Exhibit 10.2

EXECUTION COPY

CREDENCE SYSTEMS CORPORATION

3.50% Convertible Senior Subordinated Notes Due May 15, 2010

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into
as of December 20, 2006 by and among Credence Systems Corporation, a Delaware
corporation (the “Company”), and the initial purchasers of the Company’s Notes
(as defined below) named in Exhibit A hereto (each, an “Initial Purchaser” and,
collectively, the “Initial Purchasers”), pursuant to those certain Exchange and
Purchase Agreements, each dated as of December 15, 2006 between the Company and
each of the Initial Purchasers (each, an “Exchange Agreement” and, collectively,
the “Exchange Agreements”). In order to induce each Initial Purchaser to enter
into an Exchange Agreement, the Company has agreed to provide the registration
rights set forth in this Agreement. The execution of this Agreement is a
condition to the closing under each Exchange Agreement.

1. Certain Definitions.

For purposes of this Registration Rights Agreement, the following terms shall
have the following meanings:

(a) “Additional Amounts” has the meaning assigned thereto in Section 2(d).

(b) “Additional Amounts Payment Date” has the meaning assigned thereto in
Section 2(d).

(c) “Affiliate” shall have the meaning specified in Rule 405 under the
Securities Act and the terms “controlling” and “controlled” shall have meanings
correlative thereto.

(d) “Agreement” has the meaning specified in the first paragraph of this
Agreement.

(e) “Applicable Conversion Price” means, as of any date of determination, $1,000
divided by the Conversion Rate in effect as of such date of determination.

(f) “Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday
that is not a day on which banking institutions in The City of New York are
authorized or obligated by law or executive order to close.

(g) “Closing Date” means the date on which the Notes are initially issued.

 

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(h) “Commission” means the Securities and Exchange Commission, or any other
federal agency at the time administering the Exchange Act or the Securities Act,
whichever is the relevant statute for the particular purpose.

(i) “Company” has the meaning specified in the first paragraph of this
Agreement.

(j) “Conversion Rate” shall have the meaning assigned such term in the
Indenture.

(k) “Deferral Notice” has the meaning assigned thereto in Section 3(b).

(l) “Deferral Period” has the meaning assigned thereto in Section 3(b).

(m) “Effective Period” has the meaning assigned thereto in Section 2(a).

(n) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.

(o) “Exchange Agreements” has the meaning specified in the first paragraph of
this Agreement.

(p) “Holder” means each holder, from time to time, of Registrable Securities
(including the Initial Purchasers).

(q) “Indenture” means the Indenture dated as of December 20, 2006 between the
Company and The Bank of New York Trust Company, N.A., as Trustee, pursuant to
which the Notes are being issued.

(r) “Initial Placements” means the initial placement of the Securities pursuant
to the terms of the Exchange Agreement.

(s) “Initial Purchasers” has the meaning specified in the first paragraph of
this Agreement.

(t) “Losses” has the meaning assigned thereto in Section 6(d).

(u) “Material Event” has the meaning assigned thereto in Section 3(a)(iv).

(v) “Majority Holders” shall mean, on any date, holders of the majority of the
Shares constituting Registrable Securities; for the purposes of this definition,
Holders of Notes constituting Registrable Securities shall be deemed to be the
Holders of the number of Shares into which such Notes are or would be
convertible as of such date.

(w) “NASD” shall mean the National Association of Securities Dealers, Inc.

 

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(x) “NASD Rules” shall mean the Conduct Rules and the By-Laws of the NASD.

(y) “Notes” means the 3.50% Convertible Subordinated Notes Due May 15, 2010, to
be issued under the Indenture and sold by the Company to the Initial Purchasers.

(z) “Notice Holder” means, on any date, any Holder that has delivered a Selling
Securityholder Questionnaire to the Company on or prior to such date.

(aa) “Person” means a corporation, association, partnership, organization,
business, individual, government or political subdivision thereof or
governmental agency.

(bb) “Prospectus” means the prospectus included in any Shelf Registration
Statement, as amended or supplemented by any amendment or prospectus supplement,
including post-effective amendments, and all materials incorporated by reference
or explicitly deemed to be incorporated by reference in such Prospectus.

(cc) “Registrable Securities” means the Securities; provided, however, that such
Securities shall cease to be Registrable Securities when (i) in the
circumstances contemplated by Section 2(a), a registration statement registering
such Securities under the Securities Act has been declared or becomes effective
and such Securities have been sold or otherwise transferred by the Holder
thereof pursuant to such effective registration statement; (ii) such Securities
are sold pursuant to Rule 144 under circumstances in which any legend borne by
such Securities relating to restrictions on transferability thereof, under the
Securities Act or otherwise, is removed or such Securities are eligible to be
sold pursuant to Rule 144(k) or any successor provision; or (iii) such
Securities shall cease to be outstanding (including, in the case of the Notes,
upon conversion into Shares).

(dd) “Registration Default” has the meaning assigned thereto in Section 2(d).

(ee) “Registration Expenses” has the meaning assigned thereto in Section 5.

(ff) “Rule 144,” “Rule 405” and “Rule 415” means, in each case, such rule as
promulgated under the Securities Act.

(gg) “Securities” means, collectively, the Notes and the Shares.

(hh) “Securities Act” means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.

(ii) “Selling Securityholder Questionnaire” means the form of Selling
Securityholder Questionnaire attached as Exhibit B hereto.

 

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(jj) “Shares” means the shares of common stock of the Company, par value $0.001
per share, into which the Notes are convertible or that have been issued upon
any conversion from Notes into common stock of the Company.

(kk) “Shelf Registration Statement” means the shelf registration statement
referred to in Section 2(a), as amended or supplemented by any amendment or
supplement, including post-effective amendments, and all materials incorporated
by reference or explicitly deemed to be incorporated by reference in such Shelf
Registration Statement.

(ll) “Trust Indenture Act” means the Trust Indenture Act of 1939, or any
successor thereto, and the rules, regulations and forms promulgated thereunder,
all as the same shall be amended from time to time.

(mm) “Trustee” shall have the meaning assigned such term in the Indenture.

Unless the context otherwise requires, any reference herein to a “Section” or
“clause” refers to a Section or clause, as the case may be, of this Agreement,
and the words “herein,” “hereof” and “hereunder” and other words of similar
import refer to this Agreement as a whole and not to any particular Section or
other subdivision. Unless the context otherwise requires, any reference to a
statute, rule or regulation refers to the same (including any successor statute,
rule or regulation thereto) as it may be amended from time to time.

2. Registration Under the Securities Act.

(a) The Company agrees to file under the Securities Act as promptly as
practicable but in any event within 30 days after the Closing Date a Shelf
Registration Statement providing for the registration of, and the sale on a
continuous or delayed basis by the Holders of, all of the Registrable
Securities, pursuant to Rule 415 or any similar rule that may be adopted by the
Commission. The Company agrees to use its reasonable best efforts to cause the
Shelf Registration Statement to become or be declared effective within 90 days
after the Closing Date and to keep such Shelf Registration Statement
continuously effective until the earliest of (i) the second anniversary of the
Closing Date or, (ii) the date on which all Notes and Shares may be sold by
non-affiliates of the Company pursuant to paragraph (k) of Rule 144 (or any
successor provision) promulgated under the Securities Act, and (iii) such time
as there are no longer any Registrable Securities outstanding (the “Effective
Period”). None of the Company’s securityholders (other than Holders of
Registrable Securities) shall have the right to include any of the Company’s
securities in the Shelf Registration Statement.

(b) The Company further agrees that it shall cause the Shelf Registration
Statement and the related Prospectus and any amendment or supplement thereto, as
of the effective date of the Shelf Registration Statement or such amendment or
supplement, (i) to comply in all material respects with the applicable
requirements of the Securities Act; and (ii) not to contain any untrue statement
of a material fact or omit to state a material

 

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fact required to be stated therein or necessary in order to make the statements
therein (in the case of the Prospectus, in the light of the circumstances under
which they were made) not misleading, and the Company agrees to furnish to the
Holders of the Registrable Securities copies of any supplement or amendment
prior to its being used or promptly following its filing with the Commission. If
the Shelf Registration Statement, as amended or supplemented from time to time,
ceases to be effective for any reason at any time during the Effective Period
(other than because all Registrable Securities registered thereunder shall have
been sold pursuant thereto or shall have otherwise ceased to be Registrable
Securities), the Company shall use its reasonable best efforts to obtain the
prompt withdrawal of any order suspending the effectiveness thereof.

(c) Each Holder of Registrable Securities agrees that if such Holder wishes to
sell Registrable Securities pursuant to the Shelf Registration Statement and
related Prospectus, it will do so only in accordance with this Section 2(c) and
Section 3(b). Each Holder of Registrable Securities wishing to sell Registrable
Securities pursuant to the Shelf Registration Statement and related Prospectus
agrees to deliver a Selling Securityholder Questionnaire to the Company at least
ten (10) days prior to any intended distribution of Registrable Securities under
the Shelf Registration Statement. From and after the date the Shelf Registration
Statement is declared effective, the Company shall, as promptly as is
practicable after the date a Selling Securityholder Questionnaire is delivered,
and in any event within ten (10) days after such date, (i) if required by
applicable law, file with the Commission a post-effective amendment to the Shelf
Registration Statement or prepare and, if required by applicable law, file a
supplement to the related Prospectus or a supplement or amendment to any
document incorporated therein by reference or file any other required document
so that the Holder delivering such Selling Securityholder Questionnaire is named
as a selling security holder in the Shelf Registration Statement and the related
Prospectus in such a manner as to permit such Holder to deliver such Prospectus
to purchasers of the Registrable Securities in accordance with applicable law
and, if the Company shall file a post-effective amendment to the Shelf
Registration Statement, use its reasonable efforts to cause such post-effective
amendment to be declared effective under the Securities Act as promptly as is
practicable; (ii) provide such Holder copies of any documents filed pursuant to
Section 2(c)(i); and (iii) notify such Holder as promptly as practicable after
the effectiveness under the Securities Act of any post-effective amendment filed
pursuant to Section 2(c)(i); provided that if such Selling Securityholder
Questionnaire is delivered during a Deferral Period, the Company shall so inform
the Holder delivering such Selling Securityholder Questionnaire and shall take
the actions set forth in clauses (i), (ii) and (iii) above upon expiration of
the Deferral Period in accordance with Section 3(b). Notwithstanding anything
contained herein to the contrary, the Company shall be under no obligation to
name any Holder that is not a Notice Holder as a selling securityholder in any
Shelf Registration Statement or related Prospectus; provided, however, that any
Holder that becomes a Notice Holder pursuant to the provisions of this
Section 2(c) (whether or not such Holder was a Notice Holder at the time the
Shelf Registration Statement was declared effective) shall be named as a selling
securityholder in the Shelf Registration Statement or related Prospectus in
accordance with the requirements of this Section 2(c).

 

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(d) If any of the following events (any such event a “Registration Default”)
shall occur, then liquidated damages (the “Additional Amounts”) shall become
payable to Holders in respect of the Notes as follows:

(i) if the Shelf Registration Statement is not filed with the Commission within
30 days following the Closing Date, then commencing on the 31st day after the
Closing Date, Additional Amounts shall accrue on the principal amount of the
outstanding Notes that are Registrable Securities at a rate of 0.25% per annum
for the first 90 days following such 31st day and at a rate of 0.50% per annum
thereafter; or

(ii) if the Shelf Registration Statement is not declared effective by the
Commission within 90 days following the Closing Date, then commencing on the
91st day after the Closing Date, Additional Amounts shall accrue on the
principal amount of the outstanding Notes that are Registrable Securities at a
rate of 0.25% per annum for the first 90 days following such 91st day and at a
rate of 0.50% per annum thereafter; or

(iii) if the Company has failed to perform its obligations set forth in
Section 2(c) hereof within the time periods required therein, provided that the
failure of the Company is not due to the failure of a Holder of Registrable
Securities to perform its obligations set forth in Section 2(c) hereof within
the time periods specified therein, then commencing on the first day after the
date by which the Company was required to perform such obligations, Additional
Amounts shall accrue on the principal amount of the outstanding Notes that are
Registrable Securities and at a rate of 0.25% per annum for the first 90 days
and at a rate of 0.50% per annum thereafter;

(iv) if the Shelf Registration Statement has been declared effective but such
Shelf Registration Statement ceases to be effective at any time during the
Effective Period (other than pursuant to Section 3(b) hereof), then commencing
on the day such Shelf Registration Statement ceases to be effective, Additional
Amounts shall accrue on the principal amount of the outstanding Notes that are
Registrable Securities at a rate of 0.25% per annum for the first 90 days
following such date on which the Shelf Registration Statement ceases to be
effective and at a rate of 0.50% per annum thereafter; or

(v) if the aggregate duration of Deferral Periods in any period exceeds the
number of days permitted in respect of such period pursuant to Section 3(b)
hereof, then commencing on the day the aggregate duration of Deferral Periods in
any period exceeds the number of days permitted in respect of such period (and
again on the first day of any subsequent Deferral Period during such period),

 

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Additional Amounts shall accrue on the principal amount of the outstanding Notes
that are Registrable Securities at a rate of 0.25% per annum for the first 90
days and at a rate of 0.50% per annum thereafter;

provided, however, that the Additional Amounts rate on the Notes shall not
exceed in the aggregate 0.50% per annum and shall not be payable under more than
one clause above for any given period of time, except that if Additional Amounts
would be payable under more than one clause above, but at a rate of 0.25% per
annum under one clause and at a rate of 0.50% per annum under the other, then
the Additional Amounts rate shall be the higher rate of 0.50% per annum;
provided further, however, that (1) upon the filing of the Shelf Registration
Statement (in the case of clause (i) above), (2) upon the effectiveness of the
Shelf Registration Statement (in the case of clause (ii) above), (3) upon the
Company’s performing its obligations set forth in Section 2(c) hereof within the
time periods required therein (in the case of clause (iii) above), (4) upon the
effectiveness of the Shelf Registration Statement which had ceased to remain
effective (in the case of clause (iv) above), (5) upon the termination of the
Deferral Period that caused the limit on the aggregate duration of Deferral
Periods in a period set forth in Section 3(b) to be exceeded (in the case of
clause (v) above) or (6) upon the termination of certain transfer restrictions
on the Securities as a result of the application of Rule 144(k) or any successor
provision, Additional Amounts on the Notes as a result of such clause, as the
case may be, shall cease to accrue.

Additional Amounts on the Notes, if any, will be payable in cash on May 15 and
November 15 of each year (the “Additional Amounts Payment Date”) to holders of
record of outstanding Registrable Securities on each of the next preceding May 1
and November 1. Following the cure of all Registration Defaults requiring the
payment of Additional Amounts by the Company to the Holders of Registrable
Securities pursuant to this Section, the accrual of Additional Amounts will
cease (without in any way limiting the effect of any subsequent Registration
Default requiring the payment of Additional Amounts by the Company).

If a Holder has converted some or all of its Notes into Common Stock, the Holder
will not be entitled to receive any Additional Amounts with respect to such
Common Stock or the principal amount of the Notes that have been so converted.
In addition, in no event will Additional Amounts be payable in connection with a
Registration Default relating to a failure to register the Common Stock
deliverable upon conversion of the Notes. For the avoidance of doubt, if the
Company fails to register both the Notes and the Common Stock deliverable upon
conversion of the Notes, then Additional Amounts will be payable solely in
connection with the Registration Default relating to the failure to register of
the Notes.

The Trustee shall be entitled, on behalf of Holders of Securities, to seek any
available remedy for the enforcement of this Agreement, including for the
payment of any Additional Amounts. Notwithstanding the foregoing, the parties
agree that the sole monetary damages payable for a violation of the terms of
this Agreement with

 

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respect to which liquidated damages are expressly provided shall be as set forth
in this Section 2(d). Nothing shall preclude a Notice Holder or Holder of
Registrable Securities from pursuing or obtaining specific performance or other
equitable relief with respect to this Agreement.

3. Registration Procedures.

The following provisions shall apply to the Shelf Registration Statement filed
pursuant to Section 2:

(a) The Company shall:

(i) prepare and file with the Commission a registration statement with respect
to the shelf registration on any form which may be utilized by the Company and
which shall permit the disposition of the Registrable Securities in accordance
with the intended method or methods thereof, as specified in writing by the
Holders of the Registrable Securities, and use its reasonable efforts to cause
such registration statement to become effective in accordance with Section 2(a)
above;

(ii) before filing any Shelf Registration Statement or Prospectus or any
amendments or supplements thereto with the Commission, furnish to the Initial
Purchasers copies of all such documents proposed to be filed with the
Commission;

(iii) use its reasonable efforts to prepare and file with the Commission such
amendments and post-effective amendments to the Shelf Registration Statement and
file with the Commission any other required document as may be necessary to keep
such Shelf Registration Statement continuously effective until the expiration of
the Effective Period; cause the related Prospectus to be supplemented by any
required Prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 (or any similar provisions then in force) under the Securities Act; and
comply with the provisions of the Securities Act applicable to it with respect
to the disposition of all Securities covered by such Shelf Registration
Statement during the Effective Period in accordance with the intended methods of
disposition by the sellers thereof set forth in such Shelf Registration
Statement as so amended or such Prospectus as so supplemented;

(iv) promptly notify the Notice Holders of Registrable Securities (A) when such
Shelf Registration Statement or the Prospectus included therein or any amendment
or supplement to the Prospectus or post-effective amendment has been filed with
the Commission, and, with respect to such Shelf Registration Statement or any
post-effective amendment, when the same has become effective, (B) of any
request, following the effectiveness of the Shelf Registration Statement, by the
Commission or any other Federal or state governmental

 

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authority for amendments or supplements to the Shelf Registration Statement or
related Prospectus or for additional information, (C) of the issuance by the
Commission of any stop order suspending the effectiveness of such Shelf
Registration Statement or the initiation or written threat of any proceedings
for that purpose, (D) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Registrable Securities for
sale in any jurisdiction or the initiation or written threat of any proceeding
for such purpose, (E) of the occurrence of (but not the nature of or details
concerning) any event or the existence of any fact (a “Material Event”) as a
result of which any Shelf Registration Statement shall contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, or
any Prospectus shall contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (provided, however, that no notice by the Company shall be
required pursuant to this clause (E) in the event that the Company either
promptly files a Prospectus supplement to update the Prospectus or a Form 8-K or
other appropriate Exchange Act report that is incorporated by reference into the
Shelf Registration Statement, which, in either case, contains the requisite
information with respect to such Material Event that results in such Shelf
Registration Statement no longer containing any untrue statement of material
fact or omitting to state a material fact necessary to make the statements
contained therein not misleading), (F) of the determination by the Company that
a post-effective amendment to the Shelf Registration Statement will be filed
with the Commission, which notice may, at the discretion of the Company (or as
required pursuant to Section 3(b)), state that it constitutes a Deferral Notice,
in which event the provisions of Section 3(b) shall apply or (G) at any time
when a Prospectus is required to be delivered under the Securities Act, that the
Shelf Registration Statement, Prospectus, Prospectus amendment or supplement or
post-effective amendment does not conform in all material respects to the
applicable requirements of the Securities Act and the Trust Indenture Act and
the rules and regulations of the Commission thereunder;

(v) prior to any public offering of the Registrable Securities pursuant to the
Shelf Registration Statement, use reasonable efforts to register or qualify or
cooperate with the Notice Holders in connection with the registration or
qualification (or exemption from such registration or qualification) of such
Registrable Securities for offer and sale under the securities or Blue Sky laws
of such jurisdictions within the United States as any Notice Holder reasonably
requests in writing (which request may be included in the Selling Securityholder
Questionnaire); prior to any public offering of the Registrable Securities
pursuant to the Shelf Registration Statement, use its reasonable efforts to keep
each such registration or qualification (or exemption therefrom) effective
during the Effective Period in connection with such Notice Holder’s offer and
sale of Registrable Securities pursuant to such registration or qualification
(or exemption

 

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therefrom) and do any and all other acts or things necessary or advisable to
enable the disposition in such jurisdictions of such Registrable Securities in
the manner set forth in the Shelf Registration Statement and the related
Prospectus; provided, that the Company will not be required to (i) qualify as a
foreign corporation or as a dealer in securities in any jurisdiction where it
would not otherwise be required to qualify but for this Agreement or (ii) take
any action that would subject it to general service of process in suits or to
taxation in any such jurisdiction where it is not then so subject;

(vi) use its reasonable best efforts to prevent the issuance of, and if issued,
to obtain the withdrawal of any order suspending the effectiveness of the Shelf
Registration Statement or any post-effective amendment thereto, and to lift any
suspension of the qualification of any of the Registrable Securities for sale in
any jurisdiction in which they have been qualified for sale, in each case at the
earliest practicable date;

(vii) upon reasonable notice, for a reasonable period prior to the filing of the
Shelf Registration Statement, and throughout the Effective Period, make
available at reasonable times at the Company’s principal place of business or
such other reasonable place for inspection by a representative appointed by the
Notice Holders in connection with an underwritten offering (or any underwriter,
placement agent or counsel acting on their behalf), who shall certify to the
Company that they have a current intention to sell their Registrable Securities
pursuant to the Shelf Registration Statement, such financial and other
information and books and records of the Company, and cause the officers,
directors, employees and independent certified public accountants of the Company
to respond to such inquiries, as shall be reasonably necessary, in the judgment
of the counsel to such Notice Holders, to conduct a reasonable “due diligence”
investigation; provided, however, that each such representative appointed by the
Notice Holders in connection with an underwritten offering shall be required to
maintain in confidence and not to disclose to any other Person any information
or records reasonably designated by the Company in writing as being
confidential, until such time as (A) such information becomes a matter of public
record (whether by virtue of its inclusion in the Shelf Registration Statement
or otherwise) or (B) such Person shall be required so to disclose such
information pursuant to a subpoena or order of any court or other governmental
agency or body having jurisdiction over the matter (subject to the requirements
of such order, and only after such Person shall have given the Company prompt
prior written notice of such requirement and the opportunity to contest the same
or seek an appropriate protective order);

(viii) if reasonably requested by any Initial Purchaser or any Notice Holder,
promptly incorporate in a Prospectus supplement or post-effective amendment to
the Shelf Registration Statement such information as such Initial Purchaser or
such Notice Holder shall, on the basis of a written opinion of

 

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nationally-recognized counsel experienced in such matters, determine to be
required to be included therein by applicable law and make any required filings
of such Prospectus supplement or such post-effective amendment; provided, that
the Company shall not be required to take any actions under this
Section 3(a)(viii) that are not, in the reasonable opinion of counsel for the
Company, in compliance with applicable law;

(ix) promptly furnish to each Notice Holder and the Initial Purchasers, upon
their request and without charge, at least one (1) conformed copy of the Shelf
Registration Statement and any amendments thereto, including financial
statements but excluding schedules, all documents incorporated or deemed to be
incorporated therein by reference and all exhibits (unless requested in writing
to the Company by such Notice Holder or the Initial Purchasers, as the case may
be); and

(x) during the Effective Period, deliver to each Notice Holder in connection
with any sale of Registrable Securities pursuant to the Shelf Registration
Statement, without charge, as many copies of the Prospectus relating to such
Registrable Securities (including each preliminary prospectus) and any amendment
or supplement thereto as such Notice Holder may reasonably request; and the
Company hereby consents (except during such periods that a Deferral Notice is
outstanding and has not been revoked) to the use of such Prospectus or each
amendment or supplement thereto by each Notice Holder in connection with any
offering and sale of the Registrable Securities covered by such Prospectus or
any amendment or supplement thereto in the manner set forth therein.

(b) Upon (A) the issuance by the Commission of a stop order suspending the
effectiveness of the Shelf Registration Statement or the initiation of
proceedings with respect to the Shelf Registration Statement under Section 8(d)
or 8(e) of the Securities Act, (B) the occurrence of any event or the existence
of any Material Event as a result of which the Shelf Registration Statement
shall contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, or any Prospectus shall contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or (C) the occurrence or existence
of any corporate development that, in the discretion of the Company, makes it
appropriate to suspend the availability of the Shelf Registration Statement and
the related Prospectus, the Company will (i) in the case of clause (B) above,
subject to the third sentence of this provision, as promptly as practicable
prepare and file a post-effective amendment to such Shelf Registration Statement
or a supplement to the related Prospectus or any document incorporated therein
by reference or file any other required document that would be incorporated by
reference into such Shelf Registration Statement and Prospectus so that such
Shelf Registration Statement does not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make

 

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the statements therein not misleading, and such Prospectus does not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, as thereafter
delivered to the purchasers of the Registrable Securities being sold thereunder,
and, in the case of a post-effective amendment to the Shelf Registration
Statement, subject to the third sentence of this provision, use reasonable
efforts to cause it to be declared effective as promptly as is practicable, and
(ii) give notice to the Notice Holders that the availability of the Shelf
Registration Statement is suspended (a “Deferral Notice”). Upon receipt of any
Deferral Notice, each Notice Holder agrees not to sell any Registrable
Securities pursuant to the Shelf Registration Statement until such Notice
Holder’s receipt of copies of the supplemented or amended Prospectus provided
for in clause (i) above, or until it is advised in writing by the Company that
the Prospectus may be used, and has received copies of any additional or
supplemental filings that are incorporated or deemed incorporated by reference
in such Prospectus. The Company will use commercially reasonable efforts to
ensure that the use of the Prospectus may be resumed (x) in the case of clause
(A) above, as promptly as practicable, (y) in the case of clause (B) above, as
soon as, in the sole judgment of the Company, public disclosure of such Material
Event would not be prejudicial to or contrary to the interests of the Company
or, if necessary to avoid unreasonable burden or expense, as soon as practicable
thereafter and (z) in the case of clause (C) above, as soon as, in the
discretion of the Company, such suspension is no longer appropriate; provided
that the period during which the availability of the Shelf Registration
Statement and any Prospectus is suspended (the “Deferral Period”), without the
Company incurring any obligation to pay liquidated damages pursuant to
Section 2(d), shall not exceed forty-five (45) days in the aggregate in any
fiscal quarter, sixty (60) consecutive days in any 12-month period or ninety
(90) days in the aggregate in any 12-month period.

(c) Each Holder of Registrable Securities agrees that upon receipt of any
Deferral Notice from the Company, such Holder shall forthwith discontinue (and
cause any placement or sales agent or underwriters acting on their behalf to
discontinue) the disposition of Registrable Securities pursuant to the
registration statement applicable to such Registrable Securities until such
Holder (i) shall have received copies of such amended or supplemented Prospectus
and, if so directed by the Company, such Holder shall deliver to the Company (at
the Company’s expense) all copies, other than permanent file copies, then in
such Holder’s possession of the Prospectus covering such Registrable Securities
at the time of receipt of such notice or (ii) shall have received notice from
the Company that the disposition of Registrable Securities pursuant to the Shelf
Registration may continue.

(d) The Company may require each Holder of Registrable Securities as to which
any registration pursuant to Section 2(a) is being effected to furnish to the
Company such information regarding such Holder and such Holder’s intended method
of distribution of such Registrable Securities as the Company may from time to
time reasonably request in writing, but only to the extent that such information
is required in

 

12

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order to comply with the Securities Act. Each such Holder agrees to notify the
Company as promptly as practicable of any inaccuracy or change in information
previously furnished by such Holder to the Company or of the occurrence of any
event in either case as a result of which any Prospectus relating to such
registration contains or would contain an untrue statement of a material fact
regarding such Holder or such Holder’s intended method of disposition of such
Registrable Securities or omits to state any material fact regarding such Holder
or such Holder’s intended method of disposition of such Registrable Securities
required to be stated therein or necessary to make the statements therein not
misleading, and promptly to furnish to the Company any additional information
required to correct and update any previously furnished information or required
so that such Prospectus shall not contain, with respect to such Holder or the
disposition of such Registrable Securities, an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading.

(e) The Company shall comply with all applicable rules and regulations of the
Commission and make generally available to its securityholders earning
statements (which need not be audited) satisfying the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule
promulgated under the Securities Act) no later than 45 days after the end of any
12-month period (or 90 days after the end of any 12-month period if such period
is a fiscal year) commencing on the first day of the first fiscal quarter of the
Company commencing after the effective date of the Shelf Registration Statement,
which statements shall cover said 12-month periods.

(f) The Company shall provide a CUSIP number for all Registrable Securities
covered by the Shelf Registration Statement not later than the effective date of
such Shelf Registration Statement and provide the Trustee for the Notes and the
transfer agent for the Shares with printed certificates for the Registrable
Securities that are in a form eligible for deposit with The Depository Trust
Company.

(g) The Company shall use its reasonable efforts to provide such information as
is required for any filings required to be made with the National Association of
Securities Dealers, Inc.

(h) Until the expiration of two years after the Closing Date, the Company will
not, and will not permit any of its “affiliates” (as defined in Rule 144) to,
resell any of the Securities that have been reacquired by any of them except
pursuant to an effective registration statement under the Securities Act.

(i) The Company shall cause the Indenture to be qualified under the Trust
Indenture Act in a timely manner.

(j) The Company shall enter into such customary agreements and take all such
other necessary and lawful actions in connection therewith (including those
requested by the Majority Holders of the Registrable Securities being sold) in
order to expedite or facilitate disposition of such Registrable Securities.

 

13

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4. Holder’s Obligations.

Each Holder agrees, by acquisition of the Registrable Securities, that no Holder
of Registrable Securities shall be entitled to sell any of such Registrable
Securities pursuant to the Shelf Registration Statement or to receive a
Prospectus relating thereto, unless such Holder has furnished the Company with a
Selling Securityholder Questionnaire as required pursuant to Section 2(c) hereof
(including the information required to be included in such Selling
Securityholder Questionnaire) and the information set forth in the next
sentence. Each Notice Holder agrees promptly to furnish to the Company all
information required to be disclosed in order to make the information previously
furnished to the Company by such Notice Holder not misleading and any other
information regarding such Notice Holder and the distribution of such
Registrable Securities as may be required to be disclosed in the Shelf
Registration Statement under applicable law or pursuant to Commission comments.
Each Holder further agrees not to sell any Registrable Securities pursuant to
the Shelf Registration Statement without delivering, or causing to be delivered,
a Prospectus to the purchaser thereof and, following termination of the
Effective Period, to notify the Company, within 10 business days of a request by
the Company, of the amount of Registrable Securities sold pursuant to the Shelf
Registration Statement and, in the absence of a response, the Company may assume
that all of the Holder’s Registrable Securities were so sold.

5. Registration Expenses.

The Company agrees to bear and to pay or cause to be paid promptly upon request
being made therefore all expenses incident to the Company’s performance of or
compliance with this Agreement, including (a) all Commission and any NASD
registration and filing fees and expenses, (b) all fees and expenses in
connection with the qualification of the Securities for offering and sale under
the State securities and Blue Sky laws referred to in Section 3(a)(v) hereof,
including reasonable fees and disbursements of counsel for the placement agent
or underwriters, if any, in connection with such qualifications, (c) all
expenses relating to the preparation, printing, distribution and reproduction of
the Shelf Registration Statement, the related Prospectus, each amendment or
supplement to each of the foregoing, the certificates representing the
Securities and all other documents relating hereto, (d) fees and expenses of the
Trustee under the Indenture, any escrow agent or custodian, and of the registrar
and transfer agent for the Shares, (e) fees, disbursements and expenses of
counsel and independent certified public accountants of the Company (including
the expenses of any opinions or “cold comfort” letters required by or incident
to such performance and compliance) and (f) reasonable fees, disbursements and
expenses of one (1) counsel for the Holders of Registrable Securities retained
in connection with the Shelf Registration Statement, and fees, expenses and
disbursements of any other Persons, including special experts, retained by the
Company in connection with such registration (collectively, the “Registration
Expenses”). To the extent that any Registration Expenses are incurred, assumed
or paid by any Holder of Registrable Securities or any placement agent therefore
or underwriter thereof, the Company shall reimburse such Person for

 

14

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the full amount of the Registration Expenses so incurred, assumed or paid
promptly after receipt of a documented request therefore. Notwithstanding the
foregoing, the Holders of the Registrable Securities being registered shall pay
all placement agent fees and commissions and underwriting discounts and
commissions attributable to the sale of such Registrable Securities and the fees
and disbursements of any counsel or other advisors or experts retained by such
Holders (severally or jointly), other than the counsel and experts specifically
referred to above.

6. Indemnification and Contribution.

(a) The Company agrees to indemnify and hold harmless each Holder of Securities
covered by any Shelf Registration Statement, the directors, officers, employees,
Affiliates and agents of each such Holder and each Person who controls any such
Holder within the meaning of either the Securities Act or the Exchange Act
against any and all losses, claims, damages or liabilities, joint or several, to
which they or any of them may become subject under the Securities Act, the
Exchange Act or other federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Shelf
Registration Statement as originally filed or in any amendment thereof, or in
any preliminary Prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading (in the case of any
preliminary Prospectus or the Prospectus, in the light of the circumstances
under which they were made), and agrees to reimburse each such indemnified
party, as incurred, for any legal or other expenses reasonably incurred by it in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information relating to the party claiming
indemnification furnished to the Company by or on behalf of the party claiming
indemnification specifically for inclusion therein. This indemnity agreement
shall be in addition to any liability that the Company may otherwise have.

The Company also agrees to indemnify as provided in this Section 6(a) or
contribute as provided in Section 6(d) hereof to Losses of each underwriter, if
any, of Securities registered under the Shelf Registration Statement, its
directors, officers, employees, Affiliates or agents and each Person who
controls such underwriter on substantially the same basis as that of the
indemnification of the selling Holders provided in this paragraph (a) and shall,
if requested by any Holder, enter into an underwriting agreement reflecting such
agreement.

(b) Each Holder of securities covered by the Shelf Registration Statement
severally and not jointly agrees to indemnify and hold harmless the Company,
each of its directors, each of its officers who signs the Shelf Registration
Statement and each Person

 

15

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who controls the Company within the meaning of either the Securities Act or the
Exchange Act, to the same extent as the foregoing indemnity from the Company to
each such Holder, but only with reference to written information relating to
such Holder furnished to the Company by or on behalf of such Holder specifically
for inclusion in the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which any such Holder
may otherwise have.

(c) Promptly after receipt by an indemnified party under this Section 6 or
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 6, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses; and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or
(b) above. The indemnifying party shall be entitled to appoint counsel
(including local counsel) of the indemnifying party’s choice at the indemnifying
party’s expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel,
other than local counsel if not appointed by the indemnifying party, retained by
the indemnified party or parties except as set forth below); provided, however,
that such counsel shall be satisfactory to the indemnified party.
Notwithstanding the indemnifying party’s election to appoint counsel (including
local counsel) to represent the indemnified party in an action, the indemnified
party shall have the right to employ separate counsel (including local counsel),
and the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest; (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties that are different
from or additional to those available to the indemnifying party; (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action; or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.

 

16

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(d) In the event that the indemnity provided in paragraph (a) or (b) of this
Section 6 is unavailable to or insufficient to hold harmless an indemnified
party for any reason, then each applicable indemnifying party shall have a joint
and several obligation to contribute to the aggregate losses, claims, damages
and liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending such loss, claim, liability, damage
or action) (collectively “Losses”) to which such indemnified party may be
subject in such proportion as is appropriate to reflect the relative benefits
received by such indemnifying party, on the one hand, and such indemnified
party, on the other hand, from the Initial Placement and the Shelf Registration
Statement which resulted in such Losses; provided, however, that in no case
shall any subsequent Holder of any Securities be responsible, in the aggregate,
for any amount in excess of the purchase discount or commission applicable to
such Security, nor shall any underwriter be responsible for any amount in excess
of the underwriting discount or commission applicable to the securities
purchased by such underwriter under the Shelf Registration Statement which
resulted in such Losses. If the allocation provided by the immediately preceding
sentence is unavailable for any reason, the indemnifying party and the
indemnified party shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of such
indemnifying party, on the one hand, and such indemnified party, on the other
hand, in connection with the statements or omissions which resulted in such
Losses as well as any other relevant equitable considerations. Relative fault
shall be determined by reference to, among other things, whether any untrue or
any alleged untrue statement of a material fact or omission or alleged omission
to state a material fact relates to information provided by the indemnifying
party, on the one hand, or by the indemnified party, on the other hand, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The parties
agree that it would not be just and equitable if contribution were determined by
pro rata allocation (even if the Holders were treated as one entity for such
purpose) or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (d), no Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 6, each Person who controls a
Holder within the meaning of either the Securities Act or the Exchange Act and
each director, officer, employee and agent of such Holder shall have the same
rights to contribution as such Holder, and each Person who controls the Company
within the meaning of either the Securities Act or the Exchange Act, each
officer of the Company who shall have signed the Shelf Registration Statement
and each director of the Company shall have the same rights to contribution as
the Company, subject in each case to the applicable terms and conditions of this
paragraph (d).

(e) The provisions of this Section 6 shall remain in full force and effect,
regardless of any investigation made by or on behalf of any Holder or the
Company or any of the indemnified Persons referred to in this Section 6, and
shall survive the sale by a Holder of securities covered by the Shelf
Registration Statement.

 

17

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7. Rule 144.

The Company covenants to the Holders of Registrable Securities that the Company
shall use its reasonable efforts to timely file the reports required to be filed
by it under the Exchange Act or the Securities Act (including the reports under
Section 13 and 15(d) of the Exchange Act referred to in subparagraph (c)(1) of
Rule 144 adopted by the Commission under the Securities Act) and the rules and
regulations adopted by the Commission thereunder, all to the extent required
from time to time to enable such Holder to sell Registrable Securities without
registration under the Securities Act within the limitations of the exemption
provided by Rule 144 under the Securities Act, as such Rule may be amended from
time to time, or any similar or successor rule or regulation hereafter adopted
by the Commission. Upon the request of any Holder of Registrable Securities in
connection with that Holder’s sale pursuant to Rule 144, the Company shall
deliver to such Holder a written statement as to whether it has complied with
such requirements.

8. Inconsistent Agreements.

The Company has not entered into, and agrees not to enter into, any agreement
with respect to its securities that is inconsistent with the rights granted to
the Holders herein or that otherwise conflict with the provisions hereof.

9. Miscellaneous.

(a) Entire Agreement; Amendments. This Agreement and the other writings referred
to herein (including the Indenture) or delivered pursuant hereto which form a
part hereof contain the entire understanding of the parties and supersedes all
prior agreements and understandings between the parties with respect to its
subject matter. This Agreement may be amended and the observance of any term of
this Agreement may be waived (either generally or in a particular instance and
either retroactively or prospectively) only by a written instrument duly
executed by the Company and the Majority Holders of the Registrable Securities
at the time outstanding.

(b) Notices. All notices, requests, claims, demands, waivers and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered by hand, if delivered personally or by courier, or
three days after being deposited in the mail (registered or certified mail,
postage prepaid, return receipt requested) as follows:

(i) If to the Company, to it at 1421 California Circle, Milpitas, California
95035, Attention: General Counsel, with a copy to Morrison & Foerster, LLP, 755
Page Mill Road, Palo Alto, California 94304, Attention: Richard Scudellari,
Esq.;

(ii) If to an Initial Purchaser, to the address set forth in its respective
Exchange Agreement; and

 

18

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(iii) If to a Holder, to the address of such Holder set forth in the security
register, the Selling Securityholder Questionnaire or other records of the
Company,

or to such other address as the Company, an Initial Purchaser or any such Holder
may have furnished to the other parties in writing in accordance herewith,
except that notices of change of address shall be effective only upon receipt.

(c) Remedies. Nothing shall preclude a Notice Holder or Holder of Registrable
Securities from pursuing or obtaining specific performance or other equitable
relief with respect to this Agreement.

(d) Successors. This Agreement shall be binding upon, shall inure to the benefit
of and shall be enforceable by the respective successors and assigns of the
parties hereto. In the event that any transferee of any Holder of Registrable
Securities shall acquire Registrable Securities, in any manner, whether by gift,
bequest, purchase, operation of law or otherwise, such transferee shall, without
any further writing or action of any kind, be deemed a party hereto for all
purposes and such Registrable Securities shall be held subject to all of the
terms of this Agreement, and by taking and holding such Registrable Securities
such transferee shall be entitled to receive the benefits of, and be
conclusively deemed to have agreed to be bound by and to perform, all of the
applicable terms and provisions of this Agreement.

(e) Survival. The respective indemnities, agreements, representations,
warranties and each other provision set forth in this Agreement or made pursuant
hereto shall remain in full force and effect regardless of any investigation (or
statement as to the results thereof) made by or on behalf of any Holder of
Registrable Securities, any director, officer or partner of such Holder, any
agent or underwriter or any director, officer or partner thereof, or any
controlling person of any of the foregoing, and shall survive delivery of and
payment for the Registrable Securities pursuant to the Exchange Agreement and
the transfer and registration of Registrable Securities by such Holder.

(f) Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED IN THE STATE OF NEW YORK.

(g) Headings. The descriptive headings of the several Sections and paragraphs of
this Agreement are inserted for convenience only, do not constitute a part of
this Agreement and shall not affect in any way the meaning or interpretation of
this Agreement.

(h) Counterparts. This Agreement may be executed by the parties in counterparts,
each of which shall be deemed to be an original, but all such respective
counterparts shall together constitute one and the same instrument.

 

19

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(i) Severability. In the event that any one of more of the provisions contained
herein, or the application thereof in any circumstances, is held invalid,
illegal or unenforceable in any respect for any reason, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of the parties
shall be enforceable to the fullest extent permitted by law.

(j) Securities Held by the Company, etc. Whenever the consent or approval of
Holders of a specified percentage of Securities is required hereunder,
Securities held by the Company or its Affiliates (other than subsequent Holders
of Securities if such subsequent Holders are deemed to be Affiliates solely by
reason of their holdings of such Securities) shall not be counted in determining
whether such consent or approval was given by the Holders of such required
percentage.

 

20

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Agreed to and accepted as of the date referred to above.

 

Very truly yours, CREDENCE SYSTEMS CORPORATION By:  

 

Name:   Title:  

[Signature Page to Registration Rights Agreements]

--------------------------------------------------------------------------------

TENNEBAUM MULTI STRATEGY MASTER FUND By:  

 

Name:   Title:   QUATTRO FUND LTD By:  

 

Name:   Title:   QUATTRO MULTI STRATEGY MASTER FUND LP By:  

 

Name:   Title:   INSTITUTIONAL BENCHMARK SERIES (MASTER FEEDER) LIMITED IN
RESPECT OF ELECTRA SERIES C/O QUATTRO FUND By:  

 

Name:   Title:   PARTNERS GROUP ALTERNATIVE STRATEGIES PCC LIMITED, RED DELTA
CELL C/O QUATTRO FUND By:  

 

Name:   Title:  

[Signature Page to Registration Rights Agreements]

--------------------------------------------------------------------------------

OCM CONVERTIBLE TRUST By:  

 

Name:   Title:   DELTA AIR LINES MASTER TRUST - DOMESTIC CONVERTIBLE By:  

 

Name:   Title:   DELAWARE PUBLIC EMPLOYEES’ RETIREMENT SYSTEM By:  

 

Name:   Title:   PARTNER REINSURANCE COMPANY LTD. By:  

 

Name:   Title:   CHRYSLER CORPORATION MASTER RETIREMENT TRUST By:  

 

Name:   Title:  

[Signature Page to Registration Rights Agreements]

--------------------------------------------------------------------------------

VANGUARD CONVERTIBLE SECURITIES FUND INC. By:  

 

Name:   Title:   DELTA PILOTS DISABILITY AND SURVIVORSHIP TRUST – CONVERTIBLE
By:  

 

Name:   Title:   MICROSOFT CAPITAL GROUP, L.P. - DOMESTIC CONVERTIBLE By:  

 

Name:   Title:   QWEST OCCUPATIONAL HEALTH TRUST By:  

 

Name:   Title:   INTERNATIONAL TRUCK & ENGINE CORPORATION NONCONTRIBUTORY
RETIREMENT PLAN TRUST By:  

 

Name:   Title:  

[Signature Page to Registration Rights Agreements]

--------------------------------------------------------------------------------

INTERNATIONAL TRUCK & ENGINE CORPORATION RETIREMENT PLAN FOR SALARIED EMPLOYEES
TRUST By:  

 

Name:   Title:   INTERNATIONAL TRUCK & ENGINE CORPORATION RETIREE HEALTH BENEFIT
TRUST By:  

 

Name:   Title:   UNUMPROVIDENT CORPORATION By:  

 

Name:   Title:   F.M. KIRBY FOUNDATION, INC. By:  

 

Name:   Title:   OCM GLOBAL CONVERTIBLE SECURITIES FUND - DOMESTIC CONVERTIBLE
By:  

 

Name:   Title:  

[Signature Page to Registration Rights Agreements]

--------------------------------------------------------------------------------

VIRGINIA RETIREMENT SYSTEM By:  

 

Name:   Title:   QWEST PENSION TRUST By:  

 

Name:   Title:   QWEST OCCUPATIONAL HEALTH TRUST By:  

 

Name:   Title:   ACE TEMPEST REINSURANCE LTD. - DOMESTIC CONVERTIBLE By:  

 

Name:   Title:   NATIONAL RAILROAD RETIREMENT INVESTMENT TRUST By:  

 

Name:   Title:  

[Signature Page to Registration Rights Agreements]

--------------------------------------------------------------------------------

ARCH REINSURANCE By:  

 

Name:   Title:   OCM GLOBAL CONVERTIBLE SECURITIES FUND - HIGH INCOME By:  

 

Name:   Title:   DELTA AIR LINES MASTER TRUST - HIGH INCOME By:  

 

Name:   Title:   THE LONG TERM INVESTMENT TRUST (AT&T) By:  

 

Name:   Title:   OCM HIGH INCOME CONVERTIBLE LIMITED PARTNERSHIP By:  

 

Name:   Title:   HIGH INCOME CONVERTIBLE FUND II LIMITED PARTNERSHIP By:  

 

Name:   Title:  

[Signature Page to Registration Rights Agreements]

--------------------------------------------------------------------------------

SAN DIEGO COUNTY RETIREMENT ASSOCIATION - HIGH INCOME CONVERTIBLE By:  

 

Name:   Title:   VIRGINIA RETIREMENT SYSTEM By:  

 

Name:   Title:   RICHARD KING MELLON FOUNDATION By:  

 

Name:   Title:   MICROSOFT CAPITAL GROUP, L.P. (HIGH INCOME) By:  

 

Name:   Title:   ACE TEMPEST REINSURANCE LTD. - HIGH INCOME By:  

 

Name:   Title:  

[Signature Page to Registration Rights Agreements]

--------------------------------------------------------------------------------

TRIPAR PARTNERSHIP - HIGH INCOME By:  

 

Name:   Title:   GENERAL MOTORS FOUNDATION INC. By:  

 

Name:   Title:   GMAM INVESTMENT FUNDS TRUST II By:  

 

Name:   Title:   THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY FOR ITS GROUP
ANNUITY SEPARATE ACCOUNT By:  

 

Name:   Title:   THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY By:  

 

Name:   Title:   CANYON CAPITAL ARBITRAGE MASTER FUND LTD By:  

 

Name:   Title:  

[Signature Page to Registration Rights Agreements]

--------------------------------------------------------------------------------

THE CANYON VALUE REALIZATION FUND (CAYMAN) LTD By:  

 

Name:   Title:   CANYON VALUE REALIZATION MAC 18 LTD By:  

 

Name:   Title:   CANYON VALUE REALIZATION FUND LP By:  

 

Name:   Title:   LYXOR / CANYON CAPITAL ARBITRAGE FUND, LTD. By:  

 

Name:   Title:   FIDELITY CONVERTIBLE SECURITIES FUND By:  

 

Name:   Title:  

[Signature Page to Registration Rights Agreements]

--------------------------------------------------------------------------------

FIDELITY STRATEGIC DIVIDEND AND INCOME FUND By:  

 

Name:   Title:   ARISTEIA INTERNATIONAL LIMITED By:  

 

Name:   Title:   ARISTEIA PARTNERS LP By:  

 

Name:   Title:  

[Signature Page to Registration Rights Agreements]

--------------------------------------------------------------------------------

EXHIBIT A

List of Initial Purchasers

 

Name of Initial Purchaser

   Principal Amount
of Notes 1.   Tennebaum Multi Strategy Master Fund    $ 39,778,000 2.   Quattro
Fund Ltd      15,390,000 3.   Quattro Multi Strategy Master Fund LP     
2,070,000 4.  

Institutional Benchmark Series (Master Feeder)

Limited in Respect of Electra Series c/o Quattro Fund

     1,250,000 5.   Partners Group Alternative Strategies CC Limited, Red Delta
Cell c/o Quattro Fund      2,790,000 6.   OCM Convertible Trust      390,000 7.
  Delta Air Lines Master Trust - Domestic Convertible      225,000 8.   Delaware
Public Employees’ Retirement System      725,000 9.   Partner Reinsurance
Company Ltd.      280,000 10.   Chrysler Corporation Master Retirement Trust   
  1,285,000 11.   Vanguard Convertible Securities Fund Inc.      2,335,000 12.  
Delta Pilots Disability and Survivorship Trust - Convertible      155,000 13.  
Microsoft Capital Group, L.P. - Domestic Convertible      130,000 14.   Qwest
Occupational Health Trust      35,000 15.   International Truck & Engine
Corporation NonContributory Retirement Plan Trust      125,000 16.  
International Truck & Engine Corporation Retirement Plan for Salaried Employees
Trust      70,000 17.   International Truck & Engine Corporation Retiree Health
Benefit Trust      75,000 18.   UnumProvident Corporation      185,000 19.  
F.M. Kirby Foundation, inc.      225,000 20.   OCM Global Convertible Securities
Fund - Domestic Convertible      165,000 21.   Virginia Retirement System     
1,020,000 22.   Qwest Pension Trust      540,000 23.   Qwest Occupational Health
Trust      505000 24.   ACE Tempest Reinsurance Ltd. - Domestic Convertible    $
285,000

 

A-1

--------------------------------------------------------------------------------

Name of Initial Purchaser

   Principal Amount
of Notes

25.

  National Railroad Retirement Investment Trust    695,000

26.

  Arch Reinsurance    602,000

27.

  OCM Global Convertible Securities Fund - High Income    113,000

28.

  Delta Air Lines Master Trust - High Income    181,000

29.

  The Long Term Investment Trust (AT&T)    1,093,000

30.

  OCM High Income Convertible Limited Partnership    415,000

31.

  High Income Convertible Fund II Limited Partnership    491,000

32.

  San Diego County Retirement Association - High Income Convertible    126,000

33.

  Virginia Retirement System    1,096,000

34.

  Richard King Mellon Foundation    363,000

35.

  Microsoft Capital Group, L.P. (High Income)    336,000

36.

  ACE Tempest Reinsurance Ltd. - High Income    368,000

37.

  Tripar Partnership - High Income    368,000

38.

  General Motors Foundation Inc.    97,000

39.

  GMAM Investment Funds Trust II    1,148,000

40.

  The Northwestern Mutual Life Insurance Company for its Group Annuity Separate
Account    200,000

41.

  The Northwestern Mutual Life Insurance Company    9,225,000

42.

  Canyon Capital Arbitrage Master Fund Ltd    6,300,000

43.

  The Canyon Value Realization Fund (Cayman) Ltd    7,380,000

44.

  Canyon Value Realization MAC 18 Ltd    540,000

45.

  Canyon Value Realization Fund LP    2,880,000

46.

  Lyxor / Canyon Capital Arbitrage Fund, Ltd.    900,000

47.

  Fidelity Convertible Securities Fund    8,000,000

48.

  Fidelity Strategic Dividend and Income Fund    2,000,000

49.

  Aristeia International Limited    6,932,000

50.

  Aristeia Partners LP    1,068,000

 

A-2

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EXHIBIT B

Selling Securityholder Questionnaire

The undersigned beneficial owner (the “Selling Securityholder”) of the 3.5%
Convertible Senior Subordinated Notes due 2010 (the “Notes”) of Credence Systems
Corporation (the “Company”) or the shares of the Company’s Common Stock, par
value $0.001 per share, issuable upon conversion of the Notes (the “Common
Stock” and, together with the Notes, the “Registrable Securities”) hereby gives
notice to the Company of its intention to sell or otherwise dispose of
Registrable Securities beneficially owned by it and listed below in Item 3
(unless otherwise specified under Item 3) pursuant to the Shelf Registration
Statement. The undersigned, by signing and returning this Selling Securityholder
Questionnaire, understands that it will be bound by the terms and conditions of
this Selling Securityholder Questionnaire and the Registration Rights Agreement,
dated as of December 20, 2006, among the Company and the Initial Purchasers
thereto.

Pursuant to the Registration Rights Agreement, the undersigned has agreed to
indemnify and hold harmless the Company’s directors, the Company’s officers and
each person, if any, who controls the Company within the meaning of either
Section 15 of the Securities Act or Section 20 of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), from and against certain losses arising
in connection with statements concerning the undersigned made in the Shelf
Registration Statement or the related prospectus in reliance upon the
information provided in this Selling Securityholder Questionnaire. The
undersigned hereby acknowledges its obligations under the Registration Rights
Agreement to indemnify and hold harmless certain persons set forth therein.

The undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate and complete:

 

(1)    (a)   Full Legal Name of Selling Securityholder:     

 

   (b)   Full Legal Name of Registered Holder (if not the same as (a) above)
through which Registrable Securities listed in (3) below are held:     

 

   (c)   Full Legal Name of DTC Participant (if applicable and if not the same
as (b) above) through which Registrable Securities listed in (3) below are held:
    

 

(2)    Address for Notices to Selling Securityholder:   

 

 

B-1

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   Telephone (including area code):                                       
                                        
                                                                               
Fax (including area code):                                       
                                        
                                        
                                                  Contact
Person:                                       
                                        
                                        
                                                                (3)   
Beneficial Ownership of Registrable Securities:   

 

   (a)   Type and Principal Amount/Number of Registrable Securities beneficially
owned:     

 

   (b)   CUSIP No(s). of such Registrable Securities beneficially owned:     

 

(4)    Beneficial Ownership of Other Securities of the Company Owned by the
Selling Securityholder:    Except as set forth below in this Item (4), the
undersigned is not the beneficial or registered owner of any securities of the
Company other than the Registrable Securities listed above in Item (3).    (a)  
Type and Amount of Other Securities beneficially owned by the Selling
Securityholder:     

 

   (b)   CUSIP No(s). of such Other Securities beneficially owned:     

 

(5)    Relationship with the Company:    Except as set forth below, neither the
undersigned nor any of its affiliates, officers, directors or principal equity
holders (5% or
more) has held any position or office or has had any other material relationship
with the Company (or its predecessors or
affiliates) during the past three years.    State any exceptions
here:                                       
                                        
                                        
                                                (6)    Is the Selling
Securityholder a registered broker-dealer?    Yes   ¨    No   ¨    If “Yes”,
please answer subsection (a) and subsection (b):

 

B-2

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(a)    Did the Selling Securityholder acquire the Registrable Securities as
compensation for underwriting/broker-dealer activities to the Company?

 

Yes    ¨

 

No     ¨

 

(b)    If you answered “No” to question 6(a), please explain your reason for
acquiring the Registrable Securities:

  
          ______________________________________________________________________________________________
  
          ______________________________________________________________________________________________
(7)    Is the Selling Securityholder an affiliate of a registered broker-dealer?
  

Yes    ¨

 

No     ¨

 

If “Yes”, please identify the registered broker-dealer(s), describe the nature
of the affiliation(s) and answer subsection (a) and subsection (b):

 

                                                                               
                                                   

 

(a)    Did the Selling Securityholder purchase the Registrable Securities in the
ordinary course of business (if no, please explain)?

 

Yes    ¨

 

No     ¨        Explain:                                         
                                                     

 

(b)    Did the Selling Securityholder have an agreement or understanding,
directly or indirectly, with any person to distribute the Registrable Securities
at the same time the Registrable Securities were originally purchased (if yes,
please explain)?

 

Yes    ¨

 

No     ¨        Explain:                             
                                                                

(8)    Is the Selling Securityholder a non-public entity?   

Yes    ¨

 

No     ¨

 

If “Yes”, please answer subsection (a):

 

(a)    Identify the natural person or persons that have voting or investment
control over the Registrable Securities that the non-public entity owns:

 

B-3

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(9) Plan of Distribution:

Except as set forth below, the undersigned Selling Securityholder (including its
donees and pledgees) intends to distribute the Registrable Securities listed
above in Item (3) pursuant to the Shelf Registration Statement only as follows
(if at all): Such Registrable Securities may be sold from time to time directly
by the undersigned Selling Securityholder or, alternatively, in accordance with
the Registration Rights Agreement, through underwriters, broker-dealers or
agents. If the Registrable Securities are sold through underwriters or
broker-dealers, the Selling Securityholders will be responsible for underwriting
discounts or commissions or agent commissions. Such Registrable Securities may
be sold in one or more transactions at fixed prices, at prevailing market prices
at the time of sale, at varying prices determined at the time of sale, or at
negotiated prices. Such sales may be effected in transactions (which may involve
cross or block transactions) (i) on any national securities exchange or
quotation service on which the Registrable Securities may be listed or quoted at
the time of sale, (ii) in the over-the-counter market, (iii) in transactions
otherwise than on such exchanges or services or in the over-the-counter market,
or (iv) through the writing of options. In connection with sales of the
Registrable Securities or otherwise, the undersigned Selling Securityholder may
enter into hedging transactions with broker-dealers, which may in turn engage in
short sales of the Registrable Securities in the course of hedging positions
they assume. The undersigned Selling Securityholder may also sell Registrable
Securities short and deliver Registrable Securities to close out short
positions, or loan or pledge Registrable Securities to broker-dealers that in
turn may sell such securities.

State any exceptions here:                               
                                        
                                        
                                                        

Note: In no event will such method(s) of distribution take the form of an
underwritten offering of the Registrable Securities without the prior agreement
of the Company.

The undersigned Selling Securityholder acknowledges that it understands its
obligations to comply with the provisions of the Securities Exchange Act of
1934, as amended, and the rules thereunder relating to stock manipulation,
particularly Regulation M thereunder (or any successor rules or regulations), in
connection with any offering of Registrable Securities pursuant to the Shelf
Registration Agreement. The undersigned agrees that neither it nor any person
acting on its behalf will engage in any transaction in violation of such
provisions.

Pursuant to the Registration Rights Agreement, the Company has agreed under
certain circumstances to indemnify the Selling Securityholder against certain
liabilities.

In the event the undersigned transfers all or any portion of the Registrable
Securities listed in Item (3) above after the date on which such information is
provided to the Company other than pursuant to the Shelf Registration Statement,
the undersigned agrees to notify the transferee(s) at the time of the transfer
of its rights and obligations under this Selling Securityholder Questionnaire
and the Registration Rights Agreement.

 

B-4

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In accordance with the undersigned’s obligation under the Registration Rights
Agreement to provide such information as may be required by law or by the staff
of the Commission for inclusion in the Shelf Registration Statement, the
undersigned agrees to promptly notify the Company of any inaccuracies or changes
in the information provided herein that may occur subsequent to the date hereof
at anytime while the Shelf Registration Statement remains effective. All notices
hereunder and pursuant to the Registration Rights Agreement shall be made in
writing, by hand-delivery, first-class mail, or air courier guaranteeing
overnight delivery to the address set forth below.

By signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items (1) through (9) above and the inclusion
of such information in the Shelf Registration Statement and the related
prospectus. The undersigned understands that such information will be relied
upon by the Company in connection with the preparation or amendment of the Shelf
Registration Statement and the related prospectus.

Once this Selling Securityholder Questionnaire is executed by the undersigned
and received by the Company, the terms of this Selling Securityholder
Questionnaire, and the representations, warranties and agreements contained
herein, shall be binding on, shall inure to the benefit of and shall be
enforceable by the respective successors, heirs, personal representatives, and
assigns of the Company and the undersigned with respect to the Registrable
Securities beneficially owned by the undersigned and listed in Item (3) above.
This Selling Securityholder Questionnaire shall be governed in all respects by
the laws of the State of New York.

IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this
Selling Securityholder Questionnaire to be executed and delivered either in
person or by its duly authorized agent.

Dated:                                

 

   

 

    Beneficial Owner     By:  

 

    Name:  

 

    Title:  

 

PLEASE RETURN THE COMPLETED AND EXECUTED SELLING SECURITYHOLDER

QUESTIONNAIRE TO THE COMPANY AT:

CREDENCE SYSTEMS CORPORATION

1421 California Circle

Milpitas, California 95035

Tel: (408) 653-4300

Fax: (408) 635-4985

Attn: General Counsel

 

B-5