in the aggregate, result in a Material Adverse Effect. The Company and
its subsidiaries are and have been in compliance with all applicable laws,
statutes, ordinances, rules, regulations, orders, judgments, decisions, decrees,
standards, and requirements relating to their respective businesses, except
where any such non-compliance would not reasonably be expected to have a
Material Adverse Effect.

Section 3.8 No Material Adverse Effect. Since the respective dates as of which
information is given in the SEC Documents, there has not been any event or
occurrence having a Material Adverse Effect on the Company or its subsidiaries,
except as reflected or disclosed in a subsequent SEC Document.

ARTICLE IV

Miscellaneous Provisions

Section 4.1 Notice. Any notice provided for in this Agreement shall be in
writing and shall be either personally delivered, or mailed first class mail
(postage prepaid) with return receipt requested or sent by reputable overnight
courier service (charges prepaid) to such address and to the attention of such
person as the recipient party has specified by prior written notice to the
sending party. Notices will be deemed to have been given hereunder when
delivered personally, three business days after deposit in the U.S. mail postage
prepaid with return receipt requested and two business days after deposit
postage prepaid with a reputable overnight courier service for delivery on the
next business day.

Section 4.2 Entire Agreement. This Agreement and the other documents and
agreements executed in connection with the Transaction embody the entire
agreement and understanding of the parties hereto with respect to the subject
matter hereof and supersede all prior and contemporaneous oral or written
agreements, representations, warranties, contracts, correspondence,
conversations, memoranda and understandings between or among the parties or any
of their agents, representatives or affiliates relative to such subject matter,
including, without limitation, any term sheets, emails or draft documents.

Section 4.3 Assignment; Binding Agreement. This Agreement and the various rights
and obligations arising hereunder shall inure to the benefit of and be binding
upon the parties hereto and their successors and assigns.

Section 4.4 Counterparts. This Agreement may be executed in multiple
counterparts, and on separate counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument. Any counterpart or other signature hereupon delivered by facsimile
shall be deemed for all purposes as constituting good and valid execution and
delivery of this Agreement by such party.

Section 4.5 Remedies Cumulative. Except as otherwise provided herein, all rights
and remedies of the parties under this Agreement are cumulative and without
prejudice to any other rights or remedies available at law.

 

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Section 4.6 Governing Law. This Agreement shall in all respects be construed in
accordance with and governed by the substantive laws of the State of New York,
without reference to its choice of law rules.

Section 4.7 No Third Party Beneficiaries or Other Rights. Nothing herein shall
grant to or create in any person not a party hereto, or any such person’s
dependents or heirs, any right to any benefits hereunder, and no such party
shall be entitled to sue any party to this Agreement with respect thereto.

Section 4.8 Waiver; Consent. This Agreement may not be changed, amended,
terminated, augmented, rescinded or discharged (other than in accordance with
its terms), in whole or in part, except by a writing executed by the parties
hereto. No waiver of any of the provisions or conditions of this Agreement or
any of the rights of a party hereto shall be effective or binding unless such
waiver shall be in writing and signed by the party claimed to have given or
consented thereto. Except to the extent otherwise agreed in writing, no waiver
of any term, condition or other provision of this Agreement, or any breach
thereof shall be deemed to be a waiver of any other term, condition or provision
or any breach thereof, or any subsequent breach of the same term, condition or
provision, nor shall any forbearance to seek a remedy for any noncompliance or
breach be deemed to be a waiver of a party’s rights and remedies with respect to
such noncompliance or breach.

Section 4.9 Word Meanings. The words such as “herein”, “hereinafter”, “hereof”,
and “hereunder” refer to this Agreement as a whole and not merely to a
subdivision in which such words appear unless the context otherwise requires.
The singular shall include the plural, and vice versa, unless the context
otherwise requires. The masculine shall include the feminine and neuter, and
vice versa, unless the context otherwise requires.

Section 4.10 No Broker. Neither party has engaged any third party as broker or
finder or incurred or become obligated to pay any broker’s commission or
finder’s fee in connection with the transactions contemplated by this Agreement
other than such fees and expenses for which it shall be solely responsible.

Section 4.11 Further Assurances. The Holder and the Company each hereby agree to
execute and deliver, or cause to be executed and delivered, such other
documents, instruments and agreements, and take such other actions, as either
party may reasonably request in connection with the transactions contemplated by
this Agreement.

Section 4.12 Costs and Expenses. The Holder and the Company shall each pay their
own respective costs and expenses incurred in connection with the negotiation,
preparation, execution and performance of this Agreement, including, but not
limited to, attorneys’ fees.

Section 4.13 Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

Section 4.14 Severability. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions contained
herein shall not be affected or impaired thereby.

 

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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed as of the date first above written.

 

HOLDER: By:  

 

Name:   Title:   THE COMPANY: CREDENCE SYSTEMS CORPORATION By:  

 

Name:   Title:  

Signature Page to Exchange and Release Agreement

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Exhibit A

Form of Indenture

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Exhibit B

Form of Registration Rights Agreement

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Exhibit C

Form of Opinion of Morrison Foerster LLP

 

  1. The Company has been duly incorporated and is an existing corporation in
good standing under the laws of the State of Delaware with corporate power and
authority to own its properties and conduct its business as described in the
Company’s most recent filing on Form 10-K with the Securities and Exchange
Commission (the “SEC”).

 

  2. The Company is duly qualified as a foreign corporation for the transaction
of business and is in good standing in the States of [            ].

 

  3. The Company has an authorized equity capitalization as set forth in its
Amended and Restated Certificate of Incorporation, filed as Exhibit 3.1 to the
Company’s Form 10-Q for the quarter ended April 30, 2000.

 

  4. The shares of Common Stock initially issuable upon conversion of the 3.5%
Notes (the “Conversion Shares”) have been duly authorized and reserved for
issuance upon such conversion and, when issued and delivered in accordance with
the provisions of the 3.5% Notes and the Indenture, will be duly and validly
issued and fully paid and non-assessable. The stockholders of the Company have
no preemptive rights with respect to the issuance of the Conversion Shares under
the Certificate of Incorporation, Bylaws or DGCL.

 

  5. The Exchange and Purchase Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms.

 

  6. The 3.5% Notes being issued on the date hereof have been duly authorized by
the Company and, when executed by the Company and authenticated by the Trustee
in the manner provided for in the Indenture and issued and delivered to the
Holder in accordance with the terms of the Exchange and Purchase Agreement, will
constitute valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms and will be entitled to the benefits of
the Indenture.

 

  7. The Indenture has been duly authorized, executed and delivered by the
Company and constitutes a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms.

 

  8. The Registration Rights Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms.

 

  9. The issuance and sale of the 3.5% Notes being delivered on the date hereof,
the issuance of the Conversion Shares, if any (assuming conversion on the

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date hereof pursuant to the terms of the 3.5% Notes) and the performance by the
Company of its obligations under the Indenture, the 3.5% Notes and the Exchange
and Purchase Agreement and the consummation of the transactions therein
contemplated do not conflict with and did not result in a breach or violation by
the Company of any of the terms or provisions of, or constitute a default under
any Reviewed Agreement listed on Exhibit A hereto, nor will such actions result
in any violation by the Company of (i) the Certificate of Incorporation or the
Bylaws, (ii) any U.S. federal or New York or Delaware (under the DGCL) state
statute applicable to the Company, (iii) any rule or any regulation known to us
of any U.S. federal or New York or Delaware (under the DGCL) state court or
governmental agency or body having jurisdiction over the Company or any of its
properties, or (iv) any order, judgment or decree known to us to which the
Company is a party.

 

  10. No consent, approval, authorization, order, registration or qualification
of or with any U.S. federal or Delaware (under the DGCL) state court or
governmental agency or body is required for the issue and sale of the 3.5% Notes
on the date hereof or the consummation by the Company of the transactions
contemplated by the Exchange and Purchase Agreement or the Indenture, except as
may be expressly contemplated by the Exchange and Purchase Agreement, the
Indenture, 3.5% Notes and the Registration Rights Agreement.

 

  11. Assuming the filing of a Form D in accordance with Regulation D under the
Securities Act, no registration of the 3.5% Notes or the Conversion Shares under
the Securities Act is required for the offer, sale and delivery of the 3.5%
Notes by the Company to the Holder pursuant to the Exchange and Purchase
Agreement (it being understood that no opinion is expressed as to any resale of
the 3.5% Notes or the Conversion Shares).