**Exhibit 4.1**

 

**FIRST AMENDMENT TO**

 

**RIGHTS AGREEMENT**

 

FIRST AMENDMENT, dated February 19, 2004 (the “Amendment”) to Rights Agreement dated as of June 2, 1998, between Credence SystemsCorporation, a Delaware corporation (the “Company”) and Equiserve Trust Company, N.A. (formerly known as BankBoston, N.A.) as Rights Agent (the “Rights Agreement”). Capitalized terms used without definition hereinare as defined in the Rights Agreement. 

 

WHEREAS, the partieshereto now wish to amend the Rights Agreement in accordance with Section 27 of the Rights Agreement. 

 

WHEREAS, NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein and for other good and valuable consideration the receiptand sufficiency of which the parties expressly acknowledge, the parties agree as follows. 

 

1. Amendment to Section 1. Section 1 shall be amended by deleting the definition of “Acquiring Person” in its entirety and replacing it with the following: 

 

“Acquiring Person” shall mean any Person (as hereinafter defined)who or which, together with all Affiliates and Associates (as hereinafter defined) of such Person, shall be the Beneficial Owner (as hereinafter defined) of 15% or more of the shares of Common Stock of the Company then outstanding but shall notinclude (1) the Company, any Subsidiary (as such term is hereinafter defined) of the Company, any employee benefit plan of the Company or any Subsidiary of the Company, or any entity holding shares of Common Stock for or pursuant to the terms of anysuch plan, (2) any Person who was the Beneficial Owner (as hereinafter defined) of 15% or more of the shares of Common Stock outstanding as of the Close of Business (as hereinafter defined) on June 1, 1998 (a “Permitted Investor”), or anyof its Affiliates or Associates (collectively with the Permitted Investor, an “Investor Group”) to the extent that the members of an Investor Group shall beneficially own in the aggregate up to, but not exceeding, the Special ThresholdPercentage (as hereinafter defined) of the shares of Common Stock of the Company then outstanding or (3) any Person who acquires 15% or more of the shares of Common Stock of the Company then outstanding directly or indirectly from the Company in oneor more transactions approved by a majority of the Board of Directors of the Company. Notwithstanding the foregoing: 

 

(i) no Person shall become an “Acquiring Person” as the result of an acquisition of shares of Common Stock by the Company which, by reducing thenumber of shares outstanding, increases the proportionate number of shares beneficially owned by such Person to 15% or more of the shares of Common Stock of the Company then out standing; (or, in the case of an Investor Group, more than the SpecialThreshold Percentage of the shares of Common Stock of the Company then outstanding); *provided, however,* that if a Person shall become the Beneficial Owner of 15% or more of the shares of Common Stock of the Company then outstanding (or, inthe case of an Investor 

 

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Group, more than the Special Threshold Percentage of the shares of Common Stock of the Company then outstanding) byreason of share purchases by the Company and shall, after such share purchases by the Company, become the Beneficial Owner of any additional shares of Common Stock of the Company (or, in the case of the members of an Investor Group, become theBeneficial Owner of any additional shares of Common Stock of the Company), then such Person shall be deemed to be an “Acquiring Person” hereunder; and 

 

(ii) if the Board of Directors of the Company determines in good faith that a Person who would otherwise be an “Acquiring Person” (as definedpursuant to the foregoing provisions of this definition), has become such inadvertently, and such Person divests as promptly as practicable a sufficient number of shares of Common Stock so that such Person would no longer be an “AcquiringPerson” (as defined pursuant to the foregoing provisions of this definition), then such Person shall not be deemed to be an “Acquiring Person” for any purpose of this Agreement.” 

 

2. Amendment to Section 21. Section 21 shall be amended by adding thefollowing sentence after the end of the first sentence: 

 

“In the event the transfer agency relationship in effect between the Company and the Rights Agent terminates, the Rights Agent will be deemed to resign automatically on the effective date of such termination; and any required noticewill be sent by the Company.” 

 

3. Amendment to add newSection 35. The Agreement shall be amended by adding the following entirely new Section 35 Force Majeure: 

 

“Nothwithstanding anything to the contrary contained herein, Rights Agent shall not be liable for any delays or failures in performance resultingfrom acts beyond its reasonable control including, without limitation, acts of God, terrorist acts, shortage of supply, breakdowns or malfunctions, interruptions or malfunction of computer facilities, or loss of data due to power failures ormechanical difficulties with information storage or retrieval systems, labor difficulties, war, or civil unrest.” 

 

4. Miscellaneous. 

 

4.1. The terms and provisions of the Rights Agreement shall remain in full force and effect except as specifically modified by this Amendment. 

 

4.2. This Amendment may be executed in one or more counterparts anddelivered by facsimile, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties, it being understood that allparties need not sign the same counterpart. 

 

4. 3. ThisAmendment and the Rights Agreement (including schedules and exhibits hereto and thereto) set forth the entire understanding of the parties relating to the subject matter hereof and thereof and supersede all prior agreements and 

 

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understandings among or between any of the parties relating to the subject matter hereof. This Amendment may not beamended, modified, altered or supplemented other than by means of a written instrument duly executed and delivered on behalf of the parties hereto. 

 

4.4. Each party shall execute and deliver such further documents and instruments and shall take such other further actions as may be required to carry outthe intent and purposes of this Amendment. 

 

[Signature Page toFollow] 

 

 

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IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the date first above written. 

 
CREDENCE SYSTEMS CORPORATIONBy: /s/ John Detwiler    
Name: John Detwiler

Title: Senior Vice President andChief Financial Officer

 
EQUISERVE TRUST COMPANY, N.A.By: /s/ Michael J. Connor    
Name: Michael J. Connor

Title: Managing Director,Client Administration