Exhibit 10.1

Final

13 June 2008

Share Purchase Agreement

(the “Agreement”)

between

Credence Europa Limited

- “Seller” -

and

Credence Systems Corporation

(as guarantor with respect to Section 9 only)

- “Guarantor” -

on the one hand

and

Advantest (Europe) GmbH

- “Purchaser” -

on the other hand

dated 13 June 2008

regarding the sale and purchase of all shares in Credence Systems GmbH

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TABLE OF CONTENTS

 

     Page

LIST OF EXHIBITS

   6

Recitals

   8

Section 1 Sale and Transfer of the Sold Shares

   9

1.1

   Agreement to Sell and Purchase    9

1.2

   Transfer of the Sold Shares    9

1.3

   Dividend Rights    9

Section 2 Purchase Price; Payment; Net Working Capital Adjustment

   9

2.1

   Purchase Price    9

2.2

   Payment on the Closing Date    10

2.3

   Mode of Payment; No Set-Off    10

2.4

   Net Working Capital    10

2.5

   Determination of Net Working Capital and of the Deferred Revenue Excess on
Closing Date    11

2.6

   Purchaser’s Audit Right    11

2.7

   Preparation of Closing Date Statement    11

2.8

   Accounting Principles    12

2.9

   Review of Closing Date Statement    12

2.10

   Dispute Resolution    12

2.11

   Settlement    13

Section 3 Closing

   14

3.1

   Place and Time of Closing    14

3.2

   Conditions to Closing    14

 

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3.3

   Merger Control Proceedings    16

3.4

   Actions on the Closing Date    17

Section 4 Representations and Warranties of Seller

   17

4.1

   Organization and Authorization of Seller and Guarantor    18

4.2

   Due Incorporation and Organization    19

4.3

   Ownership of Shares; Shareholdings    20

4.4

   Financial Statements    21

4.5

   Assets    22

4.6

   Intellectual Property Rights    24

4.7

   Governmental Permits; Compliance with Laws; State Aids    26

4.8

   Litigation, Disputes    26

4.9

   Employees    27

4.10

   Agreements    29

4.11

   Insurance Coverage    32

4.12

   Product Liability and Warranty    33

4.13

   Certain Transaction Related Fees and Expenses    33

4.14

   Conduct of Business since October 31, 2007    33

4.15

   Tax Matters    35

4.16

   Environmental Matters    36

4.17

   Disclosure    37

Section 5 Representations and Warranties of Purchaser

   38

5.1

   Existence and Authorization of Purchaser    38

5.2

   Financial Capability    39

5.3

   Purchase for Investment    39

Section 6 Covenants

   39

6.1

   Conduct of Business Prior to Closing    39

 

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6.2

   Access and Cooperation Prior to the Closing Date    40

6.3

   Carve-Out    40

6.4

   Use of Seller’s Marks    42

6.5

   Non-Solicitation    42

6.6

   Confidentiality    42

6.7

   Access to Information after Closing    43

6.8

   Further Assurances; Cooperation    43

Section 7 Indemnification by Seller

   43

7.1

   Indemnification for Inaccuracy of Warranties    43

7.2

   Disclosed Matters    44

7.3

   Thresholds and Limitation of Liability    44

7.4

   Limitation Periods    45

7.5

   Indemnification Procedures    45

7.6

   No Additional Rights or Remedies    46

Section 8 Termination

   46

8.1

   Termination Rights    46

8.2

   Effects of Termination    47

8.3

   Exclusion of Other Termination Rights    47

Section 9 Guarantor’s Liability

   47

Section 10 Miscellaneous

   47

10.1

   Notices; Process Agent    47

10.2

   Public Disclosure, Confidentiality    48

10.3

   Costs and Expenses    48

10.4

   Entire Agreement    49

10.5

   Amendments and Waivers    49

 

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10.6

   Governing Law; Jurisdiction    49

10.7

   Interpretation    50

10.8

   Severability    50

10.9

   Definitions    51

 

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LIST OF EXHIBITS

 

Exhibit R3    Non-Automotive Business / Excluded Assets Exhibit 2.3 (a)    Bank
account of Seller Exhibit 2.4    Pro-Forma May 3 Balance Sheet Exhibit 2.8   
Accounting Principles Exhibit 3.2 (c) (ii)    Third party consents Exhibit 3.4
(b)    Representation Certificate Exhibit 3.4 (d)    Certificate acknowledging
the occurrence of the Closing Exhibit 4.2 (d)    Copies of excerpts from
commercial and certain other registers Exhibit 4.2 (e)    Powers of attorney
issued by the Company Exhibit 4.4 (a)    Annual Financial Statements Exhibit 4.4
(c)    Financial Debts Exhibit 4.5 (b)    Third party rights and encumbrances in
assets Exhibit 4.5 (c)    Properties Exhibit 4.5 (d)    State of repair and
maintenance of assets Exhibit 4.5 (f)    Required Services / Licenses Exhibit
4.6 (a)    Intellectual Property Rights Exhibit 4.6 (b)    Third-party rights,
licences and restrictions regarding Intellectual Property Rights Exhibit 4.6 (c)
   Infringements of third party intellectual property rights Exhibit 4.6 (d)   
Employee inventions Exhibit 4.6 (e)    Confidentiality agreements Exhibit 4.6
(f)    Information Technology Exhibit 4.6. (g)    Terminating software licenses
Exhibit 4.8    Litigation Exhibit 4.9 (a)    Key Employees Exhibit 4.9 (b)   
Description of the workforce Exhibit 4.9 (c)    Collective agreements and
practices Exhibit 4.9 (d)    Redundancy and similar schemes Exhibit 4.9 (e)   
Labor disputes Exhibit 4.9 (f)    Benefit Plans Exhibit 4.9 (g)    Stock
participation plans, termination periods and loans to employees Exhibit 4.9 (h)
   Arrangement with employees relating to change of control Exhibit 4.10 (a)   
Material Agreements Exhibit 4.10 (b)    Certain matters relating to Material
Agreements Exhibit 4.11    Insurance matters Exhibit 4.12    Product liability
and warranty

 

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Exhibit 4.14    Conduct of business since October 31, 2007 Exhibit 4.16   
Environmental disclosure Exhibit 6.1    Conduct of business prior to Closing
Exhibit 6.3 (a)    Asset Sale and Transfer Agreement Exhibit 6.3 (c)/1   
Agreements to be transferred Exhibit 6.3 (c)/2    Transfer and Assumption
Agreements Exhibit 6.3 (d)    Intellectual Property Transfer Agreement Exhibit
6.3 (e)/1    Draft form of distribution resolution on cash Exhibit 6.3 (e)/2   
Draft form of Closing Date distribution resolution on cash Exhibit 6.3 (f)   
Illustration of carving out the Excluded Assets Exhibit 6.3 (g)    Resources to
be made available by Company Exhibit 7.2    Persons relevant for Purchaser’s
knowledge Exhibit 10.6 (b)    Arbitration rules of the ICC, Paris

 

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Recitals

 

1. Seller is the owner of 100 % of the issued share capital of Credence Systems
GmbH, registered in the commercial register of Traunstein under HRB 14975
(hereinafter referred to as “Company”). The Company has a registered share
capital of EUR 25,000 with one share in the nominal amount of EUR 25,000 owned
by Seller. The Company is active in the business of developing, manufacturing
and distributing, as well as providing service and maintenance for, test systems
for electronic devices for automobiles as well as in the business of
distributing test systems primarily for other electronic devices. The Guarantor
is the ultimate parent company of the Company.

 

2. Seller and all entities (other than the Company) affiliated with Seller
within the meaning of Section 15 of the German Stock Corporation Act (AktG) are
referred to herein as the “Seller’s Group”. Purchaser and all entities
affiliated with Purchaser within the meaning of Section 15 of the German Stock
Corporation Act (AktG) are referred to herein as the “Purchaser’s Group”.

 

3. Seller wishes to sell its shareholding in Company and Purchaser wishes to
acquire such shareholding, provided that, prior to the consummation of such
sale, certain assets and liabilities primarily relating to the Company’s
non-automotive business, which assets and liabilities are classified in Exhibit
R3 (the “Non-Automotive Business”) will have been carved out from the Company
(the “Excluded Assets”), the Company’s business excluding the Non-Automotive
Business hereinafter referred to as the “Automotive Business”, which Automotive
Business predominantly relates to the products “Falcon” and “Piranha”.

Therefore, Seller and Purchaser (hereinafter referred to as the “Parties”) agree
as follows:

 

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Section 1

Sale and Transfer of the Sold Shares

 

1.1 Agreement to Sell and Purchase

Upon the terms set forth in this Agreement, Seller hereby sells to Purchaser,
and Purchaser hereby purchases from Seller, the shares owned by Seller in
Company, as set forth in paragraph 1 of the Recitals (the “Sold Shares”).

 

1.2 Transfer of the Sold Shares

Seller hereby assigns to Purchaser the Sold Shares with effect as of the Closing
Date (as defined in Section 3.1 below), and Purchaser accepts such assignment.
The Sold Shares are assigned to Purchaser subject to the fulfillment (or, to the
extent permissible, the waiver) of the conditions precedent referred to in
Section 3.2 and of the further condition precedent of the full payment of the
Purchase Price by Purchaser to Seller on the Closing Date. The foregoing
condition shall be deemed to be fulfilled also upon the execution by the Parties
of the certificate referred to in Section 3.4 (d).

 

1.3 Dividend Rights

The Sold Shares shall be sold and transferred to Purchaser with all dividend
rights pertaining thereto, including the right to receive all profits for the
current fiscal year and the right to any accrued profits for all previous fiscal
years, however, subject to the distribution made pursuant to Section 6.3.

Section 2

Purchase Price; Payment; Net Working Capital Adjustment

 

2.1 Purchase Price

The purchase price for the Sold Shares (the “Purchase Price”) shall be USD
5,000,000 (in words: United States Dollars five million).

 

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2.2 Payment on the Closing Date

On the Closing Date Purchaser shall pay to Seller an amount equal to the
Purchase Price.

 

2.3 Mode of Payment; No Set-Off

 

  (a) The payment to be made under this Section 2 shall be made in USD by
irrevocable wire transfer of immediately available funds to the bank account of
the Seller set forth in Exhibit 2.3 (a). The payment shall be deemed to have
been made upon the irrevocable and unconditional receipt of funds in the account
of the Seller.

 

  (b) Purchaser shall not be entitled to exercise any right of set-off or
retention right with respect to its payment obligation pursuant to this
Section 2.

 

2.4 Net Working Capital

The Parties assume the following:

 

  (a) The Net Working Capital of the Automotive Business on the Closing Date
will be between Euros 6,000,000 and 9,000,000 (the “NWC Corridor”) which
represents a band of approximately plus/minus 20% around the amount of the Net
Working Capital relating to the Automotive Business reflected in the balance
sheet as of May 3, 2008 attached hereto as Exhibit 2.4 (the ““Pro-Forma May 3
Balance Sheet”). “Net Working Capital” for purposes of this Agreement shall
mean, in each case referring to the line item in the Pro-Forma May 3 Balance
Sheet, the net accounts receivable, plus inventories, less accounts payable, as
of the Closing Date, i.e. after the carve-out of the Non-Automotive Business has
been consummated. A calculation of the Net Working Capital as of May 3, 2008 is
incorporated in Exhibit 2.4 for illustration purposes;

 

  (b) the cash as of the Closing Date will at least be equal to the amount of
the paid deferred revenue as of the Closing Date (in each case referring to the
line item in the Pro-Forma May 3 Balance Sheet); any excess of the paid deferred
revenue as of the Closing Date over the cash as of the Closing Date shall be the
“Deferred Revenue Excess”.

 

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2.5 Determination of Net Working Capital and of the Deferred Revenue Excess on
Closing Date

Seller shall deliver to Purchaser Seller’s good faith estimate of the Net
Working Capital and of the Deferred Revenue Excess (if any) no later than at the
end – CET – of the 2nd Business Day prior to the Closing Date. If the Net
Working Capital as so presented by Seller is within the NWC Corridor, and there
is no Deferred Revenue Excess, the Parties shall proceed with the Closing as
provided for in Section 3. If the Net Working Capital as so presented by Seller
is outside of the NWC Corridor, or there is a Deferred Revenue Excess, the
Parties shall discuss in good faith Seller’s determination of the Net Working
Capital and the Deferred Revenue Excess and a possible Adjustment Payment as set
forth and defined in Section 2.11, by Seller or by Purchaser, as the case may
be, resulting therefrom. If the Parties are unable to reach an agreement, an
Adjustment Payment, if any, shall be made on the basis of the Seller’s good
faith estimate. If the Parties are able to reach an agreement on the Net Working
Capital and a possible Adjustment Payment resulting therefrom, such Adjustment
Payment, if any, shall become due and payable together with the Purchase Price.

 

2.6 Purchaser’s Audit Right

Purchaser shall have the right to audit the Net Working Capital and the Deferred
Revenue Excess as determined by Seller or as agreed by the Parties pursuant to
Section 2.5, as the case may be, which right must be exercised by notifying
Seller and Guarantor in writing on or within 10 days after the Closing Date. If
Purchaser exercises said right, the procedure set forth in Sections 2.7 through
2.11 shall apply.

 

2.7 Preparation of Closing Date Statement

As promptly as practicable, but not later than 60 days after receipt of the
notice referred to in Section 2.6 by Seller, Purchaser shall prepare, or cause
to be prepared, and deliver to Seller a statement setting forth the individual
line items of the Net Working Capital and Purchaser’s calculation of the Net
Working Capital and of the Deferred Revenue Excess, if any, as of the Closing
Date (the “Closing Date Statement”).

 

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2.8 Accounting Principles

The Closing Date Statement shall be prepared in accordance with the rules and
principles used in preparation of the Pro-Forma May 3 Balance Sheet set out in
Exhibit 2.8 (the “Accounting Principles”). Conversions of any amounts which are
not in US-Dollar shall be converted at the rate officially determined therefore
by the European Central Bank, or failing such official rate, published in the
Financial Times, for the Closing Date.

 

2.9 Review of Closing Date Statement

 

  (a) Upon delivery of the Closing Date Statement, Seller shall have the
opportunity to review the Closing Date Statement during a period of 30 days
after such delivery. If Seller believes that the Closing Date Statement has not
been prepared in accordance with the Accounting Principles or Purchaser’s
calculation of any item or amount contained in the Closing Date Statement (as
delivered by Purchaser pursuant to Section 2.7) is not correct, Seller may,
within such 30 day period, deliver a notice to Purchaser disagreeing with
Purchaser’s calculation and setting forth Seller’s calculation of the relevant
items or amounts. Any such notice of disagreement shall specify, in reasonable
detail, those items or amounts as to which Seller disagrees, and Seller shall be
deemed to have agreed to all other items and amounts contained in the Closing
Date Statement delivered by Purchaser pursuant to Section 2.7.

 

  (b) Purchaser shall, upon Seller’s reasonable advance notice and during normal
business hours, provide Seller and its representatives access to all relevant
books and records of the Company and allow them interviews with the Company’s
managing directors and employees, to the extent reasonably necessary and
practicable for the purpose of Seller’s review pursuant to Section 2.9 (a).

 

2.10 Dispute Resolution

 

  (a)

If Seller has duly delivered a notice of disagreement in accordance with
Section 2.9 and the Parties are unable to reach an agreement within a period of
30 days following the delivery of such notice, either Party may refer the
remaining differences to an internationally recognized firm of independent
public accountants (the “Accounting Firm”). If the Parties cannot mutually agree
upon the Accounting Firm within two weeks after either Party has requested its
appointment, the Accounting Firm shall be appointed, upon request of either
Party, by the Institute

 

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of Chartered Accountants (Institut der Wirtschaftsprüfer in Deutschland e.V.) in
Düsseldorf (Germany).

 

  (b) Purchaser and Seller shall cooperate with and assist, and shall cause
their respective accountants and Company to cooperate with and assist, the
Accounting Firm in the conduct of its review. Such cooperation and assistance
shall include, without limitation, the making available to the Accounting Firm
of all relevant books and records of the Company and any other information
relating to the Company.

 

  (c) The Accounting Firm, acting as an expert (Schiedsgutachter) and not as an
arbitrator, shall, based on the Accounting Principles, decide whether and to
what extent the Closing Date Statement requires adjustment. The Accounting Firm,
in making its determination, shall only take into account any remaining
differences submitted to it and shall limit its determination to the scope of
the dispute between the Parties.

 

  (d) The Parties shall instruct the Accounting Firm to deliver its written
opinion (including reasons for the Accounting Firm’s decision on each disputed
item) to them no later than two months after the dispute has been referred to it
(or within any other period of time mutually agreed). The decision of the
Accounting Firm shall be conclusive and binding on the Parties (within the
limits set forth in Section 319 of the German Civil Code (BGB)) and shall not be
subject to any appeal. The fees and disbursements of the Accounting Firm shall
be shared between Seller and Purchaser in proportion to their respective success
and defeat.

 

2.11 Settlement

The Net Working Capital and the Deferred Revenue Excess (if any) shall be
finally established by

 

  (a) Seller pursuant to Section 2.5;

 

  (b) agreement of the Parties pursuant to Section 2.5;

 

  (c) the Closing Date Statement delivered by Purchaser, if no notice of
disagreement with respect thereto is (duly and within the relevant time period)
delivered pursuant to Section 2.9; or

 

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  (d) the Accounting Firm’s calculation delivered pursuant to Section 2.10.

On such basis, (i) if the Net Working Capital is outside the NWC Corridor
(x) Seller shall pay to Purchaser such amount which falls short of the NWC
Corridor and (y) Purchaser shall pay to Seller such amount which exceeds the NWC
Corridor, and (ii) the Seller shall pay to the Purchaser the amount of the
Deferred Revenue Excess (if any), (the payments referred to in (i) and
(ii) above each an “Adjustment Payment”) and (iii) any Adjustment Payment made
pursuant to Section 2.5 shall be accordingly adjusted, if necessary. For the
avoidance of doubt, payments pursuant to this Section 2.11 shall be made in
Euro. Neither Party shall be entitled to exercise any right of set-off or
retention right with respect to its payment obligation pursuant to this
Section 2.

Section 3

Closing

 

3.1 Place and Time of Closing

The consummation of the transactions contemplated by this Agreement, as set
forth in Section 3.4 below (the “Closing”), shall take place at the offices of
Hengeler Mueller in Munich at 10 a.m. CET within five Business Days after which
all the conditions set forth in Section 3.2 below are met, or at any other place
or time as the Parties may mutually agree upon. The date on which the Closing is
completed is referred to herein as the “Closing Date”.

 

3.2 Conditions to Closing

 

  (a) The obligations of Purchaser and Seller to consummate the Closing are
subject to the satisfaction of the following conditions precedent (aufschiebende
Bedingun-gen):

 

  (i) The Sold Shares may be transferred pursuant to Sections 35 et seq. of the
German Act against Restraints of Competition (Gesetz gegen
Wettbe-werbsbeschränkungen).

 

  (ii) No enforceable judgment, injunction, order or other decision by any court
or governmental authority shall have prohibited the consummation of the Closing.

 

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  (b) The obligation of Purchaser to consummate the Closing is subject to the
satisfaction of the further conditions precedent that, on the date that would be
the Closing Date pursuant to Sections 3.1 and 3.2 (a),

 

  (i) the representations and warranties of Seller contained in Section 4 shall
not be inaccurate and the covenants or other obligations of Seller shall not be
breached in a manner that would reasonably be expected to result in Losses (as
defined in Section 7.1) in an aggregate amount in excess of USD 1,000,000;

 

  (ii) no Material Adverse Change shall have occurred. For the purpose of this
Agreement, “Material Adverse Change” shall mean any event that occurs or becomes
known to Purchaser in the period between the date hereof and the Closing Date
which has a material adverse effect on the assets, financial condition, results
of operations, prospects or business operations of the Company, provided,
however, that such material adverse effect would reasonably be expected to
result in Losses in an aggregate amount in excess of USD 1,000,000, excluding
the following:

 

  (A) changes of the financial markets or of general economic conditions;

 

  (B) changes generally affecting any industry or market in which the Company
operate, unless disproportionally affecting the business of the Company;

 

  (C) natural disasters, military actions, sabotage or terrorism which neither
cause any material damage to the assets used by the Company nor materially and
disproportionally (as compared to other businesses operating in the relevant
industry) disrupt the supply of raw materials to the Company;

 

  (D) disruptions to the Company’ business which are exclusively or primarily
attributable to any breach of any of the terms of this Agreement by Purchaser

 

  (iii) the sale and transfer of the Excluded Assets by the Company provided for
in Section 6.3 have been consummated.

 

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  (c) The obligation of all Parties to consummate the Closing is subject to the
satisfaction of the further conditions precedent:

 

  (i) the Company’s work council shall have consented to the transactions
provided for in this Agreement and to certain of the Excluded Assets being
transferred to the newly established company as provided for in no. 3 of the
Recitals;

 

  (ii) The Company shall have received copies of all consents that are required
to be received by the third parties listed in Exhibit 3.2 (c) (ii) in connection
with the consummation of the transactions provided for in this Agreement .

 

  (d) To the extent permitted by applicable law, the relevant Party whose
obligations are subject to any condition to Closing may waive any such
condition. All conditions to Closing shall be deemed to be waived upon
completion of the Closing, as set forth in Sections 3.1 and 3.4.

 

3.3 Merger Control Proceedings

 

  (a) The Parties agree and shall ensure that the filing necessary in connection
with the merger control clearance referred to in Section 3.2 (a) (i) will be
made without undue delay after the date hereof. Unless otherwise agreed between
the Parties, Purchaser shall (i) prepare and (to the extent legally permitted)
make any filings, notifications and submissions under merger control laws with
Seller joining (“sich der Anmeldung anschließen”), unless excluded under such
merger control laws, and (ii) subject to the third sentence of this paragraph,
be responsible for the conduct of the merger control proceedings. Any filing,
submission or other action of any Party vis-à-vis any authority in connection
with the merger control proceedings shall require the other Party’s prior
written consent. The Parties shall inform each other of meetings, correspondence
or other communications from or to the relevant authorities and enable each
other or their counsel to take part in discussions or negotiations.

 

  (b)

The Parties shall closely cooperate in the preparation of any filing,
notification or submission in the merger control proceedings. Such cooperation
shall include, without limitation, the making available of all documents and
information reasonably requested by Purchaser in connection therewith. Without
prejudice to

 

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subsection (a) above, Purchaser shall keep Seller promptly informed about the
status of any merger control proceedings.

 

  (c) Purchaser shall be obliged to offer, or consent to, any obligations,
conditions or commitments required by any merger control authority in connection
with the clearance of the transaction contemplated hereby, if and to the extent
such obligations, conditions or commitments do not have a material effect on the
economic benefits and burdens created by the transaction contemplated hereby for
the Purchaser. Neither Party shall be under any obligation to appeal a decision
of any competent merger control authority prohibiting the Closing.

 

3.4 Actions on the Closing Date

On the Closing Date, the Parties shall take, or cause to be taken, the following
actions, which shall be taken simultaneously (Zug um Zug):

 

  (a) payment of the Purchase Price in accordance with Section 2.2 and 2.3;

 

  (b) delivery by Seller to Purchaser of a certificate of Seller, in the form
attached as Exhibit 3.4 (b) (or any other form mutually agreed between the
Parties), certifying that the representations and warranties of Seller contained
in this Agreement are still true and correct as of the Closing Date;

 

  (c) delivery by Seller to Purchaser of executed copies of the agreements
referred to in Section 6.3;

 

  (d) execution by both Parties of a certificate acknowledging the occurrence of
the Closing in accordance with the draft attached as Exhibit 3.4 (d).

Section 4

Representations and Warranties of Seller

Seller hereby represents and warrants to Purchaser in the form of independent
guarantees pursuant to Section 311 of the German Civil Code (BGB) (any such
guarantees, as contained in this Section 4, referred to herein as “Warranties”)
that the statements set forth in this Section 4 are true and correct as of the
date hereof and will be true and correct as of the Closing Date.

 

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For the purpose of this Section 4 and any other Warranties contained in this
Agreement,

 

(a) the scope and content of each Warranty of Seller contained in this Agreement
and Seller’s liability arising thereunder shall be exclusively defined by the
provisions of this Agreement (and shall, in particular, be subject to the
limitations set forth in Section 7 below), which shall be an integral part of
the Warranties of Seller, and no Warranty of Seller shall be construed as a
seller’s guarantee (Garantie für die Beschaffenheit oder Haltbarkeit der Sache)
within the meaning of Sections 443 and 444 of the German Civil Code (BGB);

 

(b) the Warranties contained in this Agreement shall, unless expressly otherwise
referred to therein, apply regardless of any knowledge or fault of Seller
(verschuldensunabhängig);

 

(c) each Warranty shall be construed independently and shall not be limited by
another Warranty or any other provision of this Agreement;

 

(d) disclosure in any Warranty or other provision of this Agreement or any
Exhibit hereto shall be deemed to be a disclosure for the purpose of any other
Warranty;

 

(e) the disclosure of any matter in any Exhibit hereto shall require a correct
and complete description of all relevant facts that would otherwise constitute a
breach of the relevant Warranty; if a Warranty states that an agreement or other
document has been delivered or otherwise been disclosed to Purchaser, such
disclosure shall include any amendment, addendum, side letter or similar
document relating thereto which is still in effect;

 

(f) “Seller’s Knowledge” shall mean the actual knowledge, as of the relevant
date, of the Seller or of any managing director (Geschäftsführer) of the Company
or any knowledge any managing director should have had if he had not failed, due
to gross negligence, to make due inquiry with respect to the relevant matter
(grob-fahrlässige Unkenntnis); and

 

(g) any reference to US-Dollar (USD) contained herein for the purpose of any
disclosure thresholds or the like shall include the equivalent in any foreign
currency officially determined therefore by the European Central Bank, or
failing such official rate, published in the Financial Times on the date hereof.

 

4.1 Organization and Authorization of Seller and Guarantor

 

  (a) Seller is a corporation duly incorporated and validly existing under the
laws of England and Guarantor is a corporation duly incorporated and validly
existing under the laws of Delaware.

 

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  (b) The execution and performance by Seller and Guarantor of this Agreement
are within Seller’s and Guarantor’s, respectively, corporate powers, do not
violate the articles of association or by-laws of Seller or Guarantor,
respectively, and have been duly authorized by all necessary corporate or other
action on the part of Seller and Guarantor. This Agreement has been duly
executed by Seller and Guarantor. Assuming due authorization and execution by
Purchaser, this Agreement constitutes, a valid and binding agreement of Seller
and Guarantor , enforceable against it in accordance with its terms.

 

  (c) Assuming compliance with any applicable requirements under merger control
laws, the execution and performance of this Agreement by Seller and Guarantor
require no approval or consent by any governmental authority or other third
party and do not violate any applicable law, decision by any court, arbitrator
or governmental authority, agreement or obligation binding on Seller or
Guarantor.

 

  (d) There is no lawsuit, investigation or proceeding pending or threatened
against Seller before any court, arbitrator or governmental authority which in
any manner challenges or seeks to prevent, alter or delay, or may otherwise have
an adverse effect on Seller’s ability to consummate, the transactions
contemplated by this Agreement.

 

4.2 Due Incorporation and Organization

 

  (a) The Company is a limited liability company (GmbH), duly incorporated and
validly existing under the laws of Germany and has all corporate powers to
conduct its business as currently conducted.

 

  (b) The Company does not hold any interest in any other company or other
entity.

 

  (c) True and complete copies of the articles of association of the Company
have been delivered to Purchaser prior to the date hereof.

 

  (d) Exhibit 4.2 (d) contains a true and correct copy, as of the date hereof,
of the excerpts from the commercial register of the Company. As of the date
hereof, no registrations or applications for registration in such register are
pending and there are no matters which are not registered therein, but with
respect to which a registration would be required under applicable law.

 

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  (e) Exhibit 4.2 (e) contains and true and complete list of all powers of
attorney issued by the Company, other than those which are shown in any registry
excerpt referred to in Section 4.2 (d) or which are limited to individual
transactions in the ordinary course of business, consistent with past practice.

 

  (f) The Company is not a party to any agreement (Unternehmensvertrag) within
the meaning of Sections 291, 292 of the German Stock Corporation Act (AktG), any
agreement under the laws of any other jurisdiction which would permit any third
party to control the Company or obligate it to transfer its profits to any such
third party, or any other agreement granting any such third party any rights in
respect of corporate governance or profits of the Company.

 

  (g) No bankruptcy, insolvency, liquidation or similar proceedings (whether
mandatory or voluntary) are pending, and no filing for such proceedings has been
made or is required, with respect to the Company. The Company has not entered
into any moratorium agreement or similar agreement with its creditors. The
Company has not stopped or suspended payment of its debts, become unable to pay
its debts or otherwise become insolvent in any jurisdiction. No assets of the
Company have been seized or confiscated by or on behalf of any third party nor
are any foreclosure, forfeiture, execution or enforcement proceedings pending or
threatened with respect to the Company or its assets. To Seller’s Knowledge,
there are no facts or events which may reasonably be expected to result in any
proceedings or other events as referred to in this Section 4.2 (g).

 

  (h) The execution and performance of this Agreement will not (i) conflict
with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice under, any agreement or other instrument to
which the Company is a party or by which it is bound or (ii) result in the
imposition of any lien or encumbrance upon any asset of the Company or otherwise
adversely affect the Company’s right to use any of the assets currently owned or
used by it.

 

4.3 Ownership of Shares; Shareholdings

 

  (a) The Sold Shares are owned by Seller and are duly authorized and validly
issued. Seller is the sole and unrestricted owner of the Sold Shares.

 

  (b)

The Sold Shares are free and clear of any liens, encumbrances, other rights of
third parties or other defects of title (Rechtsmängel), and there are no
pre-emptive

 

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rights, rights of first refusal, options, subscription rights or other rights
(whether absolute or contingent) of any third party to purchase or acquire any
of the Sold Shares. The Seller is not, with respect to the Sold Shares, bound by
any agreement (including voting trust agreements - Stimmbindungsverträge),
restrictions or obligations relating to any rights under the Sold Shares. There
are no silent partnerships in respect of the Company and no third party owns any
indirect participations (Unterbeteiligungen) in any Sold Shares.

 

  (c) The Sold Shares are fully paid and have not been repaid, neither in whole
nor in part, and there is no shareholder obligation to make any additional
payment or other contribution with respect to any of the Sold Shares.

 

  (d) The Sold Shares represent all of the issued share capital of the Company
and there are no other (including authorized or outstanding) shares of the
Company. There are no securities of the Company convertible into or exchangeable
for shares of the Company. No Company has any obligation to issue any shares or
securities convertible into or exchangeable for such shares, and no third party
has any right (whether absolute or contingent) to acquire any such shares or
securities from the Company. There are no outstanding obligations of the Company
to repurchase or otherwise acquire any shares of the Company.

 

4.4 Financial Statements

 

  (a) The annual accounts of the Company for the fiscal year ended October 31,
2007 (as audited by Ernst & Young, which has issued an unqualified auditor’s
certificate thereon) as attached hereto as Exhibit 4.4 (a) (the “Annual
Financial Statements”) have been prepared in accordance with the provisions of
the German Commercial Code (HGB) and generally accepted accounting principles as
applied in Germany, applied on a consistent basis (such consistency to include,
for the purposes of this Section 4.4, the consistent use of any discretionary
rights – Bilanzierungs- und Bewertungswahlrechte), and give a true and fair view
of the assets, financial condition and results of the operations of the Company
as of, and with respect to the financial year ending on, October 31, 2007.

 

  (b)

There are no facts or circumstances (including subsequent events -
wertaufhel-lende Tatsachen) known, or required to be known when applying due
care, by the management of the Company as of the date hereof which would,
individually or in the aggregate, require a material change to the Annual
Financial Statements, if

 

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such facts or circumstances had been known at the time when such financial
statements or reports were prepared.

 

  (c) Except as set forth in Exhibit 4.4 (c), the Company has no financial debt
vis-à-vis any third party (including any entity of the Seller’s Group). To
Seller’s Knowledge, since October 31, 2007, no liability (whether actual or
contingent) has been incurred or become known by the Company which would have to
be shown or accrued for in any balance sheet, or to be disclosed in the notes to
any financial statements, of the Company prepared as of the date hereof, except
for

 

  (i) liabilities which have been incurred since October 31, 2007, in the
ordinary course of the Company’ business; or

 

  (ii) liabilities disclosed in this Agreement.

 

  (d) The financial statements referred to in Section 4.4 (a) do not reflect any
acceleration of the collection of accounts receivable or delay in the payment of
accounts payable, as compared with the Company’s past practice.

 

  (e) All books and records (including accounting and tax records) of the
Company have been properly kept in accordance with applicable law, are in the
Company’s unrestricted possession and accurately reflect all transactions that
are required to be reflected therein pursuant to any applicable law and any
applicable accounting principles.

 

4.5 Assets

 

  (a) The Company has valid title to, and is legal and beneficial owner of, all
property and assets (whether real, personal, tangible or intangible) reflected
in the financial statements referred to in Section 4.4 (a) or acquired by it
since the relevant balance sheet date, except for properties and assets disposed
of since such balance sheet date in the ordinary course of the Company’s
business.

 

  (b)

The assets referred to in Section 4.5 (a) are not encumbered with, and the
Company is not under any obligation to grant or create, any liens, pledges,
mortgages, charges or other security interests or encumbrances in favor of any
third party, except for (i) retention of title rights in favor of suppliers,
(ii) liens, pledges or similar security rights under statutory law in favor of
mechanics, workmen, carriers, landlords and the like, (iii) liens or pledges
under the general terms and conditions

 

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of banks or other financial institutions over cash and securities deposited with
them, and (iv) the liens, pledges, other rights and encumbrances listed in
Exhibit 4.5 (b). There are no pre-emptive rights, rights of first refusal,
options or other rights of any third party to purchase or acquire any real
property or any other material assets owned by the Company or to request the
granting of any rights or encumbrances in such assets.

 

  (c) Exhibit 4.5 (c) contains a true and complete list of all real properties
owned, leased or occupied by the Company (the “Properties”) and true and
complete copies of all excerpts from the land register of all Properties owned
by the Company. As of the date hereof, such excerpts correctly reflect all facts
required to be registered therein, no applications for registration are pending
and there are no facts which are not registered therein, but would require a
registration. The Company has the right to use the Properties for the conduct of
their businesses, as currently conducted, pursuant to all applicable planning,
zoning or building laws or, if applicable, a valid and enforceable lease and are
in exclusive and undisturbed possession of the Properties. Each Property has
unrestricted access to public roads, water supply, sewer facilities,
electricity, gas, telephone and other public utilities. The Company is not a
party to any agreement providing for, or otherwise bound by, any covenant,
restriction, burden or obligation adversely affecting the use of any Property by
it (including zoning and building restrictions).

 

  (d) To Seller’s Knowledge, the fixed tangible assets which are owned or used
by the Company and are material for the Automotive Business as currently
conducted by it have no material defects, are in good operating condition and
repair (except for ordinary wear and tear) and have been properly and regularly
maintained in accordance with existing maintenance schedules, except as set
forth in Exhibit 4.5 (d). The production processes at the Company’s facilities
are certified under ISO standards.

 

  (e) The inventories of the Company have been maintained in the ordinary course
of business and are sufficient and adequate for the normal operation of their
businesses in accordance with past practice. To Seller’s Knowledge, such
inventories are not obsolete and are free from any defects and saleable or
usable in the ordinary course of business, consistent with past practice. All
trade accounts receivable of the Company arising since November 1, 2007 have
arisen from sales or services made in the ordinary course of business,
consistent with past practice.

 

  (f)

The Company has available, as owner or on the basis of valid lease, license or
similar agreements, all assets (whether tangible or intangible, including
information

 

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13 June 2008

 

 

technology and know-how and any documentation relating thereto) and services (by
employees or any third parties) which are required by it in order to continue to
conduct its Automotive Business (as currently conducted) in the ordinary course,
consistent with past practice and are material for the conduct of their
business, taken as a whole. Except as set forth in Exhibit 4.5 (f) the Company
does not require any services or licenses from the Seller’s Group or otherwise
in order to carry on its Automotive Business as currently conducted.

 

4.6 Intellectual Property Rights

 

  (a) Exhibit 4.6 (a) contains a true and complete list of all patents,
trademarks, domain names and other intellectual property rights (a) which have
been registered, or filed for registration, on behalf of the Company or
(b) which are owned by (the “Intellectual Property Rights”) or licensed to the
Company, specifying as to each, as applicable: (i) the nature of such
Intellectual Property Right, (ii) the owner of such Intellectual Property Right,
and (iii) with respect to registered Intellectual Property Rights, the
jurisdictions in which such Intellectual Property Right has been registered or
in which an application for such issuance or registration has been filed, the
product or service class (if applicable), the registration or application
numbers and any applicable termination or expiration dates.

 

  (b)

The Company is the sole and unrestricted owner of, or has valid licenses to use,
the Intellectual Property Rights, as indicated in Exhibit 4.6 (a), and all
Intellectual Property Rights are legally existing and enforceable. All
registrable Intellectual Property Rights have been duly registered or filed for
registration with the competent authority (as the case may be). The Company has
paid all registration or license fees when due and taken all other actions
necessary to validly maintain any registrations and the enforceability of all
Intellectual Property Rights, and are in compliance with all license conditions,
as applicable, with respect to any Intellectual Property Rights. Except as set
forth in Exhibit 4.6 (b), the Company has the unrestricted right to use all
Intellectual Property Rights for the conduct of the Automotive Business, as
currently conducted, in accordance with applicable law and any applicable
license conditions and such right will not be restricted or adversely affected
by the consummation of the transaction contemplated hereby. The Intellectual
Property Rights registered in the name of and/or owned by the Company are free
and clear of any rights of third parties and the Company has not granted an
exclusive or non-exclusive license with respect to any Intellectual Property
Right to any third party. None of the Intellectual Property Rights is subject to
any outstanding judgment, injunction, order or decree issued against the

 

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13 June 2008

 

 

Company which restricts the use thereof by it and, as of the date hereof, no
third party has challenged any Intellectual Property Right in writing or, to
Seller’s Knowledge, in any other manner towards the Company.

 

  (c) To Seller’s knowledge, the Company does not infringe any intellectual
property rights of any third party. As of the date hereof, no third party has
notified the Company in writing or, to Seller’s Knowledge, in any other manner
that the Company currently infringes, or has infringed in the past, any
intellectual property right of a third party, except as set forth in Exhibit 4.6
(c). To Seller’s Knowledge, none of the Intellectual Property Rights is
currently being infringed, or has been infringed during a period of five years
prior to the date hereof, by any third party.

 

  (d) The Company is entitled to all rights to any inventions made in the
conduct of its Automotive Business. No (present or former) director, officer or
employee of the Company has any rights or claims against the Company with
respect to any Intellectual Property Right, except for compensation claims under
the German Act on Employee’s Inventions (Arbeitnehmererfindungsgesetz) or
similar laws of other countries, as listed in Exhibit 4.6 (d).

 

  (e) Except pursuant to the confidentiality agreements set forth in Exhibit
4.6. (e), no know-how, trade secret or other confidential information that are
material to the Automotive Business of the Company (collectively “Confidential
Business Information”) has been made available by the Company to any third party
. To Seller’s Knowledge, no Confidential Business Information has entered the
public domain and, except as set forth above, no third party otherwise uses or
has available any Confidential Business Information. The Company has taken all
actions required in accordance with standard industry practice to protect the
secrecy, confidentiality and value of the Confidential Business Information.
None of the Company’s rights to any Confidential Business Information has been
challenged in writing or, to Seller’s Knowledge, otherwise by any third party.

 

  (f) Except as set forth in Exhibit 4.6 (f), the hardware, software and other
information technology owned, licensed or used by the Company meet all
requirements of the Company’s business, as currently conducted, and, to Seller’s
knowledge, are free from any defects that may materially affect their
functionality. The Company has licensed from the respective owner all copies of
any third party software used by the Company. The Company operates appropriate
data storage and disaster recovery plans as necessary to enable it to carry on
the conduct of its business in the normal course in the event of any failure of
its information technology.

 

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  (g) After consummation of this Agreement, the Company will either own or hold
a license for any intellectual property necessary for the Company to carry out
the Automotive Business in the same manner it had carried out such business
prior to the Closing Date, it being understood that software licenses described
in Exhibit 4.6 (g) are maintained under an umbrella agreement with Guarantor and
will not be available to the Company following the Closing Date.

 

4.7 Governmental Permits; Compliance with Laws; State Aids

 

  (a) The Company has all governmental, regulatory and other permits, licenses,
authorizations and consents which are required by them under any applicable law
in order to operate its Automotive Businesses as currently conducted (the
“Permits”). No Permit has been cancelled, revoked or restricted by any competent
authority. No such authority or other third party has notified the Company that
it will or may cancel, revoke or restrict and Permit, nor, to Seller’s
Knowledge, are there any other circumstances which may reasonably be expected to
result in any such cancellation, revocation or restriction.

 

  (b) To Seller’s knowledge, the business of the Company is, and (to the extent
any non-compliance in the past may still be relevant as of today or in the
future) has been, conducted, in all material respects, in compliance with all
applicable laws (such term to include, for the purpose of this Agreement, any
statutory or other laws, regulations orders and other binding rules relating to
any matter whatsoever) in all countries in which the Company operates and all
Permits. As of the date hereof, the Company (i) has not received any pending
notice of any failure to comply with such laws or Permits nor (ii) is, to
Seller’s Knowledge, under investigation with respect to any such failure.

 

  (c) The Company has not at any time received or applied for or could become
liable for the repayment of any state aids or subsidies (including, for the
avoidance of doubt, favourable tax treatment).

 

4.8 Litigation, Disputes

Except as set forth in Exhibit 4.8, as of the date hereof,

 

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  (a) the Company is not a party to, or otherwise involved in, any civil,
criminal or administrative action, suit, investigation or other proceeding
before any court, arbitrator or governmental authority;

 

  (b) no proceeding as referred to in Section 4.8 (a) has been threatened or
announced against the Company in writing or, to Seller’s Knowledge, in any other
manner; and

 

  (c) the Company is not subject to any judgment, order, decree or settlement
that imposes any outstanding or ongoing obligation on the Company.

 

4.9 Employees

 

  (a) Exhibit 4.9 (a) contains a true and complete list, as of the date hereof,
of all directors and officers of the Company and of all employees of the Company
whose annual salary (including any fixed minimum bonus, but excluding any
variable or discretionary bonus and any benefits) is in excess of USD 50,000
(the “Key Employees”). True and complete copies of the employment agreements of
all Key Employees, as in effect as of the date hereof, including all amendments
and side agreements, have been delivered to Purchaser prior to the date hereof.
As of the date hereof, no notice of termination of any such employment agreement
has been given, and to Seller’s Knowledge, no Key Employee has expressed the
intention to terminate his or her employment with the Company.

 

  (b)

Exhibit 4.9 (b) contains a description, true and correct in all material
respects as of the date hereof, of (i) the number of employees of the Company,
employed at each of the locations where the Company operates, and split up
between Automotive Business and Non-Automotive Business and (ii) the aggregate
salary and other payments to directors, officers and employees per Company for
the periods from January 1 to December 31, 2007, and since January 1, 2008. A
true and complete list, as of May 21, 2008, of all directors, officers and
employees of the Company, not setting forth their names, but prepared on an
anonymous basis, including their functions, age, date of employment, annual base
salaries, maximum amount of performance-related payments, agreed severance
payments upon termination of employment and special status (such as parental
leave, disability, part-time) and of all free-lancers (freie Mitarbeiter) and
temporary workers (Leihar-beitnehmer) has been delivered to Purchaser prior to
the date hereof. To Seller’s knowledge, no free-lancer or consultant employed by
the Company at any time

 

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prior to the Closing Date qualifies as an employee under any applicable law, and
no temporary worker has a right to demand employment by the Company.

 

  (c) Exhibit 4.9 (c) contains a true and complete list, as of the date hereof,
of all collective bargaining agreements, agreements with unions or workers’
councils, social plans, and material standard practices (e.g. betriebliche
Übungen, Gesamt-zusagen) by which the Company is bound. The Company is in full
compliance with any such agreements, plans, schemes and practices.

 

  (d) Exhibit 4.9 (d) sets forth all redundancy, work-sharing or short-time
working schemes of the Company which are currently in effect or have been
resolved or implemented within a period of five years prior to the date hereof.
The Company has no outstanding obligation or liability under such schemes. The
Company is not bound by any restriction as to the closure, downsizing or other
restructuring affecting the workforce of any of its businesses (or portions
thereof), except for any restrictions under mandatory law.

 

  (e) Except as set forth in Exhibit 4.9 (e), the Company is not experiencing,
nor has experienced during a period of five years prior to the date hereof, and,
to Seller’s Knowledge, there is no basis to expect the Company to experience,
any strike or lock-out, any dispute before any court, arbitrator or mediator or
any other dispute relating to employment or labor matters of a general nature
(including with respect to lay-offs, restructurings, employee benefits, general
working conditions, unfair labor practices or discrimination) or affecting a
significant number of employees.

 

  (f)

Exhibit 4.9 (f) correctly sets forth all (i) pension commitments (including
retirement, widows’, dependants’ and disability pensions) and old-age part-time
schemes and (ii) other employee benefit plans (whether funded or unfunded, on a
defined benefit or defined contribution basis, or otherwise) relating to
retirement, death, disability, medical benefits or anniversary payments by which
the Company is bound (including plans which have been terminated, but in respect
of which the Company may still have any obligations or liabilities), other than
(A) mandatory employer’s contributions to statutory benefit schemes, (B) defined
contribution schemes or (C) sick pay required under mandatory law. All the
commitments, schemes and plans set forth, or required to be set forth, in
Exhibit 4.9 (f) (the “Benefit Plans”) are and have been established, amended and
operated in accordance with their terms and applicable law. To Seller’s
Knowledge, any adjustments of pensions under the Benefit Plans have been made to
the maximum extent permitted by applicable law. True and complete copies of any
actuarial reports

 

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relating to the Benefit Plans have been delivered to Purchaser prior to the date
hereof. All relevant data supplied by the Company to the actuaries for the
purpose of preparing such reports are true and correct in all material respects
as of the dates as of which such reports have been prepared. To Seller’s
Knowledge, any pension or other obligations of the Company under the Benefit
Plans have been fully reflected in the Reference Financial Statements up to the
maximum amount permitted under applicable law. All contributions to the pension
security fund (Pensionssicherungsverein) (or similar funds or institutions under
the laws of any jurisdiction other than Germany) have been duly and timely paid.

 

  (g) Seller, in respect of any directors, officers or employees of the Company,
has not implemented any stock option plans or profit participation plans, and is
not and will not become liable under, with regard to or to make for the loss of
coverage under the stock options granted by the Guarantor to certain of its
directors, officers and employees. Except as set forth in Exhibit 4.9 (g),
(i) the Company has not granted to any employee any termination period beyond
the relevant period under applicable law, and (ii) the Company has not granted
any loans to directors, officers or employees.

 

  (h) Except as set forth in Exhibit 4.9 (h), neither the Company nor Seller has
granted or promised any compensation, severance or other payment or benefit to
any (current or former) managing director or employee of the Company in
connection with the transaction contemplated hereby or any divestiture of the
Company. Neither the execution of this Agreement nor the consummation of the
transaction contemplated hereby will result in, or accelerate, the payment or
vesting of any benefit to any director, officer or employee. No employment terms
of any employee of the Company have been varied (either by way of amendment or
the exercise of any discretion) in connection with or with a view to the
transaction contemplated hereby or any divestiture of the Company. No member of
the Seller’s Group has offered, or committed to offer, to employ (whether as an
officer, employee or consultant) any Key Employee or other employee of the
Company at any time after the Closing Date. No employees have been relocated
from the Seller’s Group to the Company, or from the Automotive Business to the
Non-Automotive Business, or vice versa.

 

4.10 Agreements

 

  (a)

Exhibit 4.10 (a) contains a true and complete list of all of the following
agreements or arrangements, whether written or non-written, by which the Company
is

 

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bound or under which it may still have any obligation or liability (the
“Material Agreements”):

 

  (1) agreements relating to the acquisition, sale or encumbrance of any
shareholding, business or real estate or of any other fixed asset, provided the
consideration or value of such other fixed asset exceeds USD 50,000;

 

  (2) joint venture, partnership, shareholder or cooperation agreements relating
to the conduct of a material part of the business of the Company;

 

  (3) rental and lease agreements (i) which relate to real estate or (ii) which
relate to other fixed assets and, individually, provide for annual payments of
USD 20,000 or more;

 

  (4) licence agreements (whether as licensor or licensee) regarding any
intellectual property rights or know-how (other than licence agreements for
standard application software, entered into in the normal course of business);
secrecy or confidentiality agreements relating to technical or other know-how;

 

  (5) loan agreements (including those relating to any intercompany debt towards
a member of the Seller’s Group), bonds, notes or other agreements relating to
financial debt (including finance leases, sale and leaseback arrangements, asset
backed financing or securitisation agreements); agreements which grant or create
any lien, pledge or other security interest in any assets of the Company in
respect of any such financial debt;

 

  (6) agreements with distributors, sales agents and other resellers or sales
representatives;

 

  (7) frame or master agreements with the ten major suppliers and customers of
the Company (based on the aggregate consolidated sales in 2007) or with any
other suppliers of any products or materials which are material for the business
of a Company and may not be replaced on the market on equivalent terms (the “Key
Suppliers” or “Key Customers”);

 

  (8) agreements with governmental authorities (including anti-trust
authorities) or any entities controlled by any governmental authority which
relate to any regulatory matter or other matter governed by public law;

 

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  (9) any long-term agreements (Dauerschuldverhältnisse) of any type other than
as referred to above which provide for an annual consideration in excess of USD
20,000 and may not be terminated by the Company on less than six months’ notice
and without penalty.

 

  (10) agreements with (i) Seller or any other member of the Seller’s Group
(including service agreements or arrangements relating to group charges, but
except for normal orders of supply in the ordinary course of the Company’s
business and on arm’s length terms), (ii) any director or officer of the
Seller’s Group or (iii) any person related (nahestehend) to an entity or person
referred to in (i) and (ii);

 

  (11) guarantees, letters of credit, indemnities or suretyships issued by the
Company or agreements under which the Company provides a security interest in
any of its assets, in each case with respect to any indebtedness of a third
party; subordination agreements (Rangrücktrittserklärungen);

 

  (12) agreements relating to forward transactions, futures, options, swaps or
other derivatives or hedging arrangements;

 

  (13) agreements with consultants or advisors;

 

  (14) agreements including territorial restrictions in supplier or reseller
agreements) that materially limit the freedom of a Company to compete in the
Automotive Business or geographic area or with any third party;

 

  (15) agreements entered into with any public entity (öffentlicher
Auftraggeber) within the meaning of Section 98 of the German Act against
Restraints of Competition (Gesetz gegen Wettbewerbsbeschränkungen);

 

  (16) agreements which are material for the business of the Company and which
may be terminated, modified or renegotiated by the other party, or provide for
any other adverse consequence for the Company (including the loss of any right
or benefit), as a result of any change of control of the Company;

 

  (17) agreements entered into outside the ordinary course of a Company’s
business.

 

  (b)

True and complete copies of all written Material Agreements and true and correct
descriptions of the material terms of all non-written Material Agreements, as
presently

 

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in effect, have been delivered to Purchaser prior to the date hereof. All
Material Agreements have been validly entered into on behalf of the Company and
are in full force and effect and fully enforceable in accordance with their
terms. Unless otherwise disclosed in Exhibit 4.10 (b), (i) no written notice of
termination has been given, nor has any such termination been threatened or
announced, to a Company with respect to any Material Agreement and (ii) neither
the Company nor, to Seller’s Knowledge, any third party to any Material
Agreement is in default or breach under any such agreement.

 

4.11 Insurance Coverage

 

  (a) Exhibit 4.11 contains a true and complete list of all insurance policies
relating to the assets, business or operations of the Company (the “Insurance
Policies”), setting forth for each the insurer, insured party, policy number,
insured risk and amount, applicable deductibles and annual premium. The
insurance coverage of the Company is, and has been in the past, sufficient to
comply with the requirements of any applicable law and any agreement by which
the Company is bound, and the coverage thereunder is, and has been, of the type
and amounts to that which is customarily maintained by companies conducting
businesses similar to those of the Company.

 

  (b) To the extent indicated in Exhibit 4.11, true and complete copies of the
Insurance Policies have been delivered to Purchaser prior to the date hereof.
All Insurance Policies are in full force and effect and no notice of
cancellation or termination has been issued or received by the Company. The
Company has duly paid all premiums and is in compliance with all other
obligations under such insurance policies (including all obligations relating to
any notifications and other actions required for the insurance coverage). Except
as set forth in Exhibit 4.11, no Insurance Policy will terminate or may be
terminated or modified by the insurer, or will result in a discontinuation of
coverage of the Company as a result of the consummation of the transactions
contemplated by this Agreement. Coverage under all Insurance Policies, as in
effect as of the Closing Date, will continue, in the event of their termination,
with respect to events occurring prior to their termination.

 

  (c) As of the date hereof, no claims by the Company are pending under any of
such policies.

 

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4.12 Product Liability and Warranty

Except as disclosed in Exhibit 4.12,

 

  (a) no product liability claims and no product warranty claims have been
asserted against the Company since January 1, 2003;

 

  (b) since January 1, 2003, the Company has not recalled, or received any order
from any governmental authority or request from any other party to recall, any
of the products manufactured and delivered by it;

 

  (c) to Seller’s knowledge, the products manufactured or delivered by the
Company prior to the Closing Date do not have any defects which will result, or
may reasonably be expected to result, in any claim as set forth in paragraph
(a) or will require the Company to recall any of such products under applicable
law, industry standards or prudent business practice.

 

4.13 Certain Transaction Related Fees and Expenses

The Company has no obligation or liability to pay any fees or commissions or to
reimburse any monies to any broker, finder, agent or other third party
(including any member of the Seller’s Group) with respect to this Agreement or
the transaction contemplated hereby.

 

4.14 Conduct of Business since October 31, 2007

In the period between October 31, 2007 and the date hereof, except as disclosed
in Exhibit 4.14 and other than the sale and transfer of the Excluded Assets
provided for in Section 6.3, the business of the Company has been conducted with
the due care of a prudent business person and in the ordinary course, in a
manner consistent with past practice, and the Company has not taken, or
committed to take, any of the following actions nor has any of the following
events occurred with respect to the Company:

 

  (a) any merger, spin-off or similar corporate reorganization; any other
material restructuring of the business organization of the Company (whether or
not requiring any corporate action);

 

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  (b) any declaration or payment of dividends or any profit transfer to any
member of the Seller’s Group; any repayment or redemption of any shares in the
Company; any payment or transfer to, or other transaction with, any member of
the Seller’s Group (or any of the persons referred to in Section 4.10
(a) (10) not made on arm’s length terms;

 

  (c) any acquisition, encumbrance or divestiture of (i) a shareholding in any
other entity or any business or (ii) any other fixed asset;

 

  (d) any incurrence by the Company of any indebtedness for borrowed money or
any other financial debt in addition to any indebtedness shown in the Annual
Financial Statements;

 

  (e) any guarantee or the granting of any security interest (i) by the Company
in respect of any indebtedness of any third party or (ii) by any third party
(including any member of the Seller’s Group) in respect of any indebtedness of
the Company;

 

  (f) any investment in, or the making of any loan to, any other company or
person;

 

  (g) any acceleration of the collection of accounts receivable or delay in the
payment of accounts payable, as compared with past practice; any failure to
maintain inventory on a normal level, consistent with past practice;

 

  (h) any lay-off with respect to a significant part of the workforce of the
Company; any action qualifying as a change of operations (Betriebsänderung)
within the meaning of Section 111 of the German Shop Constitution Act
(Betriebsverfas-sungsgesetz) or other restructuring or action materially
affecting the workforce which requires any consent by or consultation with any
body of employee representatives;

 

  (i) any change in, or commitment to change, any compensation or benefit or the
terms of employment of any Key Employee or of a significant number of other
employees, other than normal salary increases or as a result of normal
promotions in the ordinary course of business; any implementation of, or change
in, any pension or other employee benefit plan;

 

  (j) any change in any method of accounting or accounting practice or policy,
other than as required by a concurrent change of general accounting principles;

 

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  (k) any defection of, or material reduction of the business dealings with, any
material supplier or customer of the Group; any notice by any of such suppliers
or customers to the Company (made in writing or to Seller’s Knowledge, in any
other manner) that it intends to so terminate or reduce its business dealings
with the Company;

 

  (l) any damage, destruction or other casualty loss (whether or not covered by
insurance) which is in excess of USD 25,000 or which otherwise adversely
affects, or may reasonably be expected to adversely affect, the business
operations of a Company, consistent with past practice; or

 

  (m) any Material Adverse Change.

 

4.15 Tax Matters

 

  (a) All tax returns required to be filed with any taxing authority by or on
behalf of the Company have been prepared diligently and in good faith, are true
and correct and have been filed when due.

 

  (b) The Company has timely paid when due all taxes shown as payable by it on
any valid and enforceable tax assessment notice issued by any taxing authority
or on any tax return filed by it with any taxing authority.

 

  (c) As of the date hereof, no tax audit, investigation, dispute or other
proceeding is pending in respect of the Company and the Company has not been
notified by any taxing authority that such authority intends to commence any
such proceeding.

 

  (d) The Company has not paid or become liable to pay, and, to Seller’s
Knowledge, there are no circumstances by reason of which the Company is or might
be likely to become liable to pay penalty or surcharge.

 

  (e) To Seller’s Knowledge, the Company has no liability for the Taxes of any
other party, whether as a transferee or successor, by contract or otherwise.

 

  (f) The Company is not a party to, or bound by, or has any obligation under,
any tax allocation or tax sharing agreement or any similar contract or
arrangement that obligates it to pay or reimburse any tax or make any payment
computed by reference to any tax, taxable income or taxable loss of any other
party.

 

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  (g) The Company has not entered into any outstanding agreements, waivers or
arrangements with any taxing authority.

 

  (h) Neither the Seller nor the Company has taken any measures or entered into
any transaction which may be regarded as resulting in a constructive dividend
(or comparable instrument in any jurisdiction other than Germany) by the
relevant taxing authorities, and all intercompany transactions between any
member of the Seller’s Group and the Company have been entered into and
performed on arm’s length terms and can sufficiently be documented vis-à-vis tax
authorities in order to be recognized by the tax authorities.

 

4.16 Environmental Matters

 

  (a) The following terms, as used in this Agreement, shall have the following
meanings:

“Environmental Contamination” means any Hazardous Materials (as defined below),
pollutants, contaminants or other substances that are existing in the soil,
buildings or installations, groundwater or surface water or air and are required
to be cleaned up, contained or investigated or otherwise remedied or addressed
by the Company pursuant to any Environmental Law (as defined below);

“Environmental Law” means any law or regulation or other legally binding rule
imposing standards of conduct, technical standards or liability with respect to,
or otherwise relating to, any Environmental Matter, as in effect at the relevant
time;

“Environmental Matter” means any matter which relates to the use, handling,
manufacturing or generation, distribution, collection, transportation, storage,
disposal, clean-up or release of Hazardous Materials or waste, to health and
safety or otherwise to the protection of the environment;

“Environmental Permit” means any permit required under any Environmental Law.

“Hazardous Materials” means dangerous substances and preparations as defined in
Article 2 (2) of the European Community Council Directive 67/548 EEC, as amended
from time to time, and any other substances that are classified as dangerous or
hazardous or are regulated in any manner under any applicable Environmental Law.

 

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  (b) Except as disclosed in Exhibit 4.16,

 

  (i) To Seller’s Knowledge, the Company has obtained all Environmental Permits
required for its operations (as conducted from time to time) in accordance with
all applicable Environmental Laws and is, and during a period of five years
prior to the date hereof has been, in compliance with the terms of such permits
and with all other applicable Environmental Laws.

 

  (ii) The Company is not involved, and since 2003 has not been involved, in any
action, suit, investigation or proceeding by or before any governmental
authority or third party which relates to any Environmental Matter for which the
Company could be responsible or liable under any Environmental Law, and the
Company has not received any claim or notice by any governmental authority or
third party which alleges a violation of any Environmental Law or Environmental
Permit by the Company.

 

  (iii) No environmental audit or investigation has been conducted within the
past five years by Seller, the Company or any third party of any property,
building or facility owned or leased by the Company; true and complete copies of
all reports of any such environmental audits (as set forth in Exhibit 4.16) have
been delivered to Purchaser prior to the date hereof.

 

  (iv) During a period of five years prior to the date hereof, no Company has
used any property, building or facility for the storage or treatment of
Hazardous Materials or disposed of any property, building or facility used for
such purpose.

 

  (v) To Seller’s Knowledge, the Properties and the buildings and facilities
thereon are free from any Environmental Contamination. The Property owned by the
Company in Amerang was, prior to its occupation by the Company’s legal
predecessor, undeveloped land not used for industrial, commercial or other
purposes.

 

4.17 Disclosure

 

  (a)

To Seller’s Knowledge, none of the documents and other information delivered to
Purchaser and its representatives prior to the date hereof in connection with
the transactions contemplated by this Agreement contains an untrue statement of
a

 

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material fact in respect of the Company or omits to state a material fact
necessary to make any information therein not misleading.

 

  (b) To Seller’s Knowledge, except as disclosed in this Agreement or disclosed
to Purchaser or its representatives in writing prior to the date hereof, there
are no facts or events specifically relating to the Company or its Automotive
Business (other than general market conditions or developments or changes of law
or interpretations thereof) which may reasonably be expected to have a material
adverse effect on the net worth, financial position and results of operations or
the future earnings or cash flows of the Company.

Section 5

Representations and Warranties of Purchaser

Purchaser hereby represents and warrants to Seller in the form of independent
guarantees pursuant to Section 311 of the German Civil Code (BGB) that the
statement set forth in this Section 5 are true and correct as of the date hereof
and will be true and correct as of the Closing Date.

 

5.1 Existence and Authorization of Purchaser

 

  (a) Purchaser is a corporation duly incorporated, validly existing and in good
standing under the laws of Germany (jurisdiction) and has all corporate powers
required to carry on its business as presently conducted.

 

  (b) The execution and performance by Purchaser of this Agreement are within
Purchaser’s corporate powers, do not violate the articles of association or
by-laws of Purchaser and have been duly authorized by all necessary corporate
actions on the part of Purchaser. This Agreement has been duly executed by
Purchaser. Assuming due authorization and execution by Seller this Agreement
constitutes a valid and binding agreement of Purchaser, enforceable against it
in accordance with its terms.

 

  (c) Assuming compliance with any applicable requirements under merger control
laws, the execution and performance of this Agreement by Purchaser require no
approval or consent by any governmental authority or other third party and do
not violate any applicable law or decision by any court or governmental
authority, agreement or obligation binding on Purchaser.

 

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  (d) There is no lawsuit, investigation or proceeding pending against or
threatened against Purchaser before any court, arbitrator or governmental
authority which in any manner challenges or seeks to prevent, alter or delay ,
or may otherwise have an adverse effect on Purchaser’s ability to consummate the
transactions contemplated by this Agreement.

 

5.2 Financial Capability

Purchaser has readily available funds to pay the Purchase Price.

 

5.3 Purchase for Investment

Purchaser is purchasing the Sold Shares for investment for its own account and
not with a view to any sale or distribution thereof.

Section 6

Covenants

 

6.1 Conduct of Business Prior to Closing

From the date hereof to the Closing Date, Seller shall ensure (steht dafür ein)
that the Company’s Automotive Business will be conducted in the ordinary course,
consistent with past practice and that, in particular, the Company will, except
as contemplated by this Agreement and except as set forth in Exhibit 6.1,

 

  (a) preserve its assets (other than Excluded Assets) with due care and
maintain machines and other equipment in accordance with past practice and
existing maintenance plans;

 

  (b) use its best efforts to ensure continuity in the relationships with
suppliers and customers and keep available the services of its directors,
officers and employees;

 

  (c) not take, or commit to take, any of the actions referred to in
Section 4.14 (a)-(j);

 

  (d) not incur or guarantee any financial indebtedness;

 

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  (e) not enter into any Material Agreement of the kind set out in Section 4.10
(a) (1), (2), (4), (10), (14) and (17); and

 

  (f) not reduce or materially change the existing insurance coverage.

 

6.2 Access and Cooperation Prior to the Closing Date

With regard to the Automotive Business, in the period between the date hereof
and the Closing Date, Seller shall, promptly notify Purchaser if Seller becomes
aware of any matter which is likely to result in a Material Adverse Change or a
breach of a representation, warranty or covenant of Seller contained in this
Agreement, subject to restrictions under applicable law, including but not
limited to the prohibition to implement a concentration or to anticipate such
implementation prior to merger control clearance.

 

6.3 Carve-Out

 

  (a) Prior to or on the Closing Date, the Company and an entity to be
established by the Guarantor shall enter into the Asset Sale and Transfer
Agreement (the “Asset Sale and Transfer Agreement”) attached hereto as Exhibit
6.3 (a) to sell and transfer the Non-Automotive Business as provided for in no.
3 of the Recitals.

 

  (b) Should the parties to the Asset Sale and Transfer Agreement and the
parties to the Intellectual Property Transfer Agreement have failed to duly
transfer the Excluded Assets to the respective recipient, the Parties hereto
shall be obliged to undertake whatever action is required and necessary to duly
transfer the Excluded Assets as provided for in no. 3 of the Recitals.

 

  (c)

The Parties acknowledge that the agreements listed in Exhibit 6.3 (c)/1 partly
or fully regarding the Automotive Business of the Company have been entered into
by entities of the Seller Group instead of the Company, and therefore need to be
transferred, fully or partly, (as respectively indicated in Exhibit 6.3 (c)/1 to
the Company. As of the Closing Date, the Seller shall therefore procure that
transfer and assumption agreements (“Transfer and Assumption Agreements”) in the
form attached as Exhibit 6.3 (c)/2 are entered into between the Company and the
relevant entities of the Seller Group. If and insofar the transfer of partial
transfer requires the consent of the other Party to such agreements, the Parties
shall treat each other, in their relationship inter-se, as if such agreements
had been validly transferred, as further set out in Exhibit 6.3 (c)/2. The
Seller shall procure that the

 

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relevant entities of the Seller Group duly and timely fulfil their obligations
under the Transfer and Assumption Agreements.

 

  (d) Prior to or on the Closing Date, the Guarantor and the Company shall enter
into the “Intellectual Property Transfer Agreement” attached in draft form as
Exhibit 6.3 (d).

 

  (e) In connection with carving out the Excluded Assets as provided for in no.
3 of the Recitals, the Parties are in agreement that, after the date hereof but
prior to the Closing Date, Seller, in its capacity as the Company’s shareholder,
will resolve by shareholders’ resolution attached hereto in draft form as
Exhibit 6.3 (e)/1 a distribution (Ausschüttung) of all available cash and cash
equivalents (as this term is used in the Pro-Forma May 3 Balance Sheet).
Furthermore, the Parties are in agreement that on the Closing Date Seller, in
its capacity as the Company’s shareholder, will resolve by shareholders’
resolution attached hereto in draft form as Exhibit 6.3 (e)/2 a distribution
(Ausschüttung) of of all remaining cash and cash equivalents as of the Closing
Date (except for any amounts necessary to be left in the Company so that there
is no Deferred Revenue Excess). To the extent that after the Closing Date any
accounts receivable which were sold and transferred pursuant to the Asset Sale
and Transfer Agreement are paid to the Company, the Purchaser shall procure that
the Company promptly forwards such payments to the recipient under the Asset
Sale and Transfer Agreement, it being understood that the Company and Purchaser
shall not be entitled to any set-off rights as to these payments.

 

  (f) Exhibit 6.3 (f) sets forth an illustration of carving out the Excluded
Assets on a pro-forma basis for the month ended May 3, 2008, it being understood
that the precise manner for achieving the carve-out provided for in no. 3 of the
Recitals may deviate from the manner reflected in Exhibit 6.3. (f).

 

  (g) Notwithstanding Section 6.3 (b), if, for whatsoever reason, the Sold
Intellectual Property as defined in the Intellectual Property Transfer Agreement
has not been duly and completely transferred to Guarantor and its manufacturing
partner (Plexus) on the Closing Date, Purchaser shall be obliged to cause the
Company’s management to make available to Guarantor and its manufacturing
partner at Company’s cost for a time period of 1 month after the Closing Date,
all tangible and intangible resources, including workforce, necessary and
required to duly transfer such Sold Intellectual Property to Guarantor and its
manufacturing partner, in particular the resources set forth in Exhibit 6.3 (g).

 

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6.4 Use of Seller’s Marks

As soon as reasonably practicable and in any event within six weeks after the
Closing Date, Purchaser shall take, or cause to be taken, all actions required
to change the corporate names, logos and Internet domain names of the Company so
as to no longer contain the name “Credence” (collectively, the “Seller’s Marks”)
and remove from any letterhead, website or brochure any indication that the
Company is still part of the Seller’s Group. Purchaser shall further use all
reasonable efforts to ensure that the Company will not (i) use any Seller’s Mark
in any brochures or sales literature (other than in any description of the
history of the Group or its products) or (ii) permit any reseller or sales agent
to use any Seller’s Mark (without prejudice to any contracts or commitments
existing on the Closing Date); provided, however, that the Company and their
resellers or agents shall be fully permitted to continue to use any brochures,
sales literature or letterhead containing any Seller’s Mark and to sell any
products and packaging carrying any Seller’s Mark during a period of six weeks
after the Closing Date; for the avoidance of doubt, the foregoing shall in no
way limit the right of the Company to provide service, spare parts and other
maintenance regarding the installed product base and to in this context use the
Seller’s Marks for reference.

 

6.5 Non-Solicitation

For a period of two years after the Closing Date, Seller shall not, and shall
cause the other entities of the Seller’s Group not to, neither directly nor
indirectly, actively solicit for employment (abwerben) or hire any Key Employee,
it being understood, however, that Seller and any entity of the Seller’s Group
shall be free to employ any Key Employee if the respective entity was approached
by any such Key Employee.

 

6.6 Confidentiality

For a period of three years after the Closing Date, and with respect to
technical know-how for an unlimited period of time after the Closing Date,
Seller shall keep confidential and not disclose to any third party any business
or trade secrets of the Company, other than those which have become publicly
known through no fault of the Seller’s Group or which the Seller’s Group is
required to disclose in order to comply with any legal requirements or stock
exchange regulations, it being understood, however, that the Seller and the
entities of the Seller’s Group shall be permitted to continue their current
practice to disclose information relating to the Non-Automotive Business, but
also relating to the

 

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Automotive Business, to customers provided that such customers are bound by
customary confidentiality agreements.

 

6.7 Access to Information after Closing

 

  (a) After the Closing Date, Seller shall promptly afford to Purchaser, the
Company and its representatives access to accounting, financial and other
records or information relating to the Company (and allow them to make copies
thereof), which are available to the Seller’s Group; as relates to
electronically stored data, the Seller shall provide to the Purchaser a copy of
such files.

 

  (b) After the Closing Date, Purchaser shall promptly afford to Seller and its
representatives access, upon reasonable advance notice, to accounting, financial
and other records (and allow them to make copies thereof), to the extent
necessary to the Seller’s Group in connection with any financial statements for
any period ending prior to or on the Closing Date or any audit, governmental
investigation or litigation with any third party pending prior to the Closing
Date, or initiated thereafter but relating to time periods prior to the Closing
Date.

 

  (c) Seller shall keep, and shall cause the other members of the Seller’s Group
to keep, and Purchaser shall keep, and shall cause the Company to keep, all
books and records referred to in Sections 6.7 (a) and (b) in accordance with and
during the periods required under applicable law.

 

6.8 Further Assurances; Cooperation

The Parties shall execute, or cause to be executed, all agreements and documents
and take, or cause to be taken, all other actions necessary under applicable
laws and regulations to consummate the transactions contemplated by this
Agreement.

Section 7

Indemnification by Seller

 

7.1 Indemnification for Inaccuracy of Warranties

Subject to the provisions contained in this Section 7, Seller shall indemnify
and hold harmless Purchaser and the Company from any Losses (as defined below)
asserted

 

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against, incurred or suffered by Purchaser or the Company as a result of any
inaccuracy of any Warranty contained in Section 4 or of any breach of any
covenant or other obligation contained herein; provided that Purchaser may first
request from Seller to remedy the inaccuracy within a reasonable time, in no
event exceeding twelve weeks, after Seller has been notified of such breach
pursuant to Section 7.5 below (unless such remediation would not reasonably be
possible). For the avoidance of doubt, such indemnification obligation shall
apply irrespective of any fault or negligence of Seller
(verschuldensunab-hängig). For the purpose of this Agreement, “Losses” shall
mean all liabilities, reasonable costs and expenses and other damages suffered
by the Purchaser or the Company within the meaning of Sections 249 et seq. of
the German Civil Code (BGB), it being understood, however, that lost profits
shall not be recoverable.

 

7.2 Disclosed Matters

 

  (a) Seller shall not be liable for the inaccuracy of a Warranty if Purchaser
knows of the inaccuracy or fails to know due to gross negligence; provided that
for the purpose of such knowledge, only the knowledge of the persons set forth
in Exhibit 7.2 shall be relevant.

 

  (b) Section 377 of the German Commercial Code (HGB) shall not apply.

 

7.3 Thresholds and Limitation of Liability

 

  (a) Seller shall only be liable for any Losses arising from a breach of a
Warranty of Seller contained in Section 4 if (i) each individual Loss exceeds an
amount of USD 25,000 and (ii) all Losses exceed an aggregate amount of USD
100,000 (in which cases the full amount shall be recoverable).

 

  (b) The entire liability of Seller and of any entity of Seller’s Group under
this Agreement (except for Seller’s liability and Guarantor’s corresponding
liability under Sections 1, 2.11, 3, 6.1, 6.2, 6.3 (a), 6.3 (c), 6.5, 6.6, 6.7
and 6.8) and under the Intellectual Property Transfer Agreement shall be limited
to an aggregate amount of 30 % of the Purchase Price.

 

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7.4 Limitation Periods

 

  (a) All claims of Purchaser under this Section 7 shall be time-barred
(verjähren) upon expiration of a period of 18 months after the Closing Date,
except for claims under the Warranties of Seller contained in Section 4.3
(a) and (b) (ownership of Shares and absence of third-party rights in Shares),
which shall be time-barred five years after the Closing Date.

 

  (b) Any claims of Purchaser under Section 4.15 shall be time-barred six months
after the final and binding assessment (formell und materiell bestandskräftige
Fest-setzung / bestandskräftige Festsetzung nach Außenprüfung) of the relevant
tax.

 

7.5 Indemnification Procedures

 

  (a) In the event of a breach of a Warranty of Seller contained in Section 4
which may result in Seller’s liability under this Agreement, Purchaser shall as
soon as possible but in no event later than ten days after Purchaser has become
aware of the inaccuracy, notify Seller of such breach.

 

  (b) In the event that any action, claim, demand or proceeding with respect to
which Purchaser may request indemnification pursuant to this Section 7 (a “Third
Party Claim”) is asserted or announced against the Company by any third party
(including any governmental authority), Purchaser shall (i) grant Seller and its
representatives, upon reasonable advance notice and during normal business
hours, access to all relevant correspondence with the third party and to all
other documents and employees of the Company relevant for the defense of the
claim, (ii) give Seller the opportunity to participate in all material meetings
and conferences with the third party, provided that any costs incurred by Seller
in connection therewith shall be borne by Seller, and (iii) in no event
acknowledge or settle, or permit the Company to acknowledge or settle, the Third
Party Claim without Seller’s prior written consent, which shall not be
unreasonably withheld.

 

  (c) In addition, Seller shall have the sole power to direct and control the
defense of the Third Party Claim at its own cost. Such power shall include,
without limitation, the right to appoint and instruct counsel and to request
that the third party claim be litigated or settled in accordance with Seller’s
instructions. In conducting such defense, Seller shall comply with any
applicable law, consult with Purchaser on any material action in connection with
the defense and have due regard to the reasonable business interests of
Purchaser.

 

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  (d) The failure of Purchaser to comply with any of its obligations under
Section 7.5 (a) – (c) shall release Seller from its respective indemnification
obligation hereunder, to the extent that the Seller reasonably demonstrates that
it has been prejudiced by such failure.

 

  (e) Section 254 of the German Civil Code (BGB) shall remain unaffected.

 

7.6 No Additional Rights or Remedies

Purchaser’s rights arising out of or in connection with this Agreement shall be
exclusively governed by the terms of this Agreement. To the extent permitted by
law and except for any claims for fraud or wilful misconduct (Vorsatz), any
statutory rights (other than the primary obligation to fulfil (primärer
Erfüllungsanspruch)) are hereby excluded.

Section 8

Termination

 

8.1 Termination Rights

This Agreement may be terminated (Rücktritt) prior to the Closing by written
notice to the respective other Party (to be given within one month after the
termination right has arisen) as follows:

 

  (a) by Seller or Purchaser, if the approval of the German Federal Cartel
Office (Section 3.2 (a) (i)) has been refused or if such approval has not been
granted or, failing such approval, the Sold Shares may not otherwise be
transferred pursuant to Section 35 et seq. German Act against Restraints of
Competition, by September 30, 2008;

 

  (b) by Seller or Purchaser if any competent governmental authority or court
pursuant to Section 3.2 (a) (ii) has prohibited the Closing;

 

  (c) by Seller or Purchaser if the respective other Party fails to take any of
the actions referred to in Section 3.4 on the Closing Date, subject to any
applicable requirements as to the withdrawal for default (Verzug) under
applicable law.

 

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  (d) by Seller or Purchaser if the Closing did not occur on October, 15, 2008
at the latest, without this being a result of the terminating Party breaching
its obligations under this Agreement.

 

8.2 Effects of Termination

Upon notice of termination in accordance with Section 8.1, all rights and
obligations of the Parties hereunder shall terminate without any liability of
any Party to the other Party.

 

8.3 Exclusion of Other Termination Rights

No Party shall have any right to rescind or terminate this Agreement or exercise
any right that would have the same effect, except for the termination rights set
forth herein or pursuant to mandatory law, and any other termination rights
under statutory law are hereby expressly excluded.

Section 9

Guarantor’s Liability

The Guarantor shall ensure (steht dafür ein) that Seller complies with its
obligations under Section 7.

Section 10

Miscellaneous

 

10.1 Notices

All notices, requests and other communications hereunder shall be made in
writing in the English language and delivered by hand, by courier or by telefax
or (to the extent agreed between the Parties in writing with respect to a
certain matter) in electronic form (Section 127 (3) of the German Civil Code
(BGB)) to the person and the address set forth below, or such other address as
may be designated by the respective Party to the other Party in the same manner:

 

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To Seller and Guarantor:

Credence Systems Corporation

Credence Europa Limited

Chief Financial Officer

1421 California Circle

Milpitas, CA 95035

USA

Fax: +1 408 635 4989

To Purchaser:

Advantest (Europe) GmbH

Managing Director

Stefan-George-Ring 2

D-81929 Muenchen

Germany

Fax: +49-89-99312-108

 

10.2 Public Disclosure, Confidentiality

The Parties shall make any press release or similar public announcement with
respect to this Agreement only upon consultation with each other. Otherwise,
each Party shall keep confidential and not disclose to any third party the
contents of this Agreement and any confidential information regarding the other
Party disclosed to it in connection with this Agreement or its implementation,
except as expressly agreed upon with the other Party and except as may be
required in order to comply with the requirements of any applicable laws or the
rules and regulations of any stock exchange upon which any securities of the
relevant Party or any of its parent companies are listed.

 

10.3 Costs and Expenses

Any notarial fees, the real estate transfer tax and the fees of the merger
control proceedings referred to in Section 3 payable in connection with the
execution of this Agreement and the implementation of the transactions
contemplated hereby shall be borne by Purchaser. Each Party shall pay its own
expenses, including the fees of its advisors, incurred in connection with this
Agreement.

 

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10.4 Entire Agreement

This Agreement (including all Exhibits hereto) contains the entire agreement
between the Parties with respect to the subject matter hereof and supersedes all
prior agreements and understandings with respect thereto, except for the
confidentiality agreement dated No-vember 28, 2007 (and amended in April 2008),
which will remain in full force and effect until the Closing Date or, if this
Agreement is terminated pursuant to Section 8, beyond the date of such
termination.

 

10.5 Amendments and Waivers

Any provision of this Agreement (including this Section 10.5) may be amended or
waived only if such amendment or waiver is (i) by written instrument executed by
all Parties and explicitly referring to this Agreement or (ii) by notarized
deed, if required by law.

 

10.6 Governing Law; Jurisdiction

 

  (a) This Agreement shall be governed by, and construed in accordance with, the
laws of Germany (excluding conflict of laws rules).

 

  (b) Any dispute arising out of or relating to this Agreement, or the validity
thereof, shall be exclusively settled under exclusion of any state court’s
competence (except for proceedings for temporary or interlocutory relief) by
arbitration in accordance with the arbitration rules of the ICC, Paris, as
attached hereto as Exhibit 10.6 (b). The arbitral tribunal shall consist of
three arbitrators. The third arbitrator (chairman of the Arbitral Tribunal)
shall be appointed by the arbitrators nominated by Seller (including Guarantor)
(who shall have the right to nominate one arbitrator) and Purchaser (who shall
have the right to nominate one arbitrator) within six weeks after the nomination
of the second arbitrator has been confirmed by the International Court of
Arbitration. The chairman shall be eligible for the office of a judge in
Germany. The place of arbitration shall be Munich. The language to be used in
the arbitration proceedings shall be English. If and to the extent said rules do
not provide procedural regulation, the statutory provisions of the ZPO (German
Code of Civil Procedure) shall apply.

 

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10.7 Interpretation

 

  (a) The Exhibits to this Agreement are an integral part of this Agreement, and
any reference to this Agreement includes this Agreement and the Exhibits as a
whole.

 

  (b) The headings of the sections and subsections in this Agreement are for
convenience purposes only and shall not affect the interpretation of any of the
provisions hereof.

 

  (c) Terms to which a German translation has been added shall be interpreted as
having the meaning assigned to them by the German translation.

 

  (d) Words such as “hereof”, “herein” or “hereunder” refer (unless otherwise
required by the context) to this Agreement as a whole and not to a specific
provision of this Agreement. The term “including” shall mean “including, without
limitation”.

 

  (e) Any reference to “applicable law” or “applicable laws” contained in this
Agreement shall include any statute, code, regulation, directive, ordinance,
binding guideline or other legally binding general rule or decree (anwendbares
Recht), applicable in any jurisdiction and relating to any matter whatsoever.

 

  (f) For the purpose of this Agreement, a “Business Day” shall be any day other
than a Saturday, Sunday or other day on which banks in Munich, Germany, are
generally closed.

 

  (g) Where, as to past circumstances or action, the “Company” is referred to,
this shall, for the avoidance of doubt, also include the entities which have
been merged into the Company.

 

10.8 Severability

Should any provision of this Agreement, or any provision incorporated into this
Agreement in the future, be or become invalid or unenforceable, the validity or
enforceability of the other provisions of this Agreement shall not be affected
thereby. The invalid or unenforceable provision shall be deemed to be
substituted by a suitable and equitable provision which, to the extent legally
permissible, comes as close as possible to the intent and purpose of the invalid
or unenforceable provision. The same shall apply: (i) if the Parties have,
unintentionally, failed to address a certain matter in this Agreement
(Rege-lungslücke); in this case a suitable and equitable provision shall be
deemed to have been

 

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agreed upon which comes as close as possible to what the Parties, in the light
of the intent and purpose of this Agreement, would have agreed upon if they had
considered the matter; or (ii) if any provision of this Agreement is invalid
because of the scope of any time period or performance stipulated herein; in
this case a legally permissible time period or performance shall be deemed to
have been agreed which comes as close as possible to the stipulated time period
or performance.

 

10.9 Definitions

This Section 10.9 sets forth a list of the capitalized terms used in this
Agreement, indicating the sections or pages where such terms are defined. Terms
defined in the singular have a comparable meaning when used in the plural, and
vice versa.

 

Accounting Firm    Section 2.10 (a) Accounting Principles    Section 2.8
Adjustment Payment    Section 2.11 Annual Financial Statement    Section 4.4
Agreement    Page 1 Asset Sale and Transfer Agreement    Section 6.3 (a)
Automotive Business    Recitals, paragraph 3 Benefit Plans    Section 4.9 (f)
Business Day    Section 10.7 (f) Closing    Section 3.1 Closing Date    Section
3.1 Closing Date Statement    Section 2.7 Company    Recitals, paragraph 1
Confidential Business Information    Section 4.6 (e) Deferred Revenue Excess   
Section 2.4 (b) Environmental Contamination    Section 4.16 (a) Environmental
Law    Section 4.16 (a) Environmental Matter    Section 4.16 (a) Environmental
Permit    Section 4.16 (a) Excluded Assets    Recitals, paragraph 3 Guarantor   
Page 1 Hazardous Materials    Section 4.16 (a) Insurance Policies    Section
4.11 (a) Intellectual Property Rights    Section 4.6 (a) Intellectual Property
Transfer Agreement    Section 6.3 (c) Key Employees    Section 4.9 (a)

 

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Key Customers    Section 4.10 (a) (7) Key Suppliers    Section 4.10 (a) (7)
Losses    Section 7.1 Material Adverse Change    Section 3.2 (b) (ii) Material
Agreements    Section 4.10 (a) Net Working Capital    Section 2.4 (a) NWC
Corridor    Section 2.4 (a) Non-Automotive Business    Recitals, paragraph 3
Parties    Recitals Permits    Section 4.7 (a) Pro-Forma May 3 Balance Sheet   
Section 2.4 (a) Properties    Section 4.5 (c) Purchase Price    Section 2.1
Purchaser    Page 1 Purchaser’s Group    Recitals, paragraph 2 Seller    Page 1
Seller’s Group    Recitals, paragraph 2 Seller’s Knowledge    Section 4 (f)
Seller’s Marks    Section 6.4 Sold Shares    Section 1.1 Third Party Claim   
Section 7.5 (b) Transfer and Assumption Agreements    Section 6.3 (c) Warranties
   Section 4

 

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