Document:

Exhibit 10.1

 

2008
Annual Base Salaries

 

	
  Executive Officer

  	
   

  	
  Prior Base Salary

  	
   

  	
  2008 Base Salary

  	
   

  
	
  Robert J. Bujarski

  Senior Vice President, General Counsel and Corporate Secretary

  	
   

  	
  $

  	
  275,000

  	
   

  	
  $

  	
  286,000

  	
   

  
	
  Thomas J. Foley

  Chief Technology Officer

  	
   

  	
  $

  	
  278,700

  	
   

  	
  $

  	
  289,850

  	
   

  
	
  Scot M. McLeod

  Senior Vice President, Operations

  	
   

  	
  $

  	
  248,500

  	
   

  	
  $

  	
  258,440

  	
   

  
	
  John M. Radak

  Chief Financial Officer

  	
   

  	
  $

  	
  280,000

  	
   

  	
  $

  	
  290,270

  	
   

  
	
  Richard Tarbox, III

  Senior Vice President, Corporate Development Officer

  	
   

  	
  $

  	
  260,000

  	
   

  	
  $

  	
  264,770Exhibit 10.2

 

2007 Cash Bonus Awards

 

	
  Executive Officer

  	
   

  	
  2007 Cash Bonus

  	
   

  
	
  Robert J. Bujarski

  Senior Vice President, General Counsel and Corporate Secretary

  	
   

  	
  $

  	
  77,000

  	
   

  
	
  Thomas J. Foley

  Chief Technology Officer

  	
   

  	
  $

  	
  78,036

  	
   

  
	
  Scot M. McLeod

  Senior Vice President, Operations

  	
   

  	
  $

  	
  69,580

  	
   

  
	
  John M. Radak

  Chief Financial Officer

  	
   

  	
  $

  	
  71,867

  	
   

  
	
  Richard Tarbox, III

  Senior Vice President, Corporate Development Officer

  	
   

  	
  $

  	
  33,367Exhibit
10.1

EXECUTION
COPY

 

 

 

 

PURCHASE AGREEMENT

 

DATED AS OF FEBRUARY 14, 2008

 

BY AND BETWEEN

 

CREDENCE SYSTEMS CORPORATION

 

AND

 

DCG SYSTEMS, INC.

 

 

 

 

 

TABLE OF
CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  1

  	
  DEFINITIONS

  	
  3

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 1.1

  	
  Definitions

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  2

  	
  PURCHASE AND SALE

  	
  8

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 2.1

  	
  Purchased Assets

  	
  8

  
	
   

  	
  Section 2.2

  	
  Excluded Assets

  	
  10

  
	
   

  	
  Section 2.3

  	
  Assumption of Liabilities

  	
  11

  
	
   

  	
  Section 2.4

  	
  Excluded Liabilities

  	
  11

  
	
   

  	
  Section 2.5

  	
  Assignment of Contracts and Rights

  	
  13

  
	
   

  	
  Section 2.6

  	
  Purchase Price

  	
  13

  
	
   

  	
  Section 2.7

  	
  Closing

  	
  17

  
	
   

  	
  Section 2.8

  	
  Insurance Proceeds

  	
  17

  
	
   

  	
  Section 2.9

  	
  Customer Billing and Payments; Customer Orders

  	
  18

  
	
   

  	
  Section 2.10

  	
  Operation of Newco Business

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  3

  	
  REPRESENTATIONS AND WARRANTIES OF CREDENCE

  	
  19

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 3.1

  	
  Organization and Qualification

  	
  19

  
	
   

  	
  Section 3.2

  	
  Authorization; Enforceability

  	
  20

  
	
   

  	
  Section 3.3

  	
  Consents and Approvals; No Violations

  	
  20

  
	
   

  	
  Section 3.4

  	
  No Default

  	
  20

  
	
   

  	
  Section 3.5

  	
  No Undisclosed Liabilities; Absence of Changes

  	
  21

  
	
   

  	
  Section 3.6

  	
  Litigation

  	
  21

  
	
   

  	
  Section 3.7

  	
  Compliance with Applicable Law

  	
  22

  
	
   

  	
  Section 3.8

  	
  Employment Matters

  	
  22

  
	
   

  	
  Section 3.9

  	
  Taxes

  	
  25

  
	
   

  	
  Section 3.10

  	
  Intellectual Property

  	
  26

  
	
   

  	
  Section 3.11

  	
  Real Property; Tangible Personal Property

  	
  31

  
	
   

  	
  Section 3.12

  	
  Product Warranties

  	
  32

  
	
   

  	
  Section 3.13

  	
  Material Contracts

  	
  32

  
	
   

  	
  Section 3.14

  	
  Title to and Sufficiency of the Purchased Assets

  	
  33

  
	
   

  	
  Section 3.15

  	
  Financial Statements

  	
  34

  
	
   

  	
  Section 3.16

  	
  Certain Interests

  	
  34

  
						

 

i

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 3.17

  	
  Customers and Suppliers

  	
  34

  
	
   

  	
  Section 3.18

  	
  Hypervision Companies

  	
  35

  
	
   

  	
  Section 3.19

  	
  Representations Complete; Disclosure

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  4

  	
  REPRESENTATIONS AND WARRANTIES OF NEWCO

  	
  35

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 4.1

  	
  Organization

  	
  35

  
	
   

  	
  Section 4.2

  	
  Authority Relative to Agreements

  	
  35

  
	
   

  	
  Section 4.3

  	
  Consents and Approvals; No Violations

  	
  36

  
	
   

  	
  Section 4.4

  	
  Capital

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  5

  	
  COVENANTS OF ALL PARTIES

  	
  36

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 5.1

  	
  Operation of Business Prior to Closing

  	
  36

  
	
   

  	
  Section 5.2

  	
  No Solicitation or Negotiation

  	
  38

  
	
   

  	
  Section 5.3

  	
  Bulk Sales

  	
  38

  
	
   

  	
  Section 5.4

  	
  Access to Information

  	
  38

  
	
   

  	
  Section 5.5

  	
  Reasonable Efforts

  	
  39

  
	
   

  	
  Section 5.6

  	
  Confidentiality

  	
  39

  
	
   

  	
  Section 5.7

  	
  Public Announcements

  	
  39

  
	
   

  	
  Section 5.8

  	
  Fees and Expenses

  	
  40

  
	
   

  	
  Section 5.9

  	
  Notification of Certain Matters; Acceleration

  	
  40

  
	
   

  	
  Section 5.10

  	
  Tax Matters

  	
  40

  
	
   

  	
  Section 5.11

  	
  Further Assurances

  	
  42

  
	
   

  	
  Section 5.12

  	
  Credence Employee Matters

  	
  42

  
	
   

  	
  Section 5.13

  	
  Access to Records

  	
  43

  
	
   

  	
  Section 5.14

  	
  Newco Records

  	
  43

  
	
   

  	
  Section 5.15

  	
  Ordered Inventory

  	
  43

  
	
   

  	
  Section 5.16

  	
  Failure to Pay Purchase Price

  	
  43

  
	
   

  	
  Section 5.17

  	
  Hypervision Taiwan

  	
  44

  
	
   

  	
  Section 5.18

  	
  Newco Capital

  	
  44

  
					

 

ii

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  6

  	
  CLOSING CONDITIONS

  	
  44

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 6.1

  	
  Conditions Precedent to Each Party’s Obligations

  	
  44

  
	
   

  	
  Section 6.2

  	
  Conditions to the Obligations of Credence

  	
  44

  
	
   

  	
  Section 6.3

  	
  Conditions to the Obligations of Newco

  	
  45

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  7

  	
  TERMINATION; AMENDMENT; WAIVER

  	
  46

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 7.1

  	
  Termination

  	
  46

  
	
   

  	
  Section 7.2

  	
  Effect of Termination

  	
  47

  
	
   

  	
  Section 7.3

  	
  Amendment

  	
  47

  
	
   

  	
  Section 7.4

  	
  Extension; Waiver

  	
  47

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  8

  	
  INDEMNIFICATION

  	
  47

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 8.1

  	
  Obligations of Credence

  	
  47

  
	
   

  	
  Section 8.2

  	
  Certain Tax Matters

  	
  48

  
	
   

  	
  Section 8.3

  	
  Procedure

  	
  48

  
	
   

  	
  Section 8.4

  	
  Survival of Claims

  	
  49

  
	
   

  	
  Section 8.5

  	
  Notice by Seller

  	
  49

  
	
   

  	
  Section 8.6

  	
  Limitation

  	
  49

  
	
   

  	
  Section 8.7

  	
  Survival of Representations and Warranties and Covenants

  	
  50

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  9

  	
  MISCELLANEOUS

  	
  50

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 9.1

  	
  Entire Agreement; Assignment

  	
  50

  
	
   

  	
  Section 9.2

  	
  Validity

  	
  50

  
	
   

  	
  Section 9.3

  	
  Notices

  	
  50

  
	
   

  	
  Section 9.4

  	
  Dispute Resolution

  	
  51

  
	
   

  	
  Section 9.5

  	
  Governing Law

  	
  52

  
	
   

  	
  Section 9.6

  	
  Venue; Waiver of Jury Trial

  	
  52

  
	
   

  	
  Section 9.7

  	
  Descriptive Headings; Article and Schedule References

  	
  52

  
	
   

  	
  Section 9.8

  	
  Parties in Interest

  	
  53

  
	
   

  	
  Section 9.9

  	
  Counterparts; Facsimile

  	
  53

  
						

 

iii

 

TABLE OF EXHIBITS

 

	
  Exhibit A

  	
  Form of
  Assignment and Assumption Agreement

  
	
  Exhibit B

  	
  Form of
  Bill of Sale

  
	
  Exhibit C

  	
  Form of
  Copyright Assignment

  
	
  Exhibit D

  	
  Designated
  Employees

  
	
  Exhibit E

  	
  Form of
  Noncompetition Agreement

  
	
  Exhibit F

  	
  Form of
  Patent Assignment

  
	
  Exhibit G

  	
  Form of
  Transition Services Agreement

  
	
  Exhibit H

  	
  Form of
  Trademark Assignment

  
	
  Exhibit I

  	
  Purchase Price
  Allocation

  

 

TABLE OF SCHEDULES

 

	
  Schedule A

  	
  Ordered
  Inventory

  
	
  Schedule 2.1(a)

  	
  Equipment

  
	
  Schedule 2.1(c)

  	
  Assigned IP

  
	
  Schedule 2.1(d)

  	
  Inventory

  
	
  Schedule 2.1(e)

  	
  Design Tools

  
	
  Schedule 2.1(g)

  	
  Assumed Contracts

  
	
  Schedule 2.3

  	
  Assumed Liabilities

  
	
  Schedule 2.4(j)

  	
  Excluded Liabilities

  
	
  Credence Disclosure Schedule

  

 

iv

 

ASSET PURCHASE AGREEMENT

 

THIS ASSET PURCHASE AGREEMENT, dated as of February 14,
2008 (this “Agreement”), is by and between DCG Systems, Inc., a
Delaware corporation (“Newco”), and Credence Systems Corporation, a
Delaware Corporation (“Credence”). 
All capitalized terms have the meanings ascribed to such terms in Article 1
or as otherwise defined herein.

 

R E C I T A L S

 

WHEREAS, Credence desires to sell to Newco,
and Newco desires to purchase from Credence certain assets pertaining to the
Business (as defined below);

 

WHEREAS, Newco and Credence shall enter into
certain other Transaction Documents (as defined below) at Closing (as defined
below); and

 

WHEREAS, Credence and Newco desire to make
certain representations, warranties, covenants and agreements in connection
with the transaction contemplated by this Agreement as set forth herein;

 

NOW, THEREFORE, in consideration of the
foregoing premises, the mutual representations, warranties, covenants and
agreements hereinafter set forth, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:

 

ARTICLE 1

 

DEFINITIONS

 

Section 1.1                                      Definitions.  The following terms, as used herein, have the
following meanings:

 

“Affiliate” means, with respect to any
person, any person directly or indirectly controlling, controlled by or under
direct or indirect common control with such other person.

 

“Applicable Law” means, with respect
to any person, any federal, state, local or foreign statute, law, ordinance,
rule, common law, administrative interpretation, regulation, order, writ,
injunction, directive, judgment, decree or other requirement of any
Governmental Entity applicable to such person or any of its Affiliates or any
of their respective properties, assets, officers, directors, employees,
consultants or agents.

 

“Assignment and Assumption Agreement”
means that certain Assignment and Assumption Agreement to be dated as of the
Closing Date and entered into by Newco and Credence, in substantially the form
attached hereto as Exhibit A.

 

“Bill of Sale” means that certain Bill
of Sale to be dated as of the Closing Date and executed by Credence in favor of
Newco, in substantially the form attached hereto as Exhibit B.

 

3

 

“Books and Records” means with respect
to any person, all files, documents, instruments, papers, books and records,
whether in written or electronic form, relating to such person’s development
efforts, operations, affairs, financial condition, results of operations,
prospects, assets or Liabilities, including financial statements, Tax Returns,
work papers and letters from accountants and auditors, budgets, pricing
guidelines, ledgers, journals, deeds, title policies, customer and marketing materials
and information, product data sheets, performance benchmark reports, customer
account histories and profiles, sales training and presentation materials,
customer support materials, support bulletins, vendor lists, contracts,
licenses, customer lists, permits, computer files and programs, retrieval
programs, operating data and plans, projections, forecasts and environmental
studies and plans.

 

“Business” means the diagnostics and
characterization business of Credence and its Subsidiaries as currently
conducted consistent with past practices and as proposed to be conducted,
including their design debug, electrical failure analysis solutions,
diagnostics, characterization, circuit edit, and metrology solutions, and other
aspects of such business under research or development and including the
business of the former Optonics, NPTest probe and Hypervision divisions of
Credence and its Subsidiaries, and the business of Hypervision.

 

“Code” means the Internal Revenue Code
of 1986, as amended.

 

“Contracts” means all contracts,
agreements, options, leases, licenses, sales and purchase orders, commitments
and other instruments of any kind, whether written or oral, to which Credence
is a party or is otherwise bound.

 

“Copyright Assignments” means those
certain assignments to be dated as of the Closing Date and executed by Credence
in favor of Newco, each in substantially the form attached hereto as Exhibit C.

 

“Designated Employees” means the
employees of the Business identified on Exhibit D attached hereto.

 

“Environmental Liabilities” means all
Liabilities of Credence (whether such Liabilities are owed to Governmental
Entities, third persons or otherwise) relating to violations, acts or
conditions as follows: (a) attributable to any failure of Credence to
comply with any Environmental Law, (b) attributable to environmental
contamination by Credence or any other person on any property on which Credence
operates or operated or conducts or conducted business or (c) arising out
of contamination by materials disposed of at any location by or for Credence.

 

“Equipment” means all machinery,
equipment, communications equipment, computer equipment, demonstration
equipment, laboratory equipment, engineering equipment, manufacturing
equipment, office equipment and supplies, office furniture, vehicles, spare and
replacement parts, fuel and other tangible personal property (and interests in
any of the foregoing) used or useful in the Business.

 

“Governmental Approval” means an
authorization, consent, approval, permit or license issued by, or a
registration or filing with, or notice to, or waiver from, any Governmental
Entity.

 

4

 

“Hypervision” means Hypervision
Incorporated, a California corporation and wholly-owned subsidiary of Credence
formerly known as Hemingway Acquisition Corp.

 

“Hypervision Companies” means
Hypervision and Hypervision Taiwan, either of them being a “Hypervision
Company”.

 

“Hypervision Taiwan” means Hypervision, Inc.
- Taiwan Branch, a branch office of Hypervision.

 

“include” or “including” means “include,
without limitation” or “including, without limitation,” as the case may be, and
the language following “include” or “including” shall not be deemed to set
forth an exhaustive list.

 

“Indemnifiable Claim” means any Loss
for which an Indemnified Party is entitled to indemnification under this
Agreement.

 

“IRS” means the Internal Revenue
Service.

 

“knowledge” or “known” means,
with respect to any matter in question, the actual collective knowledge of such
matter of any executive officers and employees of Credence and its Subsidiaries
(other than Israel Niv) between January 1, 2007 and the Closing Date, in
the case of Credence, and the members of the Board of Directors and the
executive officers of Newco on or prior to the Closing Date, in the case of
Newco.

 

“Liability” means, with respect to any
person, any liability or obligation of such person of any kind, character or
description, whether known or unknown, absolute or contingent, accrued or
unaccrued, liquidated or unliquidated, secured or unsecured, joint or several,
due or to become due, vested or unvested, executory, determined, determinable
or otherwise and whether or not the same is required to be accrued on the
financial statements of such person.

 

“Lien” means any mortgage, pledge,
assessment, security interest, lease, sublease, lien, adverse or prior claim,
levy, charge, easement, rights of way, covenants, restrictions, rights of first
refusal, encroachments, options or encumbrances of any kind, or any defects in
title, conditional sale contract, title retention contract, or other contract
to give or to refrain from giving any of the foregoing.

 

“Loss” means any action, cost, damage,
disbursement, expense, liability, loss, deficiency, diminution in value, obligation,
penalty or settlement of any kind or nature, whether foreseeable or
unforeseeable, including but not limited to, interest or other carrying costs,
penalties, legal, accounting and other professional fees and expenses incurred
in the investigation, collection, prosecution and defense of claims and amounts
paid in settlement, that may be imposed on or otherwise incurred or suffered by
the specified person.

 

“Material Adverse Effect on Credence”
means any circumstance, change in, or effect on (or circumstance, change in or
effect involving a prospective change on) Credence or any of its Subsidiaries
that is reasonably likely to be materially adverse to (a) the operations,
assets or Liabilities, earnings, prospects, or results of operations or the condition
(financial or otherwise) of the Business, the Purchased Assets or the Assumed
Liabilities or either of the 

 

5

 

Hypervision
Companies, or (b) Credence’s ability to consummate the transactions
contemplated by this Agreement or by any of the other Transaction Documents to
which it is a party.

 

“Noncompetition Agreement” means that
certain Noncompetition Agreement to be dated as of the Closing Date and entered
into by Newco and Credence, in substantially the form attached hereto as Exhibit E.

 

“Patent Assignments” means those
certain assignments of the patents set forth on Schedule 2.1(c) to be
dated as of the Closing Date and executed by Credence in favor of Newco, each
in substantially the form attached hereto as Exhibit F.

 

“person” means an individual,
corporation, partnership, limited liability company, association, trust,
unincorporated organization or other legal entity including any Governmental
Entity.

 

“Post-Closing Tax Period” means any
Tax period (or portion thereof) beginning after the Closing Date.

 

“Pre-Closing Tax Period” means any Tax
period (or portion thereof) ending on or before the Closing Date.

 

“Pre-Closing Taxes” means (i) any
Liability for Taxes attributable to or imposed upon Hypervision or any
Subsidiary of Hypervision, for any Pre-Closing Tax Period, and (ii) any
liability or obligation of Hypervision or any Subsidiary of Hypervision for
Taxes of any person imposed on Hypervision or any Subsidiary of Hypervision
pursuant to Treasury Regulation Section 1.1502-6 (or any similar provision
under any local, state or foreign law), as a successor, by contract or
otherwise.  For purposes of Section 8.1,
the Taxes related to the portion of a Straddle Period ending on the Closing
Date shall (A) in the case of Taxes other than Taxes based upon or related
to income, sales, gross receipts, wages, capital expenditures, expenses or any
similar Tax base, be deemed to be the amount of such Tax for the entire
Straddle Period multiplied by a fraction the numerator of which is the number
of days in the Straddle Period ending on the Closing Date and the denominator
of which is the number of days in the entire Straddle Period, and (B) in
the case of any Tax based upon or related to income, sales, gross receipts,
wages, capital expenditures, expenses or any similar Tax base, be deemed equal
to the amount which would be payable if the relevant Tax period ended on the
Closing Date.  Any credits relating to a
Straddle Period shall be taken into account as though the relevant Tax period
ended on the Closing Date.

 

“Products” means all products and
services produced for or by, or provided in connection with, the Business at
any time, including all diagnostic and characterization systems and components
produced or under development in the Business, including the EmiScope, Ruby,
GlobalScan, Meridian, TriVision, NEXS, OptiFIB and P3X, and all variants
thereof and services related thereto, including those under development.

 

“Straddle Period” means any taxable
year or period beginning before and ending after the Closing Date.

 

6

 

“Subsidiary” means, with respect to
any person, (a) any corporation or limited liability company as to which
more than fifty percent (50%) of the outstanding stock or other ownership
interests having ordinary voting rights or power (and excluding stock having
voting rights only upon the occurrence of a contingency unless and until such
contingency occurs and such rights may be exercised) is owned or controlled,
directly or indirectly, by such person and/or by one or more of such person’s
direct or indirect Subsidiaries and (b) any partnership, joint venture or
other similar relationship between such person (or any Subsidiary thereof) and
any other person (whether pursuant to a written agreement or otherwise).

 

“Taxes” means (a) all foreign,
federal, state, local and other net income, gross income, gross receipts,
sales, use, ad valorem, value added, intangible, unitary, capital gain,
transfer, franchise, profits, license, lease, service, service use,
withholding, backup withholding, payroll, employment, estimated, excise,
severance, stamp, occupation, premium, property, prohibited transactions,
windfall or excess profits, customs duties or other taxes, fees, assessments or
charges of any kind whatsoever, together with any interest and any penalties,
additions to tax or additional amounts with respect thereto, (b) any
Liability for payment of amounts described in clause (a) whether as a
result of transferee Liability, of being a member of an Affiliated,
consolidated, combined or unitary group for any period, or otherwise through
operation of law and (c) any Liability for the payment of amounts
described in clause (a) or (b) as a result of any tax sharing, tax
indemnity or tax allocation agreement or any other express or implied agreement
to indemnify any other person for Taxes; and the term “Tax” means any
one of the foregoing Taxes.

 

“Tax Returns” means all returns,
declarations, reports, statements, information statement, forms or other
documents filed or required to be filed with respect to any Tax.

 

“Trademark Assignments” means those
certain assignments of the trademarks listed on Schedule 2.1(c) to be
dated as of the Closing Date and executed by Credence in favor of Newco, each
in substantially the form attached hereto as Exhibit I.

 

“Transaction Documents” means this
Agreement, the Bill of Sale, the Assignment and Assumption Agreement, the
Noncompetition Agreements, the Copyright Assignments, the Patent Assignments,
the Trademark Assignments, the Transition Services Agreement and any other
document or agreement executed in connection with any of the foregoing,
together with any Exhibits and Schedules hereto and thereto, and in each case
as modified, amended, supplemented, restated or renewed from time to time.

 

“Transfer Taxes” means all sales, use,
value-added, business, goods and services, transfer, documentary, conveyance,
or similar Taxes or expenses and all recording fees that may be imposed as a result
of the sale and transfer of the shares of Hypervision, Inc. under this
Agreement (including any stamp, duty, or other Tax chargeable in respect of any
instrument transferring property, together with any and all penalties,
interest, and additions to Tax with respect thereto).

 

“Transition Services Agreement” means
that certain Transition Services Agreement to be dated as of the Closing Date
and entered into by Newco and Credence, in substantially the form attached
hereto as Exhibit H.

 

7

 

ARTICLE 2

 

PURCHASE AND SALE

 

Section 2.1                                      Purchased
Assets.  Upon the terms and subject
to the conditions of this Agreement, at the Closing, Newco shall purchase from
Credence, and Credence shall sell, transfer, assign and deliver to Newco, free
and clear of all Liens, all of the assets, other than the Excluded Assets (as
defined below), owned, leased or licensed by Credence that are used or useful
for or in connection with the Business (collectively, the “Purchased Assets”),
including, without limitation, all of Credence’s right, title and interest in,
to and under:

 

(a)                                  all
of the fixed and other tangible personal property used or useful for or in
connection with the Business, including all computing, laboratory and other
capital assets used or useful for or in the design and development of the
Intellectual Property and the Products, all Equipment used or useful for the
Business located at Credence’s facilities at 1299 Orleans Street, Sunnyvale,
California and all Equipment described on Schedule 2.1(a);

 

(b)                                 the
Products;

 

(c)                                  all
Intellectual Property (as defined below) used or exercised in connection with,
or necessary or useful for or in connection with the Products or the Business
(including all rights, claims, credits, causes of action or rights of set-off
against third persons relating to the Purchased Assets of Credence or any of
its Affiliates, including any past or present rights to infringement claims
thereof), including all Intellectual Property listed on Schedule 2.1(c) (collectively,
the “Assigned IP”);

 

(d)                                 all
supplies, raw materials, work-in-process, finished goods, manufacturing
inventory and other inventories used or useful for or in the Business (“Inventory”),
including consigned Products and inventories, evaluation and demonstration
units/systems, including Inventory listed on Schedule 2.1(d);

 

(e)                                  all
design, development and testing tools used or useful for or in connection with
the Business, including those listed on Schedule 2.1(e);

 

(f)                                    all
information and assets, whether tangible or intangible, relating to technical
or engineering know-how of the Business or the Products;

 

(g)                                 subject
to Section 2.5 hereof, all Contracts listed on Schedule 2.1(g) (the
“Assumed Contracts”);

 

(h)                                 all
Credence Permits (as defined below) that are legally capable of being
transferred and are necessary, or required by Applicable Law, for Newco to own,
lease and/or operate or use the Purchased Assets or the Business, as
applicable, as previously or currently operated or conducted, including the
Credence Permits listed in Section 3.7 of the Credence Disclosure
Schedule;

 

(i)                                     the
originals or true copies of all Books and Records relating to the Business or
the Purchased Assets, including customer records and information, but excluding

 

8

 

those Books and Records described in Section 2.2(c) hereof
provided copies of such Books and Records are provided to Newco in accordance
with Section 2.2(c) and Section 5.14;

 

(j)                                     all
rights of Credence under express or implied warranties from third parties who
supplied Credence with any of the Purchased Assets, including those set forth
in Section 3.12(b) of the Credence Disclosure Schedule;

 

(k)                                  all
other intangible assets pertaining to the Business and the Purchased Assets,
including any claims against third parties of Credence or any of its
Subsidiaries relating to the Business, the Products, or infringement or
misappropriation (in either case whether past, present or future) of any
Intellectual Property constituting any part of the Purchased Assets;

 

(l)                                     all
proceeds payable to Credence from the sale of that certain P3X system to
Toshiba through Credence’s Japan distributor, whether such sale occurs and such
proceeds are received prior to or after the Closing (in the event such proceeds
have not been received by Credence prior to the Closing, Credence shall use its
best efforts to collect such proceeds on behalf of Newco (and shall, upon
collection, shall promptly pay such proceeds to Newco), and all rights to such
proceeds, including claims against Toshiba, the distributor or any other third
party responsible for payment thereof (including any claims against any letter
of credit or other guarantee with respect to such sale) shall be assigned to Newco
at the Closing and shall constitute Purchased Assets hereunder);

 

(m)                               cash
in an amount equal to $4,000,000, the use of which by Newco is subject to the
restrictions set forth in Section 2.10(b); and

 

(n)                                 all
of the issued and outstanding capital stock of Hypervision.  The parties acknowledge that none of the
assets or liabilities resident in Hypervision or Hypervision Taiwan are being
conveyed to Newco through an asset purchase transaction, assignment, or otherwise.

 

Further, the parties acknowledge that
Credence has current outstanding purchase orders for Inventory relating to the
Business as set forth on Schedule A hereto (“Ordered Inventory”).  Credence shall purchase and obtain for Newco
up to $1,000,000 of Ordered Inventory (valued at the price paid by Credence)
identified on Schedule A as to be delivered to Newco, at no additional cost to
or payment by Newco; and Credence shall timely pay the amounts due or that
become due with respect to such Ordered Inventory.  Except for purchase orders for Ordered
Inventory identified on Schedule A as to be cancelled by Credence, Credence
shall honor and pay for its purchase orders for all Ordered Inventory.  Credence shall promptly transfer and deliver
to Newco all Ordered Inventory delivered to Credence and that Newco elected to
receive hereunder.  At such time as any
such Ordered Inventory is delivered to Newco, Credence shall execute such
transfer documents in connection therewith as Newco shall reasonably request.  The parties hereto agree that all Ordered Inventory
delivered to Newco after the Closing constitute Purchased Assets hereunder and
no additional Purchase Price or other consideration shall be paid by Newco with
respect thereto.

 

9

 

The parties hereto also agree that Credence
shall order and pay for a “column” from A&D Company Limited (the “Column”)
pursuant to the Development Agreement entered into between Credence and A&D
Company Limited, and that the Column shall constitute a Purchased Asset
hereunder.  If the Column cannot be
delivered to Newco at the Closing, Credence shall ship it to Newco promptly
after (and in any event within 5 Business Days after) receipt from A&D
Company Limited.  Credence shall be
solely responsible for payment to A&D Company Limited for the Column and
shall pay in a timely manner any invoice for the Column from A&D Company
Limited.  If the Column is not
transferred and delivered to Newco at the Closing, Credence shall execute such
transfer documents in connection with the transfer of the Column to Newco as
Newco shall reasonably request.

 

Section 2.2                                      Excluded
Assets.  Notwithstanding Section 2.1
hereof, Newco and Credence expressly agree that the following assets and
properties of Credence (the “Excluded Assets”) shall not constitute
Purchased Assets and Credence shall retain all right, title and interest
therein and thereto (subject to Section 2.5):

 

(a)                                  all
Contracts that are not Assumed Contracts or not otherwise assigned to or
assumed by Newco pursuant to Section 2.5;

 

(b)                                 all
accounts receivable of Credence related to the Products as of the Closing,
except with respect to the system identified in Section 2.1(l);

 

(c)                                  the
minute books, stock ledgers and other stockholder records relating exclusively
to the Excluded Assets or Excluded Liabilities, accounting records, Tax
Returns, financial statements and work papers and letters from accountants and
auditors of Credence, provided that Newco shall have access to and be provided
with copies of all accounting records and Tax Returns, financial statements and
work papers and letters from accountants and auditors relating to the Business
or Purchased Assets as Newco shall reasonably request from time to time;

 

(d)                                 all
leasehold or other ownership interests in real property and any improvements
thereon;

 

(e)                                  all
amounts owing to Credence from any of its employees (including any Designated
Employees) related to their employment with Credence, including obligations to
return commission advances with respect to which the sale has subsequently been
cancelled;

 

(f)                                    except
for the equity of Hypervision, any equity or other ownership interests in,
securities of or investments in any person, including the Subsidiaries of
Credence;

 

(g)                                 all
Compensation and Benefit Plans (as defined below);

 

(h)                                 any
refund for Taxes attributable to any Pre-Closing Tax Period;

 

(i)                                     all
Insurance Policies (as defined below) in effect as of the date of this
Agreement insuring the Purchased Assets and the Business;

 

10

 

(j)                                     any
Intellectual Property relating to Credence’s automatic test equipment business;
and

 

(k)                                  the
Canon color copier located at 1299 Orleans Street, Sunnyvale, CA.

 

Section 2.3                                      Assumption
of Liabilities.  Subject to Section 2.5
hereof, upon the terms and subject to the conditions of this Agreement,
effective at the Closing, Newco shall assume only (a) the Liabilities
under the Assumed Contracts first arising out of such Assumed Contracts after
the Closing Date, (b) warranty obligations arising out of the sales orders
identified on Schedule 2.3, (c) service, parts, and maintenance
obligations arising out of the service contracts set forth on Schedule 2.3, (d) paid
time off (“PTO”) obligations of Credence with respect to the Designated
Employees as of the Closing Date of no more than $600,000 (the “Assumed PTO”)
as set forth on Schedule 2.3, (e) without duplication, Liabilities arising
out of Newco’s ownership of the Purchased Assets, but only to the extent such
Liabilities arise out of facts, events or circumstances occurring after the
Closing Date, (f) commission amounts for which Credence becomes obligated
to pay to distributors, employees, or contractors arising out of sales of
Products for which Newco receives the corresponding revenue, (g) any and
all immigration-related liabilities and obligations under H-1B, L-1, TN and F-1
visas held by, or under U.S. permanent residence (green card) processes of, any
Designated Employees that become employed by Newco as set forth on Schedule
2.3, and (h) the liabilities expressly disclosed on Schedule 2.3
(collectively, the “Assumed Liabilities”).  Without limiting the rights of Newco with
respect to Article 8, each of Hypervision and Hypervision Taiwan shall
retain its respective Liabilities, if any. 
Subject to the provisos above, Credence and Newco expressly agree that
all other Liabilities shall be Excluded Liabilities. For the purposes of this
Agreement, unless such Liability or obligation is expressly addressed in
another manner under this Agreement (e.g. by constituting an Excluded
Liability), an obligation to make a payment under an Assumed Contract shall be
deemed to first arise under such Assumed Contract after the Closing Date only
to the extent such payment obligation is due after the Closing Date and pertains
to services rendered to, property purchased by or rights enjoyed by Newco after
the Closing Date and do not include any accounts payable of Credence or its
Subsidiaries or any Liabilities arising under such Assumed Contracts prior to
or on the Closing Date.  For example, a
license fee payable quarterly under an Assumed Contract shall be pro rated over
the applicable quarter such that Credence shall be responsible for the portion
of the license fee pertaining to the portion of the quarter prior to the Closing
Date and Newco shall be responsible for the portion of the license fee
pertaining to the portion of the quarter after the Closing Date.  As another example, the payment obligations
of Credence or any of its Affiliates for inventory transferred to Newco
pursuant to this Agreement but for which Credence has not yet remitted payment
shall be Excluded Liabilities.  For
purposes of further clarity, Newco shall not assume (nor be deemed to assume)
any obligations relating to, arising out of or resulting from the Assumed
Contracts relating to, arising out of or resulting from any acts, facts,
circumstances or events occurring or failing to occur or alleged to have
occurred or to have failed to occur or any conditions existing or alleged to
have existed, each on or before the Closing Date (which Liabilities shall
remain the obligations of Credence and shall constitute Excluded Liabilities).

 

Section 2.4                                      Excluded
Liabilities.  Notwithstanding any
other provision of this Agreement to the contrary, other than the Assumed
Liabilities set forth in Section 2.3, Newco 

 

11

 

shall not assume and shall not be liable for, and
Credence shall retain and remain solely liable for and obligated to discharge
and indemnify and hold Newco harmless for, all of the debts, expenses,
Contracts, commitments, obligations and other Liabilities of any nature
whatsoever of Credence, any of its Affiliates, the Business or the Purchased
Assets (the “Excluded Liabilities”), whether known or unknown, accrued or not
accrued, fixed or contingent, including the following:

 

(a)                                  all
Liabilities under Contracts, other than those first arising under the Assumed
Contracts after the Closing Date;

 

(b)                                 any
Liability for Taxes attributable to or imposed upon Credence or any Affiliate
of Credence, or attributable to or imposed upon the Business or the Purchased
Assets for any Pre-Closing Tax Period and any liability or obligation of
Credence or any Affiliate of Credence for Taxes of any person imposed on Credence
or any Affiliate of Credence pursuant to Treasury Regulation Section 1.1502-6
(or any similar provision under any local, state or foreign law), as a
successor, by contract or otherwise;

 

(c)                                  any
Liability for accounts or trade payables of Credence, any Liability of any
Affiliate of Credence, and any Liability of Credence for broker or investment
banking fees or any other expenses of outside advisors incurred in connection
with the transactions contemplated by this Agreement;

 

(d)                                 any
Liability of Credence or any Affiliate of Credence attributable to any
Compensation and Benefit Plan maintained by Credence or any Affiliate of
Credence or related to any Designated Employee (except the PTO expressly
assumed hereby), including any earned or due commissions, salaries, bonuses or
other employment related payments related to such Designated Employee’s
employment by Credence or any of its Subsidiaries, and all amounts due to any
other employees, consultants or other service providers engaged by Credence or
any of its Subsidiaries related to the Business or otherwise arising from or
related to such engagement;

 

(e)                                  all
Environmental Liabilities, regardless of whether such Environmental Liabilities
shall arise or become known before, on or after the Closing Date;

 

(f)                                    any
claim or Liability arising from the breach or infringement or alleged breach or
alleged infringement of third party intellectual property rights as a result of
the conduct of the Business by Credence or any of its Affiliates or the use of
the Intellectual Property of Credence or any of its Affiliates by Credence or
any of its Affiliates;

 

(g)                                 all
Liabilities related to any litigation involving the Purchased Assets arising
out of or related to the conduct of the Business or use of any Purchased Assets
by Credence or its Affiliates on or prior to the Closing Date;

 

(h)                                 all
Liabilities set forth on the Credence Disclosure Schedule unless expressly set
forth in Section 2.3;

 

(i)                                     all
Liabilities, other than the Assumed Liabilities, relating to the Purchased
Assets or the Designated Employees arising out of the operation or ownership of
the

 

12

 

Business or the employment of the Designated
Employees, in each case, prior to or as of the Closing Date regardless of when
such Liabilities become known, and all Liabilities, other than the Assumed
Liabilities, relating to the employment or the termination of employment of any
employees of Credence or any of its Subsidiaries;

 

(j)                                     all
Liabilities set forth on Schedule 2.4(j);

 

(k)                                  all
Liabilities relating to the Excluded Assets; and

 

(l)                                     any
Liability of Credence or any Affiliate of Credence incurred in connection with
the making or performance of this Agreement and the transactions contemplated
hereby, except as provided in Section 5.10(d) hereof.

 

Section 2.5                                      Assignment
of Contracts and Rights. 
Notwithstanding anything in this Agreement or any other Transaction
Document to the contrary, this Agreement shall not constitute an assignment of
any Assumed Contract or any claim or right or any benefit arising thereunder or
resulting therefrom if an attempted assignment thereof, without the consent of
a party thereto, would constitute a breach or other contravention thereof or in
any way adversely affect the rights that are sought to be assigned or
transferred to Newco pursuant to this Agreement.  Credence shall use its best efforts to obtain
the consent of the appropriate persons for the assignment thereof to Newco as
Newco may request.  If such consent is
not obtained, or if an attempted assignment thereof would be ineffective or
would adversely affect the rights of Newco thereunder if there was an
assignment, so that Newco would not receive all of the rights that should be
transferred or assigned to Newco based on this Agreement, then Credence and
Newco shall cooperate in a mutually agreeable arrangement until such Assumed
Contract has expired or the consent of the other party or parties thereto to
the assignment of such Assumed Contract to Newco has been obtained under which
Newco would obtain the benefits and assume the obligations thereunder in
accordance with this Agreement (including subcontracting, sublicensing or
subleasing arrangements under which Credence would enforce for the benefit of
Newco, with Newco assuming Credence’s obligations, any and all rights of
Credence against a third person thereto). 
Credence shall promptly pay to Newco, when received, all monies received
by Credence in respect of any such Assumed Contract or any claim or right or
any benefit arising thereunder, except to the extent the same represents an
Excluded Asset.

 

Section 2.6                                      Purchase
Price.

 

(a)                                  Subject
to the provisions set forth below and the terms and conditions of this
Agreement, Newco shall pay to Credence to acquire the Purchased Assets and
Assumed Liabilities an aggregate amount in cash (the “Purchase Price”) as
follows:

 

(i)                                     $2,500,000
to be paid on the one year anniversary of the Closing, subject to adjustment
pursuant to Section 2.6(b);

 

(ii)                                  $2,500,000
to be paid on the two year anniversary of the Closing;

 

(iii)                               if
the Service Liability Cost (as defined below) is less than $4,000,000, an
amount equal to $4,000,000 minus the Service Liability Cost, to be paid on the 

 

13

 

45th day after the three year anniversary of the
Closing Date (unless objected to as described below); and

 

(iv)                              up
to $5,000,000 to be paid as set forth below (the “Earn-out Consideration”).

 

The aggregate Purchase Price payable by Newco
hereunder shall in no event exceed $10,000,000 except to the extent that Newco
becomes obligated for a payment to Credence pursuant to clause (iii) of
this Section 2.6(a).

 

“Service Liability Cost” means an amount
equal to the actual costs incurred by Newco on or prior to the three year
anniversary of the Closing Date to satisfy the warranty obligations and the
service contract obligations that constitute Assumed Liabilities under Section 2.3.  The Service Liability Cost shall be
determined by Newco and its outside independent auditors, provided that
Credence shall have the same rights to inspect records and object to such
calculation as are set forth in Section 2.6(d) with respect to
calculations of Newco Revenues.  In the
event that the Service Liability Cost exceeds $4,000,000, Credence shall pay
Newco an amount equal to the Service Liability Cost less $4,000,000, to be paid
on the 45th day after the three year anniversary of the Closing Date (unless
objected to), provided that Credence shall not be obligated to pay more than
$300,000 pursuant to this sentence.  If
Credence objects to Newco’s calculation of the Service Liability Cost, any
amount due to Credence or to Newco, shall be paid after resolution of such
objection in accordance with the provisions of Section 2.6(d).

 

(b)                                 Newco’s
obligation to pay the $2,500,000 on the first anniversary of the Closing shall
be reduced by the PTO Adjustment.  The
PTO Adjustment shall be equal to the aggregate amount of paid time off (“PTO”)
paid by Newco to Newco employees hired from Credence effective at the Closing
in connection with Newco’s involuntary termination of such employee within the
first six months following the Closing, to the extent such PTO was earned by
such employee prior to the Closing.  The
maximum amount of any PTO Adjustment shall be $250,000.

 

(c)                                  The
Earn-out Consideration shall be calculated and paid as follows (without
duplication):

 

(i)                                     Subject
to the Earn-out Limitations (as defined below) and unless contested by Credence
as set forth below, within 60 days following the third anniversary of the
Closing, Newco shall pay to Credence an amount equal to $2,000,000 plus the
product of (i) the difference between the aggregate Revenues (as defined
below) from the Acquired Products (as defined below) for the three-year period
following the Closing (the “Earn-out Period”) and $120,000,000, multiplied by (ii) 0.1.

 

(ii)                                  “Revenues”
means the aggregate revenues of Newco under generally accepted accounting
principles derived from the Products and any extensions to the Products or
additions thereto as a result of Newco research and product development
(collectively, the “Acquired Products”) (but not including revenues from other
product lines that Newco may acquire or products derived from any such other
acquired products), and revenues of 

 

14

 

Newco under generally accepted accounting principles
received in exchange for the license of Acquired IP, subject to adjustments as
described in Sections 2.6(g), 2.6(h), and 2.6(i) below.

 

(iii)                               Notwithstanding
the foregoing, no Earn-out Consideration shall be paid to Credence if the
Revenues during the Earn-out Period do not exceed $120,000,000, as may be
adjusted in the event of a Sale or a Product Line Sale, and the maximum amount
of Earn-out Consideration payable to Credence shall be $5,000,000
(collectively, the “Earn-out Limitations”).

 

(d)                                 Within
45 days following the completion of the Earn-out Period, Newco shall notify
Credence of the amount of Newco’s Revenues during the Earn-out Period.  Newco’s Revenues shall be determined by Newco
and its outside independent auditors. 
For 15 days following receipt of such notice, Credence and its auditors
shall be entitled to reasonable access to Newco’s Books and Records solely to
evaluate the amount of such Revenues contained in such notice.  If Credence does not agree with Newco’s
calculation of the Revenues, Credence may notify Newco in writing prior to the
60th day following the end of the Earn-out Period of such disagreement (an “Objection
Notice”).  In the event Credence timely
delivers an Objection Notice to Newco and if the parties cannot agree on the
amount of the Revenues during the Earn-out Period by the 75th day following the
Earn-out Period, either party may refer the matter to a mutually agreeable
independent public accountant to determine the amount of such Revenues, which
determination shall be conclusive and binding on the parties.  The parties shall bear the fees and expenses
of such accountant equally, with each party paying 50% of such fees and
expenses; provided that, Credence shall bear all the fees and expenses of the
accountant unless such accountant determines that actual Revenues for the
Earn-out Period is at least 5% higher than the amount of such Revenues as
calculated by Newco, in which case such fees and expenses shall be paid equally
by the parties.  In the event of a
dispute as described in this paragraph, Newco shall pay the Earn-out
Consideration as finally determined hereunder, within 15 days of such
determination.  If no Objection Notice is
delivered to Newco prior to the 60th day following the end of the Earn-out
Period, Newco shall pay any Earn-out Consideration payable in accordance with
Newco’s original determination of Revenues, and Credence shall thereafter have
no right to contest or object to such calculation.

 

(e)                                  Newco’s
obligations to pay the Purchase Price, including the Earn-out Consideration, is
hereby expressly subordinated in right of payment to any Newco bank or other
lender financing (including accounts receivable based credit facilities),
including equipment lease or purchase financing; provided that Newco shall
remain obligated to pay the Purchase Price in accordance with the terms of this
Agreement unless Newco is in default with respect to any such senior debt.

 

(f)                                    In
the event of a Sale (as defined below) of Newco prior to completion of the
Earn-out Period, the Purchase Price shall be accelerated and pro rated, and
thereafter no further Purchase Price shall be payable to Credence.  A “Sale” means any of the following: (i) the
sale, conveyance, or other disposition of all or substantially all of Newco’s
property or business or a merger with or into or consolidation with any other
corporation, limited liability company or other entity (other than a
wholly-owned subsidiary of Newco); or (ii) any transaction or series of
transactions in which then outstanding shares of Newco’s capital stock representing
more than 50% of the then voting power of all then outstanding shares of Newco’s

 

15

 

capital stock is transferred to an unaffiliated third
party; or (iii) the execution of an exclusive irrevocable license of all
or substantially all of Newco’s Intellectual Property with any other
entity.  For example, if a Sale occurs on
the first anniversary of the Closing, then, Credence would be entitled to be
paid at such time the sum of (1) $5,000,000, plus (2) if the Adjusted
Service Liability Cost (as defined below) is less than $4,000,000, an amount
equal to $4,000,000 minus the Adjusted Service Liability Cost, minus (3) if
the Adjusted Service Liability Cost is greater than $4,000,000, the lesser of (A) the
difference between the Adjusted Service Liability Cost and $4,000,000 and (B) $300,000,
plus (4) plus an amount constituting the Earn-out Consideration calculated
as follows (without duplication):

 

(i)                                     Subject
to the Earn-out Limitations and unless objected to by Credence (in accordance
with the same provisions as set forth above), within 60 days of the date of the
closing of the Sale (the “Sale Date”) Newco shall pay the Earn-out
Consideration as determined in Section 2.6(g)(ii) to Credence.

 

(ii)                                  In
the event of a Sale, the Earn-out Period shall be the period from the Closing
to the Sale Date, and Revenues for purposes of calculating the Earn-out
Consideration shall be calculated as follows: (i) Revenues for the
adjusted Earn-out Period divided by (ii) the number of days of such
adjusted Earn-out Period multiplied by (iii) 1096.

 

“Adjusted Service Liability Cost”
means the actual Service Liability Cost between the Closing Date and the Sale
Date, divided by the number of days between the Closing Date and the Sale Date,
multiplied by 1096.

 

(g)                                 In
the event that Newco consummates a Product Line Sale (As defined below) on or
prior to the one year anniversary of the Closing, Newco shall pay Credence 80%
of the amount received by Newco in such transaction solely for such Product
Line Sale; if any such transaction occurs after the first anniversary of the
Closing but on or before the second anniversary of the Closing, Newco shall pay
Credence 50% of the amount received by Newco in such transaction solely for
such Product Line Sale; and if any such transaction occurs after the second
anniversary of the Closing but prior to the third anniversary of the Closing,
Newco shall pay Credence 20% of the amount received by Newco in such
transaction solely for such Product Line Sale. 
Any such amount paid to Credence in connection with a Product Line Sale
shall be credited against the amount of the Purchase Price (including any
Earn-out Consideration) that would otherwise become payable to Credence. In no
event shall Newco pay to Credence more than $10 million in the aggregate
pursuant to this Agreement except to the extent Newco becomes obligated for a
payment to Credence pursuant to clause (iii) of Section 2.6(a).  A “Product Line Sale” means the sale,
conveyance, or other disposition or series of dispositions of all or
substantially all of any of the Probing, Electrical FA, Circuit Edit, or the
NEXS eda and cad link software suite product lines, whether by spin-off, asset
sale, exclusive irrevocable license of all the Acquired IP related to such
product line or otherwise.

 

(h)                                 In
the event of a Product Line Sale occurring prior to the completion of the
Earn-out Period, for purposes of calculating Revenues for determination of the
Earn-out Consideration, Revenues derived from Acquired Products sold in the
Product Line Sale shall be included in the Revenue calculation, and shall be
determined as follows: (i) Revenues 

 

16

 

derived from such Acquired Products over the prior
eight fiscal quarters (including, if applicable, quarters occurring prior to
the Closing) divided by (ii) 2, multiplied by (iii) 3.

 

(i)                                     Notwithstanding
any other provision in this Agreement, Newco, Credence, or any other Person
that has any withholding obligation with respect to any payment made pursuant
to this Agreement shall be entitled to deduct and withhold from any
consideration payable or otherwise deliverable pursuant to this Agreement such
amounts as may be required to be deducted or withheld therefrom under any
provision of federal, local or foreign tax law or under any applicable legal
requirements.  To the extent such amounts
are so deducted or withheld, such amounts shall be treated for all purposes
under this Agreement as having been paid to the Person to whom such amounts
would otherwise have been paid.

 

Section 2.7                                      Closing.  The closing of the purchase and sale of the
Purchased Assets and the assumption of the Assumed Liabilities hereunder (the “Closing”)
shall take place at a time and on a date (the “Closing Date”) to be
specified by the parties, which shall be no later than two (2) Business
Days after satisfaction or waiver of the latest to occur of the conditions set
forth in Article 6 hereof at the corporate offices of Credence, 1421
California Circle, Milpitas, CA 95035, unless another time, date or place is
agreed to in writing by the parties hereto. 
At the Closing:

 

(a)                                  Credence
shall deliver to Newco the Copyright Assignments, the Trademark Assignments,
the Patent Assignments and such other endorsements, consents, assignments,
instruments of conveyance and transfer documents (including the Bill of Sale
and the Assignment and Assumption Agreement) as Newco may reasonably request to
vest in Newco all right, title and interest in, to and under the Purchased
Assets.  Simultaneously with the
consummation of the transactions contemplated hereby, Credence, through its
officers, agents and employees, will put Newco into full possession and
enjoyment of all Purchased Assets located at Credence’s facilities.  At the Closing, Credence shall commence
delivery to Newco of those Purchased Assets identified by Newco to be delivered
by remote telecommunications or such other method as Newco in its sole
discretion directs.  Credence shall use
its best efforts to comply with the delivery protocol established by Newco
prior to Closing with respect to such Purchased Assets;

 

(b)                                 Credence
and Newco shall execute and deliver each of the other Transaction Documents and
any additional documents and agreements required by Article 6 hereof; and

 

(c)                                  Credence
shall pay the cash portion of the Purchased Assets to Newco.

 

Section 2.8                                      Insurance
Proceeds.  If prior to the Closing
any of the Purchased Assets are destroyed or damaged or taken in condemnation,
the insurance proceeds or condemnation award with respect thereto shall be a
Purchased Asset.  At the Closing,
Credence shall pay or credit to Newco any such insurance proceeds or
condemnation awards received by it or any of its Subsidiaries on or prior to
the Closing and shall assign to or assert for the benefit of Newco all of its
rights against any insurance companies, Governmental Entity and others with
respect to such damage, destruction or condemnation.  As and to the extent that there is available 

 

17

 

insurance under policies maintained by Credence and
its Affiliates, predecessors and successors in respect of any Assumed Liability
except for any such insurance proceeds with respect to which the insured is
directly or indirectly self-insured or has agreed to indemnify the insurer,
Credence shall cause such insurance to be applied toward the payment of such
Assumed Liability.  The provisions of
this Section 2.8 shall not affect the right of Newco not to consummate the
purchase of the Purchased Assets contemplated by this Agreement if any
condition to Newco’s obligation to purchase the Purchased Assets set forth
herein has not been satisfied.

 

Section 2.9                                      Customer
Billing and Payments; Customer Orders. 
In the event that Credence receives payments after the Closing on
invoices issued by Newco relating to Products sold after the Closing, Credence
shall promptly notify Newco thereof and remit such amounts to Newco.  In the event that Newco receives payments
after the Closing of any accounts receivable of Credence arising prior to the
Closing, Newco shall promptly notify Credence thereof and remit such amounts to
Credence.  In the event that Credence or
any of its Subsidiaries (other than a Hypervision Company) shall receive a
purchase order regarding any Products after the Closing, Credence shall inform
the third party issuing such purchase order that the Business has been acquired
by Newco and shall use its reasonable efforts to refer the third party to
Newco.

 

Section 2.10                                Operation
of Newco Business.

 

(a)                                  Acknowledgement.  Credence and Newco acknowledge and agree that
(i) as of and after the Closing, Newco and its Affiliates shall have the
power and right to control all aspects of the Business and the business and
operations of Newco and its Affiliates, including without limitation, hiring,
firing and compensation of employees, the branding, pricing, discounting and
terms of sale of products and services (including the Products), decisions
regarding whether, how and to what extent to market, advertise or promote
products and services (including the Products), the decision whether to
discontinue any products or services (including the Products), the decision as
to whether to make upgrades or enhancements to products or services (including
the Products), the making or not making of capital expenditures, the settlement
or not settling of claims and the management of all litigation and disputes
with third parties, including suppliers, customers, competitors, employees,
consultants and agents; (ii) Newco and its Affiliates shall have the power
and the right to determine all aspects of Newco’s and its Affiliates’
existence, including whether Newco and each of its Affiliates shall continue as
a standalone entity, be sold to a third party or have its operations
discontinued at any time; (iii) Newco and its Affiliates intend to
exercise or refrain from exercising such power and right as they may deem
appropriate and in the best overall interests of Newco and its Affiliates,
taking into account their respective conditions and prospects from time to time
(rather than the interests of Credence hereunder); (iv) as of and after
the Closing, Newco’s and its Affiliates’ operation of the Business and the
business of Newco and its Affiliates may impact the timing of revenue
recognition in a manner which could decrease the revenues of Newco for any
period and that Newco and its Affiliates may refuse to enter into an
arrangement that would increase revenues of Newco for any period, provided
however, that during the Earn-out Period Newco and its Affiliates shall (A) at
all times operate its business consistently during such period, and (B) operate
its business with a good faith obligation to not make decisions based on
minimizing the calculation of Revenues, the amount of the Earn-out 

 

18

 

Consideration, or the amount of the Purchase Price; (v) Newco
and its Affiliates currently have, and may in the future develop or acquire,
products or services that compete, either directly or indirectly, with the
Products and may make decisions with respect to such Products that adversely
affect Newco’s revenues with respect thereto; (vi) any of the above
actions may materially reduce the Credence’s ability to receive the Earn-out
Consideration; (vii) that and its Affiliates shall also be free to pursue
their business operations without recourse to any other party, as each of Newco
and its Affiliates deems appropriate in its sole discretion based on a variety
of factors, including, without limitation, and by way of illustration only,
consideration of marketing, sales, development, modification, improvement,
reconfiguration and compliance costs, commercial feasibility, competitive
advantages and disadvantages and rights of third parties, as well as prices
customers will pay for such opportunities, profitability and the terms and
conditions on which such opportunities are to be provided; and (viii) Newco
shall operate the Business and its business in good faith and shall not make
operating decisions with the specific intention of reducing the Earn-out
Consideration.  The parties to this
Agreement agree that no provision contained in this Agreement shall prevent or
place liability on Newco or any of its Affiliates from, among other actions,
modifying, developing or integrating the Products or the products and services
of Newco and its Affiliates as circumstances dictate or from terminating any
business, products or services, and Newco and its Affiliates shall be able,
without limitation or liability, to perform such actions at their sole
discretion.

 

(b)                                 Use
of Funds.  The $4,000,000 in cash
paid to Newco by Credence in connection with the Closing shall be used
exclusively as working capital by Newco. 
During the first eighteen (18) months following the Closing, Newco shall
not, without first obtaining the prior written consent of Credence, declare or
pay any distribution or dividend, or repurchase, redeem, or otherwise acquire
for value any of Newco’s ownership interests (other than the repurchase of
unvested shares from service providers to Newco at no more than the original
issue price of such shares in connection with the termination of service to
Newco).  Any breach of this Section 2.10(b) shall
result in the payments due under Sections 2.6(a)(i) and 2.6(a)(ii) to
become immediately due and payable.

 

ARTICLE 3

 

REPRESENTATIONS AND WARRANTIES OF CREDENCE

 

Credence hereby represents and warrants to
Newco, subject to the exceptions set forth in the disclosure schedule delivered
on the date hereof (the “Credence Disclosure Schedule”) by Credence to
Newco (which exceptions shall specifically identify the Section, Subsection or
clause hereof, as applicable, to which such exception relates) that:

 

Section 3.1                                      Organization
and Qualification.  Credence is duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite power and authority to own, lease and operate
its properties and to carry on the Business and to own, license or lease the
Purchased Assets.  Credence is duly
qualified or licensed and in good standing to do business in each jurisdiction
in which the property owned, leased or operated by it or the nature of the
Business makes such qualification or licensing necessary, except where the
failure to be so qualified or licensed would not have a Material Adverse Effect
on Credence.  Section 3.1 of the
Credence Disclosure Schedule lists all currently 

 

19

 

existing Subsidiaries of Credence that have at any
time operated or conducted any part of the Business or owned, leased or
licensed any of the Purchased Assets (the “Business Subsidiaries”).

 

Section 3.2                                      Authorization;
Enforceability.  Credence has all
necessary corporate power and authority to execute and deliver this Agreement
and each other Transaction Document to which it is a party, to perform its
obligations under this Agreement and each such other Transaction Document, and
to consummate the transactions contemplated hereby and thereby.  The execution and delivery of this Agreement
and each other Transaction Document to which it is a party, and the
consummation of the transactions contemplated hereby and thereby, have been
duly and validly authorized by the Board of Directors of Credence, and no other
corporate actions, approvals or proceedings on the part of Credence or any of
its Subsidiaries are necessary to authorize this Agreement and each such other
Transaction Document, or to consummate the transactions contemplated hereby and
thereby.  This Agreement has been, and
when executed at Closing each other Transaction Document to which it is a party
will be, duly and validly executed and delivered by Credence and, assuming the
due authorization, execution and delivery hereof and, to the extent applicable,
thereof, by the other parties hereto or thereto, constitute the valid, legal
and binding agreements and obligations of Credence, enforceable against
Credence in accordance with their respective terms, subject to any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws now or
hereafter in effect relating to creditors’ rights generally or to general
principles of equity.

 

Section 3.3                                      Consents
and Approvals; No Violations.  No
filing with or notice to and no permit, authorization, consent or approval of
any government or any governmental, regulatory or administrative body, agency
or authority, whether federal, state, local or foreign, or any agency,
instrumentality or authority thereof, or any court, tribunal or arbitrator
(public or private) (a “Governmental Entity”) or other person is
necessary for the execution and delivery by Credence of this Agreement or any
of the other Transaction Documents to which it is a party, the transfer of the
Purchased Assets and the Assumed Liabilities to Newco, the assumption of the
Assumed Contracts by Newco or the consummation of the other transactions
contemplated by this Agreement or the other Transaction Documents.  Any items set forth in Section 3.3
of the Credence Disclosure Schedule as exceptions to the foregoing sentence are
referred to collectively as the “Required Credence Approvals.”  Neither the execution, delivery and
performance of this Agreement or any of the other Transaction Documents to
which it is a party by Credence nor the consummation by Credence of the
transactions contemplated hereby or thereby will (a) result in a violation
or breach of or constitute (with or without due notice or lapse of time or
both) a default (or give rise to any right of termination, amendment,
cancellation or acceleration or Lien) or require the consent of the other
party(ies) thereto under any of the terms, conditions or provisions of any
Assumed Contract or Credence Permit relating to the Business or by which
Credence or any of the Purchased Assets may be bound, or (b) violate any
order, writ, injunction, decree, law, statute, rule or regulation
applicable to Credence, any of its properties or assets.

 

Section 3.4                                      No
Default.  Neither Credence nor any of
its Subsidiaries is in breach, default or violation (and no event has occurred
that with notice or the lapse of time or both would constitute a breach,
default or violation) of any term, condition or provision of (i) any
Assumed Contract or (ii) any order, writ, injunction, decree, law, statute,
rule or regulation applicable to Credence or any of its Subsidiaries or
any Purchased Asset or the Business.

 

20

 

Section 3.5                                      No
Undisclosed Liabilities; Absence of Changes.

 

(a)                                  Except
as expressly set forth in this Agreement or the other Transaction Documents,
since November 1, 2007, Credence and its Subsidiaries have conducted the
Business only in, and have not engaged in any transaction other than according
to, the ordinary and usual course of the Business consistent with past
practices, and there has not been any:

 

(i)                                     event
or change with respect to Credence, the Business or any of the Purchased Assets
that, individually or in the aggregate, has had or would reasonably be expected
to have a Material Adverse Effect on Credence;

 

(ii)                                  damage,
destruction or other casualty loss with respect to any Purchased Asset or the
Business, whether or not covered by insurance;

 

(iii)                               incurrence,
assumption or guarantee by Credence of any indebtedness for borrowed money;

 

(iv)                              creation
or assumption by Credence of any Lien on any Purchased Asset;

 

(v)                                 loan,
advance or capital contribution to, or investment in, any person that competes
with the Business made by Credence;

 

(vi)                              labor
dispute or any activity or proceeding by a labor union or representative
thereof to organize any employees of Credence or any of its Subsidiaries,
including those engaged in the Business, or any lockouts, strikes, slowdowns,
work stoppages or threats thereof by or with respect to such employees;

 

(vii)                           transaction
or commitment made, or any contract or agreement entered into, by Credence
relating to the Purchased Assets, the Assumed Liabilities or the Business
(including the acquisition (by sale, license or otherwise) or disposition (by
sale, license or otherwise) of any Purchased Asset) other than sales of
Inventory in the ordinary course of the Business consistent with past practice,
or any relinquishment by Credence or any of its Subsidiaries of any Contract or
other right relating to the Purchased Assets, the Assumed Liabilities or the
Business;

 

(viii)                        revaluation
of any of the Purchased Assets; or

 

(ix)                                capital
expenditure commitments relating to the Purchased Assets or the Business in
excess of Ten Thousand Dollars ($10,000) in the aggregate.

 

Section 3.6                                      Litigation.  There is no suit, claim, action, arbitration,
proceeding, investigation or review pending or, to the knowledge of Credence,
threatened against Credence or any of its Subsidiaries or relating to any of
the Purchased Assets, the Assumed Liabilities or the Business or Credence’s
consummation of the transactions contemplated by this Agreement, before any
Governmental Entity or brought by any person or brought by Credence or any 

 

21

 

Hypervision Company against any person, nor is there
any basis for any of the foregoing against Credence or any Hypervision Company.

 

Section 3.7                                      Compliance
with Applicable Law.  Credence holds
all permits, licenses, variances, exemptions, orders and approvals of all
Governmental Entities necessary for the ownership of the Purchased Assets and
the lawful conduct of the Business (the “Credence Permits”), a list of
which is set forth in Section 3.7 of the Credence Disclosure
Schedule.  All Credence Permits are valid
and in full force and effect and will remain in full force and effect upon
consummation of the transactions contemplated by this Agreement, except for
those Credence Permits identified in Section 3.7 of the Credence
Disclosure Schedule as not transferable to Newco.  Credence has complied and is in compliance
with the terms of the Credence Permits in all material respects.  The Business has been and is being conducted
in material compliance with all Applicable Laws, including all export control
requirements and the Foreign Corrupt Practices Act.  Credence has not received any notice of, and
to the knowledge of Credence, there is no intention on the part of, any
Governmental Entity to cancel, revoke or modify, or any inquiries, proceedings
or investigations, the purpose or possible outcome of which is the
cancellation, revocation or modification of, any Credence Permit.

 

Section 3.8                                      Employment
Matters.

 

(a)                                  Section 3.8(a) of
the Credence Disclosure Schedule contains a true and complete list of (1) each
“employee benefit plan” (within the meaning of Section 3(3) of
ERISA), (2) any other written, unwritten, formal or informal plan or
agreement involving direct or indirect compensation other than workers’
compensation, unemployment compensation and other government programs, under
which Credence has or is reasonably expected to have any present or future
Liability (directly or indirectly) with respect to the Business or under which
any Hypervision Company has or is reasonably expected to have any present or future
Liability (directly or indirectly), or (3) any employment, severance or
other similar contract, arrangement or policy (written or oral) entered into,
maintained or contributed to by Credence or any if its Subsidiaries, under
which any employee or contractor employed by or providing services to Credence
or any of its Subsidiaries in connection with the Business or any director of
Hypervision or Hypervision Taiwan has any present or future right to
benefits.  All such plans, agreements,
programs, policies and arrangements shall be collectively referred to as the “Benefit
Plans.”

 

(b)                                 Credence
has delivered the following documents to the Buyer with respect to each
applicable Benefit Plan:  (1) correct
and complete copies of all documents embodying such Benefit Plan, including
(without limitation) all amendments not set forth in the plan document, (2) a
written description of any Benefit Plan that is not set forth in a written
document, (3) the most recent summary plan description together with the
summary or summaries of material modifications thereto, if any, (4) the
most current Internal Revenue Service (“IRS”) determination or opinion letters,
and (5) the three most recent annual reports (Form Series 5500
and all schedules and financial statements attached thereto), if any.

 

(c)                                  Neither
Credence nor any of its Subsidiaries maintains, participates in or contributes
to, nor has ever maintained, participated in or contributed to, any “multiemployer
plan” as defined in Section 3(37) of ERISA, a plan described in Section 413
of 

 

22

 

the Code or any plan subject to Title IV of ERISA or Section 302
of ERISA.  Neither Credence nor any of
its Subsidiaries has any outstanding or contingent obligations or liabilities with
respect to a multiemployer plan, a plan described in Section 413 of the
Code or any plan subject to Title IV of ERISA or Section 302 of ERISA.

 

(d)                                 Neither
Credence nor any of its Subsidiaries (other than the Hypervision Companies) is
subject to any material liability or penalty under Sections 4975 through 4980B
of the Code or Title I of ERISA.  Neither
Credence nor any of its Subsidiaries (other than Hypervision, Inc. and its
Subsidiary) has incurred any material liability in connection with any COBRA
non-compliance or in connection with any non-exempt PT (within the meaning of
the Code and ERISA) with respect to the applicable Benefit Plans.  Neither of the Hypervision Companies is
subject to any liability or penalty under Sections 4975 through 4980B of the
Code or Title I of ERISA.  Neither of the
Hypervision Companies has incurred any liability in connection with any COBRA
non-compliance or in connection with any non-exempt PT (within the meaning of
the Code and ERISA) with respect to the applicable Benefit Plans.

 

(e)                                  There
is no contract, plan or arrangement covering any employee or former employee of
Credence or any of its Subsidiaries principally relating to the Business or any
employee or former employee of either Hypervision Company that, individually or
collectively, could give rise to the payment as a result of the transactions
contemplated by this Agreement of any amount that would not be deductible by
Credence or such Subsidiary, or by Newco, by reason of Section 280G of the
Code.  For purposes of the foregoing
sentence, the term “payment” shall include (without limitation) any payment,
acceleration, forgiveness of indebtedness, vesting, distribution, increase in
benefits or obligation to fund benefits.

 

(f)                                    No
action, suit or claim (excluding claims for benefits incurred in the ordinary
course) has been brought or is pending or to the knowledge of Credence,
threatened against or with respect to any Benefit Plan or the assets or any
fiduciary thereof (in that Person’s capacity as a fiduciary of such Benefit
Plan).  There are no audits, inquiries or
proceedings pending or, to the knowledge of Credence, threatened by the IRS,
DOL, or other governmental entity with respect to any Benefit Plan.

 

(g)                                 Section 3.8(g) of
the Credence Disclosure Schedule contains a list of the name of each employee
and consultant providing services to the Business and, for each such employee
or consultant, identifies the following information:  (i) job title or function; (ii) job
location; (iii) date of hire; (iv) amount of current base salary; (v) any
incentive, bonus, or commissions arrangement; (vi) total compensation
received in 2006 and 2007; (vii) any other special compensation or
perquisites (e.g. automobile allowance); (viii) status as exempt or
non-exempt from applicable overtime Laws; (ix) vacation and paid time off
accrual rate (per month or per year); (x) amount of accrued but unused
vacation and paid time off; (xi) amount of any severance pay or benefits due
pursuant to any oral or written employment agreement following a termination
without cause or a resignation for good reason; and (xii) whether such person
is on a leave of absence and, if so, the type of leave of absence and the
expected date of return from such leave of absence.  As of the date hereof, no such person has
terminated or has advised Credence or any of its Subsidiaries of his or her
intention to terminate such person’s relationship or status as an employee or
consultant of Credence or any of its Subsidiaries for any reason, including
because of the consummation of the transactions contemplated by this Agreement
and 

 

23

 

Credence has no plans or intentions as of the date
hereof to terminate any such employee or consultant, except with respect to employees
who are not Designated Employees.

 

(h)                                 Neither
Credence nor either Hypervision Company is a party to any collective bargaining
agreement with respect to the Designated Employees, there are no labor unions
or other organizations representing any Designated Employee, and to the
knowledge of Credence, no labor union or other organization has filed a
petition with the National Labor Relations Board or any other Governmental
Entity within the three years prior to the date of this Agreement seeking certification
as the collective bargaining representative of any Designated Employee.  To the knowledge of Credence, no labor union
or organization is engaged in or threatening to engage in any organizing
activity with respect to any Designated Employee.  During the three years prior to the date of
this Agreement, there has not been, and there is not pending or, to the
knowledge of Credence, threatened, any (i) strike, lockout, slowdown,
picketing, or work stoppage with respect to any current or former employee
of the Business, or (ii) unfair labor practice charge, grievance or
complaint filed or pending against Credence by any Designated Employee.

 

(i)                                     Credence
and each of its Subsidiaries is in compliance with all Applicable Laws
respecting employment, employment practices, discrimination, harassment,
retaliation, disability rights and benefits, immigration, terms and conditions
of employment, classification of employees as exempt from Applicable Laws
regarding overtime compensation and minimum wages, classification of
independent contractors, occupational safety and health, privacy, and wages and
hours, in each case, with respect to its employees or consultants who perform
services for the Business.  Credence has
completed and maintains in its files Form I-9s with respect to each of the
Designated Employees.  Since January 1,
2005, Credence has not received any notice from any Governmental Entity that
any Designated Employee has a name or social security number that does not
match the name or social security number maintained by any Governmental Entity.

 

(j)                                     Credence
and each of its Subsidiaries has withheld and reported to the applicable
Governmental Entities all amounts required by Applicable Law or by agreement to
be withheld and reported with respect to wages, salaries and other payments to
employees.

 

(k)                                  There
are no claims pending, or to the knowledge of Credence, threatened before any
Governmental Entity against Credence or either Hypervision Company, by any
Designated Employee asserting any violation of breach of contract or violation
of Title VII of the Civil Rights Act of 1964, the Age Discrimination in
Employment Act of 1967, the Equal Pay Act, the Americans with Disabilities Act,
the Family and Medical Leave Act, the Fair Labor Standards Act, or any other
Applicable Law regarding labor or employment.

 

(l)                                     There
are no pending or, to the knowledge of Credence, threatened claims or actions
against Credence or either Hypervision Company under any worker’s compensation
policy or long-term disability policy (or comparable policies in the case of
foreign Subsidiaries).

 

(m)                               Credence
is not a party to any contract, agreement or arrangement with any Designated
Employee that (i) restricts the right of Credence or either Hypervision 

 

24

 

Company from terminating such employee’s employment
without cause or without a specified notice period, (ii) obligates
Credence or either Hypervision Company to pay severance to any such employee
upon termination of such employee’s employment with Credence or either
Hypervision Company, or (iii) obligates Credence or either Hypervision
Company to provide any payment or benefits upon a change in control of Credence
or either Hypervision Company.  To the
knowledge of Credence, none of the Designated Employees is a party to an
agreement that restricts such employee’s ability to engage in the Business.

 

Section 3.9                                      Taxes.

 

(a)                                  Credence
and each of its Subsidiaries has filed all Tax Returns for or related to the
Purchased Assets required to have been filed by them prior to the Closing Date
and have paid all Taxes shown as payable on such Tax Returns.  Each Hypervision Company has filed all Tax
Returns required to have been filed by them prior to the Closing Date and have
paid all Taxes shown as payable on such Tax Returns;

 

(b)                                 there
are no pending, current or threatened claims, actions, suits, proceedings or
investigations for the assessment or collection of Taxes with respect to either
Hypervision Company or the Purchased Assets;

 

(c)                                  there
are no liens for Taxes against the assets of either Hypervision Company assets
or the Purchased Assets, other than Taxes not yet due or payable;

 

(d)                                 Neither
Hypervision Company has waived any statute of limitations in respect of Taxes
or entered into any agreement extending the period for assessment or collection
of any Taxes nor is it a party to any Tax allocation, indemnity or sharing
agreement;

 

(e)                                  all
Tax Returns of the Hypervision Companies for Tax periods ending on or after December 31,
2003 have been made available to Newco;

 

(f)                                    Neither
Hypervision Company is or was a United States real property holding corporation
within the meaning of §897(c)(2) of the Code during the period specified
in §897(c)(1)(A)(ii) of the Code;

 

(g)                                 each
of Credence and its Subsidiaries has complied in all respects with all
applicable legal requirements relating to the payment and withholding of Taxes
from employees and other persons;

 

(h)                                 none
of Credence or any of its Subsidiaries has been the “distributing corporation”
or the “controlled corporation” (in each case, within the meaning of Section 355(a)(1) of
the Code) with respect to a transaction described in Section 355 of the
Code (i) within the three (3)-year period ending as of the date of this
Agreement, or (ii) in a distribution that could otherwise constitute part
of a “plan” or “series of related transactions” (within the meaning of Section 355(e) of
the Code) that includes the transactions contemplated by this Agreement;

 

(i)                                     neither
Credence nor any of its Subsidiaries has any actual or potential liability
under Treasury Regulations Section 1.1502-6 (or any comparable or similar 

 

25

 

provision of federal, state, local or foreign law), as
a transferee or successor, pursuant to any contractual obligation, or otherwise
for any Taxes of any person other than Credence and its Subsidiaries.  Neither Credence nor any of its Subsidiaries
has ever been a member of a group of corporations (other than the consolidated
group of which Credence was the common parent corporation) with which it has
filed (or been required to file) group, consolidated, combined or unitary
Returns;

 

(j)                                     no
written claim has been made by a Tax authority in a jurisdiction where either
Hypervision Company does not file Tax Returns that such Hypervision Company is
or may be subject to taxation by that jurisdiction;

 

(k)                                  Neither
Hypervision Company will be required to include in income any adjustment
pursuant to Section 481 of the Code by reason of a voluntary change in
accounting method initiated by it and the Internal Revenue Service has not
proposed an adjustment or change in accounting method.  Neither Hypervision nor any of its
Subsidiaries will be required to include any item of income in, or exclude any item
of deduction from, taxable income for any period (or any portion thereof)
ending after the Closing Date as a result of any: (i) installment sale or
other open transaction disposition made on or prior to the Closing Date; or (ii) prepaid
amount received on or prior to the Closing Date.

 

Section 3.10                                Intellectual
Property.

 

(a)                                  Generally.  Section 3.10(a) of the
Credence Disclosure Schedule sets forth, for each of the following items of
Intellectual Property (collectively, the “Scheduled Credence IP”) all (i) Patents
(as defined below) included in the Assigned IP, identifying for each (A) the
patent number and issue date (if issued) or application number and filing date
(if not issued), (B) its title, (C) the named inventors and (D) the
owner of record and whether it is owned exclusively by Credence (such Patents
that are so owned, in whole or in part, by Credence being referred to as the “Credence
Patents”); (ii) registered Trademarks (as defined below), pending
applications for registration of Trademarks and material unregistered
Trademarks included in the Assigned IP, identifying for each (A) its
registration (as applicable) and application numbers, (B) the owner of
record and whether it is owned exclusively by Credence, (C) its current
status and (D) if registered or if an application for registration has
been filed, the class(es) of goods or services to which it relates (such
Trademarks that are so owned, in whole or in part, by Credence being referred
to as the “Credence Trademarks”); and (iii) registered Copyrights
(as defined below) included in the Assigned IP, indicating for each (A) the
applicable jurisdiction, (B) registration number (or application number), (C) the
date issued (or filed) and (D) the owner of record and whether it is owned
exclusively by Credence (such Copyrights that are so owned, in whole or in
part, by Credence being referred to as the “Credence Registered Copyrights”)
and (iv) internet domain names included in the Assigned IP.  For purposes of this Agreement, “Intellectual
Property” means all rights arising from or associated with the following,
whether protected, created or arising under the laws of the United States or
any other jurisdiction:  (A) trademarks
and service marks (whether registered or unregistered), trade names, internet
domain names, logos, designs and general intangibles of like nature and all
goodwill associated therewith (collectively, “Trademarks”); (B) patents
and patent applications, including any continuation, continuation-in-part,
divisional, reissue, renewal, provisional patent applications, and any patents
issuing therefrom, and rights in respect of utility models and 

 

26

 

industrial designs (collectively, “Patents”); (C) works
of authorship and all copyrights therein, mask work rights and rights in
databases and data collections (including any registrations and applications
therefor and whether registered or unregistered) (collectively, “Copyrights”);
(D) trade secrets and other confidential information, know-how, technical
data, technology, research and development information, product roadmaps, board
layouts, bills of materials, proprietary processes, formulae, algorithms,
models, user interfaces, customer lists, inventions, discoveries, concepts,
ideas, techniques, methods, source codes, object codes, methodologies and, with
respect to all of the foregoing, related confidential data, information or
documentation, in each case to the extent that any of the foregoing derives
independent economic value, actual or potential, from not being generally known
to the public or to other persons who can obtain economic value from its
disclosure or use, excluding any Copyrights or Patents that may cover or
protect any of the foregoing (all of the foregoing in clause (D) collectively,
“Trade Secrets”.  For purposes of
this Section 3.10, “Assigned IP” shall include any Intellectual Property
owned by either Hypervision Company.

 

(b)                                 Patents.

 

(i)                                     All
Credence Patents are in compliance with all legal requirements (including
payment of filing, examination, and maintenance fees) other than any
requirement that, if not satisfied, would not result in a revocation or lapse
or otherwise affect the enforceability of the Credence Patent in question, and
Credence has not taken any action or failed to take any action (including an
intentional failure to disclose material prior art pertaining to any Credence
Patent of which Credence has become aware), or used or enforced (or failed to
use or enforce) any Credence Patent in a manner that would result in the
abandonment or unenforceability of such Credence Patent.

 

(ii)                                  No
Credence Patent or, to the knowledge of Credence, any Patent that is
exclusively licensed to Credence in connection with the Business (an “Exclusively
Licensed Patent”) has been or is now involved in any litigation,
administrative proceeding, interference, reissue, reexamination or opposing
proceeding in the United States Patent and Trademark Office or with any
non-U.S. Governmental Entity which serves as the patent authority of such
non-U.S. jurisdiction.  To Credence’s
knowledge, no such action has been threatened. 
To the knowledge of Credence, there is no patent of another person that
may be used to provoke in the U.S. Patent and Trademark Office an interference
with any Credence Patent or Exclusively Licensed Patent.

 

(iii)                               Credence
has taken reasonable steps to protect its rights in the Credence Patents and
patentable inventions in accordance with standard industry practice.  Credence has not received any notice or claim
challenging or questioning the validity or enforceability of any Credence
Patents or Exclusively Licensed Patent or indicating an intention on the part
of any person to bring a claim that any of the Credence Patents or Exclusively
Licensed Patents are invalid or unenforceable or have been misused, and there
is no relevant prior art pertaining to any Credence Patents of which Credence
has become aware that was intentionally withheld during the prosecution of the
patent application(s) therefor (or which has been highlighted by any
European patent office), but which if such prior art had been disclosed may
affect or may have affected the prosecution thereof or the scope of the patent
claims ultimately that may be granted or that are granted in respect thereof.

 

27

 

(iv)                              There
is no agreement, decree, arbitral award or other provision which obligates
Credence to grant licenses or ownership interests in future patents, inventions
or developments.

 

(v)                                 To
Credence’s knowledge, the inventions disclosed in any of the Credence Patents,
the Exclusively Licensed Patents and any Products may be practiced without
infringing any patents owned or controlled by any other person.

 

(vi)                              Credence
has not granted to any person any right, license or permission to practice any
of the inventions claimed in any of the Credence Patents or Exclusively
Licensed Patents other than pursuant to any license agreement disclosed in Section 3.10(f)(ii) of
the Credence Disclosure Schedule.

 

(vii)                           Credence
has not terminated, or received any notice of default or termination or threat
of termination for or with respect to, any agreement under which any patents
owned or controlled by another person are licensed to Credence in connection
with the Business and Credence has not taken any action that could cause the
termination of or the default under any such agreement.

 

(c)                                  Copyrights.

 

(i)                                     Credence
has not received any notice or claim (whether written or oral) challenging or
questioning the validity or enforceability of any of the Credence Registered
Copyrights and any other Copyrights used by Credence in connection with the
Business other than those as to which the rights being exercised by Credence
have been licensed from another person (collectively, “Credence Owned
Copyrights”) or indicating an intention on the part of any person to bring
a claim that any Credence Owned Copyright is invalid, is unenforceable or has
been misused and no Credence Owned Copyright otherwise has been challenged or
threatened in any way.

 

(ii)                                  Credence
has not taken any action or failed to take any action (including a failure to
disclose required information to the United States Copyright Office or to any
non-U.S. Governmental Entity that serves as the Copyright authority of such
non-U.S. jurisdiction in connection with any registration of a registered
copyright therewith), or used or enforced (or failed to use or enforce) any of
the Credence Owned Copyrights, in each case in a manner that would result in
the unenforceability of any of the Credence Owned Copyrights.

 

(iii)                               Credence
has taken all reasonable steps to protect Credence’s rights in and to the
Credence Owned Copyrights.

 

(iv)                              Credence
has not granted to any person any right, license or permission to exercise any
rights under any of the Credence Owned Copyrights other than (A) non-exclusive
licenses of Products granted in the ordinary course of business to customers or
(B) pursuant to any license agreement set forth in Section 3.10(f)(ii) of
the Credence Disclosure Schedule.

 

(d)                                 Trade
Secrets.  Credence enforces a policy
of requiring each employee, consultant and contractor to execute industry
standard proprietary information, 

 

28

 

confidentiality and assignment agreements in
substantially the forms made available to Newco for review, and each former and
current employee, consultant, and contractor of Credence and its Subsidiaries
has executed such an agreement without taking any material exceptions to
assignment to Credence of any Intellectual Property.  Except under reasonably protective, written
confidentiality obligations, there has been no disclosure by Credence of
material confidential information or any Credence Trade Secrets.

 

(e)                                  Ownership.  Credence owns exclusively all right, title
and interest in and to all of the Assigned IP, free and clear of any and all
Liens, covenants, conditions and restrictions or other adverse claims or
interests of any kind or nature (but subject to licenses granted by Credence to
another person in the ordinary course of business), and Credence has not
received any notice or claim challenging Credence’s ownership of any such
Assigned IP or suggesting that any other person has any claim of legal or
beneficial ownership with respect thereto, nor to the knowledge of Credence is
there a reasonable basis for any claim that Credence does not so exclusively
own any of such Intellectual Property. 
Credence has not (i) transferred ownership of, or granted any
exclusive license of or exclusive right to use, or authorized the retention of
any exclusive rights to use any Intellectual Property that is or was Assigned
IP, to any other person or (ii) permitted Credence’s rights in such
Assigned IP to enter into the public domain. 
No government funding, facilities or resources (including personnel) of a
university or other educational institution or research center or funding from
third parties was used in the development of any Assigned IP or Products, and
no Governmental Entity, university or other educational institution or research
center has any claim or right in or to the Assigned IP or Products.

 

(f)                                    License
Agreements.  Section 3.10(f)(i) of
the Credence Disclosure Schedule sets forth a complete and accurate list of all
license agreements granting to Credence any right to use or practice any rights
under any Intellectual Property in connection with the Business other than
non-exclusive end user licenses of Software that are generally commercially
available on reasonable terms to any person for a one-time license fee of no
more than Ten Thousand Dollars ($10,000) and are not otherwise material to the
Business (collectively, the “Inbound License Agreements”), indicating
for each the title and the parties thereto and the amount of any future royalty
or license fee payable thereunder.  Section 3.10(f)(ii) of
the Credence Disclosure Schedule sets forth a complete and accurate list of all
license agreements under which Credence licenses software or grants other
rights to use or practice any rights under any Assigned IP or Products,
excluding non-exclusive licenses with end user customers that in the
twelve-month period prior to the date hereof have purchased or licensed
Products in the ordinary course of the Business for which the total amounts
paid or payable to Credence did not or do not exceed Twenty Thousand Dollars
($20,000) and otherwise are not material to the Business (collectively, the “Outbound
License Agreements”), indicating for each the title and the parties thereto
and whether any exclusive rights are granted thereunder by Credence.  The rights licensed under each Inbound
License Agreement that is an Assumed Contract shall, subject to the
satisfaction of the assignment consent obligations listed in Section 3.3
of the Credence Disclosure Schedule, be exercisable by Newco on and immediately
after the Closing to the same extent as by Credence immediately prior to the
Closing.  To Credence’s knowledge, no
loss or expiration of any Intellectual Property licensed to Credence under any
Inbound License Agreement that is an Assumed Contract is pending or reasonably
foreseeable or threatened.  No licensor
under any Inbound License Agreement has any ownership or exclusive license
rights in 

 

29

 

or with respect to any improvements made by Credence
to the Intellectual Property licensed thereunder.  There is no outstanding or, to Credence’s
knowledge, threatened dispute or disagreement with respect to any Inbound
License Agreement or any Outbound License Agreement or the Intellectual
Property licensed thereunder.  Credence
has not made any submission or suggestion to and is not subject to any
agreement with a standards body or multi-party standards agreement that would
obligate Credence to grant licenses to or otherwise impair its control of its
Intellectual Property.

 

(g)                                 No
Infringement by Credence.  The
development, manufacture, importation, sale and support of the Products, the
provision of any services provided by Credence in connection with the Business,
the technology or materials manufactured, used, sold, offered for sale,
imported, distributed or other commercial exploitation of any technology or
materials by Credence in connection with the Business and the conduct of the
Business as currently conducted and as contemplated and the use of the
Intellectual Property by Credence do not infringe upon, misappropriate,
violate, dilute or constitute the unauthorized use of any rights owned or
controlled by any other person, including any Intellectual Property of any
other person.

 

(h)                                 No
Pending or Threatened Infringement Claims. 
No litigation is now or, within the three (3) years prior to the
date of this Agreement, was pending, and no notice or claim has been received
by Credence, alleging that Credence has engaged in any activity or conduct
(including contemplated activity or conduct) in connection with the Business
that infringes upon, violates, dilutes or constitutes the unauthorized use of
the Intellectual Property rights of any person, including any contamination
claims or misappropriation of trade secrets claims, nor is there a reasonable
basis for any such claim.  For the
purposes of this paragraph, the term “contamination” means any use of
third-party materials or Intellectual Property without an express license to do
so from the owner or licensor of such third-party materials.  To the knowledge of Credence, no person is
infringing, misappropriating or otherwise violating any Assigned IP.

 

(i)                                     Software.  All Software used by Credence in connection
with the Business that was not licensed from another person pursuant to a
written license agreement or commercially acquired in a transaction in which
the vendor provided a clickwrap or shrinkwrap license agreement and/or per copy
authorization under applicable copyright law (collectively, the “Credence
Software”) was either (i) developed within the scope of their
employment by employees of Credence who have assigned (and have provided
waivers of any applicable moral rights) to Credence all rights thereto; (ii) developed
by independent contractors who have exclusively assigned all of their rights
(and have provided waivers of any applicable moral rights) to Credence pursuant
to written agreements; or (iii) otherwise acquired by Credence from
another person pursuant to a written agreement in which such person has expressly
and exclusively assigned all of its rights thereto to Credence.  The Credence Software does not contain any
programming code, documentation or other materials or development environments
that embody Intellectual Property rights of any person other than Credence,
except for headers and dynamically linked libraries or development environments
obtained by Credence or from other persons who make such headers, libraries or
development environments available under a license permitting Credence to carry
on the current and, to Credence’s knowledge, contemplated Business.  For purposes of this Agreement, “Software”
means any and all (i) computer programs, including any and all software
implementations of algorithms, heuristics models and 

 

30

 

methodologies, whether in source code or object code, (ii) testing,
validation, verification and quality assurance materials, (iii) databases,
conversion, interpreters and compilations, including any and all data and
collections of data, whether machine readable or otherwise, (iv) descriptions,
schematics, flow-charts and other work product used to design, plan, organize
and develop any of the foregoing, (v) software development processes,
practices, methods and policies recorded in permanent form, relating to any of
the foregoing, (vi) performance metrics, sightings, bug and feature lists,
build, release and change control manifests recorded in permanent form,
relating to any of the foregoing, and (vii) all documentation, including
user manuals, web materials, and architectural and design specifications and
training materials, relating to any of the foregoing.  Credence has not used and does not currently
use in connection with the Business or any Product any “freeware” or software
obtained pursuant to any open source, community source, copyleft or similar
license arrangement.  The current conduct
of the Business does not, and the conduct of the Business as proposed will not,
result in any obligation to publish, disclose or otherwise make available any
Software source code for its (or any of its licensors’, as applicable)
proprietary Software or Products.

 

(j)                                     Performance
of Existing Products.  Credence’s
existing and currently manufactured, supported and marketed Products are listed
and described in Section 3.10(j) of the Credence Disclosure Schedule
and, to the knowledge of Credence, perform in accordance with the functions
described in any specifications or end user documentation, press releases, or
other information provided by or at the request of Credence to customers or
potential customers of Credence on which such customers or potential customers
relied or reasonably could be expected to rely upon when licensing or otherwise
acquiring such Products.  Credence is not
aware of any bugs or defects in existing and currently manufactured, supported
and marketed Products that could reasonably be expected to have a material
adverse effect on the Business as conducted and as proposed to be conducted.

 

(k)                                  Software
Supplier Relationships.  Section 3.10(k) of
the Credence Disclosure Schedule sets forth a complete and correct description
of each and every Contract related to third party Software that is or may be
incorporated into or used in the design, manufacturing or production of the Products
(“Software Supply Contracts”). 
There are no delinquent fees, penalties, price uplifts, shortfall
payments, bill backs or other amounts outstanding under such Software Supply
Contracts.  Credence has not received any
written or oral notice from the other party to any Software Supply Contract, or
from any other supplier to Credence, to the effect that such party will not
accept purchase orders from Credence on such terms, conditions and quantities
consistent with past practices.

 

Section 3.11                                Real
Property; Tangible Personal Property.

 

(a)                                  Section 3.11(a) of
the Credence Disclosure Schedule sets forth a list of the lease agreements
relating to all real property currently leased by Credence and used in the
Business, the name of the lessor and the date of the lease and each
modification, amendment or supplement thereto (the “Real Property Leases”).  All rent and other sums and charges payable
by Credence as tenant under the Real Property Leases are current.  Credence has delivered to Newco complete and correct
copies of such leases, including all modifications, amendments and supplements
thereto.

 

31

 

(b)                                 Section 3.11(b) of
the Credence Disclosure Schedule sets forth a true, correct and complete list
of all Equipment and all other tangible personal properties owned by Credence
that are used or useful for or in the Business (collectively, the “Owned
Tangible Personal Property”).  All
such Owned Tangible Personal Property are Purchased Assets.  Credence has good and marketable title to all
Owned Tangible Personal Property, free and clear of any Liens of any kind or
nature whatsoever.

 

(c)                                  Section 3.11(c) of
the Credence Disclosure Schedule hereto sets forth a true, correct and complete
list and summary description of the lease agreements relating to all Equipment
and all other tangible personal properties leased by Credence that are
Purchased Assets (the “Personal Property Leases”, and such tangible
personal properties, together with the Owned Tangible Personal Property, the “Tangible
Personal Property”), together with a brief description of the property
leased.  Credence has delivered to Newco
complete and correct copies of each Personal Property Lease, together with any
modifications, amendments and supplements thereto.  Each Personal Property Lease is in full force
and effect and all payments due to date pursuant to any such lease have been
paid.  Neither Credence nor, to the
knowledge of Credence, any other party is in default under any Personal
Property Lease, and no event has occurred which constitutes, or with the lapse
of time or the giving of notice or both would constitute, a default by Credence
or, to the knowledge of Credence, any other party under any such Personal
Property Lease.  There are no disputes or
disagreements between Credence and any other party with respect to any Personal
Property Lease.

 

Section 3.12                                Product
Warranties.  Section 3.12(a) of
the Credence Disclosure Schedule sets forth correct and complete copies of all
warranties and guaranties, and complete written descriptions of any oral
warranties or guaranties, given by Credence or any of its Subsidiaries
currently in effect with respect to its Products.  There have not been any deviations from or modification
to such warranties and guaranties, and none of Credence or any of its salesmen,
employees, distributors and agents is authorized to undertake obligations to
any customer or to other third parties in excess of such warranties or
guaranties.  Credence is not under notice
of or subject to, or, to the knowledge of Credence, is there any reasonable
basis for, any outstanding warranty claims related to Products that could
reasonably be expected to have a material adverse effect on the Business as
conducted and as proposed to be conducted.  Section 3.12(b) of the
Credence Disclosure Schedule lists all express warranties from third parties to
Credence that are Purchased Assets.

 

Section 3.13                                Material
Contracts.

 

(a)                                  Section 3.13(a) of
Credence Disclosure Schedule sets forth a list of all of the following
Contracts relating to the Business or any of the Purchased Assets to which
Credence or either Hypervision Company is a party or is otherwise bound (each a
“Material Contract” and collectively the “Material Contracts”): (i) each
Contract that requires payment by or to Credence in respect of any Purchased
Asset or the Business or by or to either Hypervision Company of more than Five
Thousand Dollars ($5,000); (ii) all Contracts in respect of any Purchased
Asset or the Business relating to, and evidences of, indebtedness for borrowed
money or the deferred purchase price of property (whether incurred, assumed,
guaranteed or secured by any asset); (iii) contracts that purport to
limit, curtail or restrict the ability of Credence or either Hypervision
Company to operate the Business or use or enforce the Assigned IP in any way; (iv) 

 

32

 

Contracts granting a right of first refusal or first
negotiation or “most favored” pricing or other terms or any Contract granting
any exclusive rights or licenses with respect to the Purchased Assets or the
Business; (v) licensing or distribution Contracts; (vi) partnership,
joint venture or other similar Contracts or arrangements, directly affecting
any Purchased Asset or the Business; (vii) all joint development or
professional services Contracts; (viii) any Contract that expires or may
be renewed at the option of any person other than Credence or any of its
Subsidiaries so as to expire more than one year after the date of this
Agreement; (ix) any Contract with any person with whom Credence or any of
its Subsidiaries does not deal at arm’s length and all Contracts with any
Affiliates of Credence; and (viii) all other Contracts that are material
to the Business or any Purchased Asset or to either Hypervision Company.

 

(b)                                 Credence
has delivered correct and complete copies of the Material Contracts to Newco,
including all modifications, amendments and supplements thereto.  Each of the Material Contracts constitutes
the valid and legally binding obligation of Credence, enforceable in accordance
with its terms, and is in full force and effect, except that such enforcement
may be subject to any bankruptcy, insolvency, reorganization, moratorium, or
other similar laws, now or hereafter in effect, relating to creditors’ rights
generally or to general principles of equity. 
There is no material default under any Material Contract either by
Credence or any of its Subsidiaries or, to Credence’s knowledge, by any other
party thereto, and no event has occurred that with the giving of notice, the
lapse of time, or both would constitute a material default thereunder by
Credence or any of its Subsidiaries or, to Credence’s knowledge, any other
party.

 

(c)                                  No
party to any Material Contract has given notice to Credence or any of its
Subsidiaries or made a claim against Credence or any of its Subsidiaries in
respect of any breach or default thereunder.

 

(d)                                 The
Assumed Contracts do not allow or provide for any rights of return or similar
rights to any third party.

 

Section 3.14                                Title
to and Sufficiency of the Purchased Assets.

 

(a)                                  Credence
has, and following the Closing Newco will have, good, valid and marketable
title to, or valid leasehold, license or sublicense interests in, all of the
Purchased Assets, free and clear of all Liens. 
Credence has all rights, power and authority to sell, convey, assign,
transfer and deliver the Purchased Assets to Newco in accordance with this
Agreement.  All of the assets used for or
in the Business by Credence or any of its Subsidiaries are owned, leased or
licensed by Credence or Hypervision.

 

(b)                                 The
Purchased Assets constitute all of the rights, properties and assets (including
Intellectual Property and Contracts) of every kind, character and description, wherever
located and whether tangible or intangible, real or personal, or fixed or
contingent, that are used for or in or necessary for the design, manufacture,
import, sale and support of the Products, in past and current versions that
have been shipped to customers (even in prototype) and in versions currently
contemplated by Credence and to carry on the Business as currently
conducted.  The Purchased Assets
constitute all of the rights, properties and assets (including Intellectual
Property and Contracts) of every kind, character and description, wherever
located 

 

33

 

and whether tangible or intangible, real or personal,
or fixed or contingent, that are used for or in or necessary for the operation
of the Business (other than the design, manufacture, import, sale and support
of the Products addressed in the foregoing sentence) as currently conducted or
as currently contemplated to be conducted by Credence, except with respect to
aspects of the Business currently contemplated but not sufficiently developed
to require licenses to any third party materials that may eventually be
necessary and for which Credence and its Subsidiaries have not actually
obtained licenses, provided that such licenses that to the knowledge of
Credence are likely to be so required are set forth in Section 3.14
of the Credence Disclosure Schedule.  All
of the Purchased Assets are in good operating condition and repair, subject to
ordinary wear and maintenance, are usable in the regular and ordinary course of
the Business and conform in all material respects to all Applicable Laws and
Credence Permits relating to their construction, use and operation.  There is no existing agreement with, option
or right of, or commitment to any person to acquire or dispose of any of the
Purchased Assets or any interest therein, other than Contracts entered into in
the ordinary course of the Business consistent with past practices for the sale
of Inventory.  Schedule 2.1(g) includes
all open purchase orders issued by customers or distributors as of the date
hereof (i.e. that have not been fulfilled and therefore become accounts
receivable of Credence) relating to Products or the Business.

 

Section 3.15                                Financial
Statements.  Credence has delivered
to Newco financial statements of the Business for the fiscal year ended November 3,
2007.  Such financial statements fairly
represent the financial condition, results of operations and cash flows of the
Business for the period, and all assumptions and judgments (including
allocation of overhead) made by Credence in preparation of such financial
statements are reasonable and were made in good faith and with the intention of
reflecting the Business as if it were a stand-alone business.

 

Section 3.16                                Certain
Interests.  No Affiliate, officer,
director or employee of Credence or officer, director or employee of any
Affiliate of Credence has any material interest in any of the Purchased Assets,
the Assumed Liabilities or the Business. 
Credence has not made any loan, advance or capital contribution to, or
investment in, any person that competes with the Business.

 

Section 3.17                                Customers
and Suppliers.  No customer which
individually accounted for more than five percent (5%) of the revenues of the
Business for Credence’s fiscal year ended October 31, 2007, and no
material supplier or distributor of Credence or any of its Subsidiaries
relating to the Business, has cancelled or otherwise terminated, or made any
written threat to Credence or any of its Subsidiaries to cancel or otherwise
terminate its relationship with Credence or any of its Subsidiaries, or has at
any time on or after January 1, 2007 decreased materially its services or
supplies to Credence and its Subsidiaries in the case of any such supplier or
distributor, or its usage of the services or products of Credence or any of its
Subsidiaries in the case of such customer, in each case relating to the
Business.  To Credence’s knowledge, no
such supplier, distributor or customer intends to cancel or otherwise terminate
its relationship with Credence or any of its Subsidiaries or to decrease
materially its services or supplies to Credence or any of its Subsidiaries or
its usage of the services or products of Credence or any of its Subsidiaries,
as the case may be and in each such case relating to the Business.

 

34

 

Section 3.18                                Hypervision
Companies.  The outstanding capital
stock of Hypervision consists of 100 shares of common stock (the “Hypervision
Shares”), all of which is owned by Credence and all of which constitute
Purchased Assets hereunder.  Other than
the Hypervision Shares, there are no outstanding securities of Hypervision,
including any options, warrants or other rights to acquire any securities of
Hypervision.  Neither Hypervision Company
has any Liabilities, and neither Hypervision Company is a party to any
Contracts.  Other than assets that would
constitute Purchased Assets if owned by Credence, Hypervision does not own any
assets.  Hypervision Taiwan does not own
any assets.  Neither Hypervision Company
has any employees.  The officers and
directors of Hypervision are listed in Section 3.18 of the Credence
Disclosure Schedule.  Hypervision is duly
organized, validly existing and in good standing under the laws of the State of
California and has all requisite power and authority to own, lease and operate
its properties.  Hypervision has no
Subsidiaries.

 

Section 3.19                                Representations
Complete; Disclosure.  None of the
representations or warranties made by Credence in this Agreement, and none of
the statements made in any Schedules or certificates required to be furnished
by Credence pursuant to this Agreement, contains, or will contain at the
Closing Date, any untrue statement of a material fact, nor omits, nor will it
omit at the Closing Date, to state any material fact necessary in order to make
the statements contained herein or therein, in the light of the circumstances
under which made, not misleading. Credence has provided Newco with all
information requested by Newco in connection with its decision to enter into
this Agreement, including all information Credence believes is reasonably
necessary for Newco to make such decision.

 

ARTICLE 4

 

REPRESENTATIONS AND WARRANTIES OF NEWCO

 

Newco hereby represents and warrants to
Credence as follows:

 

Section 4.1                                      Organization.  Newco is duly organized, validly existing and
in good standing under the laws of the State of Delaware, and has all requisite
power and authority to own, lease and operate its properties and to carry on
its business as now being conducted.

 

Section 4.2                                      Authority
Relative to Agreements.  Newco has
all necessary corporate power and authority to execute and deliver this
Agreement and each other Transaction Document to which it is a party, to
perform its obligations under this Agreement and each other Transaction
Document to which it is a party and to consummate the transactions contemplated
hereby and thereby.  The execution and
delivery of this Agreement and each other Transaction Document to which it is a
party and the consummation of the transactions contemplated hereby and thereby
have been duly and validly authorized by all corporate action of Newco
necessary to authorize this Agreement and each other Transaction Document to
which it is a party or to consummate the transactions contemplated hereby and
thereby.  This Agreement has been, and
when executed at Closing each other Transaction Document to which Newco is a
party will be, duly and validly executed and delivered by Newco, and
constitute, assuming the due authorization, execution and delivery hereof and
thereof by Credence, valid, legal and binding agreements of Newco, enforceable
against Newco in accordance with their respective terms, 

 

35

 

subject to any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect relating
to creditors’ rights generally or to general principles of equity.

 

Section 4.3                                      Consents
and Approvals; No Violations.  No
filing with or notice to, and no permit, authorization, consent or approval of
any Governmental Entity is necessary for the execution and delivery by Newco of
this Agreement or any other Transaction Document to which it is a party or the
consummation by Newco of the transactions contemplated by this Agreement and
such other Transaction Documents. 
Neither the execution, delivery and performance of this Agreement and
each other Transaction Document to which it is a party by Newco nor the
consummation by Newco of any of the transactions contemplated hereby and
thereby will (i) conflict with or result in any breach of any provision of
the Certificate of Incorporation or Bylaws of Newco, (ii) result in a
violation or breach of or constitute (with or without due notice or lapse of
time or both) a default under any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, lease, license, contract, agreement or other
instrument or obligation to which Newco is a party or by which it or any of its
properties or assets may be bound or (iii) violate any order, writ,
injunction, decree, law, statute, rule or regulation applicable to Newco
or any of its properties or assets.

 

Section 4.4                                      Capital.  Prior to the Closing, Newco shall have
received equity investments or loans in an aggregate amount of no less than
$1,000,000.

 

ARTICLE 5

 

COVENANTS OF ALL PARTIES

 

Section 5.1                                      Operation
of Business Prior to Closing.

 

(a)                                  Between
the date hereof and the Closing Date or the earlier termination of this
Agreement, Credence will operate the Business with the intention that all
goodwill of the Business shall be unimpaired at the Closing Date.  Credence shall (i) notify Newco of any
action, event, condition or circumstance, or group of actions, events,
conditions or circumstances, relating to Credence, the Business, the Purchased
Assets or any other person that results in, or could reasonably be expected to
result in, a Material Adverse Effect on the Business, (ii) notify Newco of
the commencement of any action, suit, claim, investigation or other like
proceeding by or against Credence or any of its Subsidiaries relating to the
Business or any Purchased Asset, and (iii) pay accounts payable and pursue
collection of its accounts receivable in the ordinary course of the Business, consistent
with past practices.

 

(b)                                 Without
limiting the generality or effect of the provisions of Section 5.1(a),
during the period from the date hereof and continuing until the earlier of the
termination of this Agreement and the Closing, except as expressly provided for
in this Agreement, Credence shall not, and shall cause each of its Subsidiaries
not to, do, cause or permit any of the following without the prior written
consent of Newco:

 

(i)                                     Contracts.  Enter into any Contract that in any way
relates to, concerns or affects the Purchased Assets or the Business;

 

36

 

(ii)                                  Employees,
Consultants and Independent Contractors. 
Hire any additional employees, consultants or independent contractors to
be engaged in the Business or enter into, or extend the term of or amend, any
employment or consulting agreement or offer letter with any person engaged in
the Business;

 

(iii)                               Exclusive
Rights.  Enter into or amend any
Contract that is or would be a Material Contract;

 

(iv)                              Dispositions.  Sell, lease, license or otherwise dispose of
or encumber any of the Purchased Assets, except the sale of Inventory in the
ordinary course of the Business consistent with past practice;

 

(v)                                 Leases.  Enter into any lease of equipment or property
in connection with the operation of the Business;

 

(vi)                              Capital
Expenditures.  Make any capital
expenditures, capital additions or capital improvements related to the
Business;

 

(vii)                           Insurance.  Reduce the amount of any insurance coverage
on any of the Purchased Assets;

 

(viii)                        Termination
or Waiver.  Terminate or waive any
right of substantial value constituting Purchased Assets;

 

(ix)                                Pay
Increases.  Pay any special bonus or
special remuneration to any Designated Employee or increase the salaries or
wage rates or benefits of any Designated Employee;

 

(x)                                   Severance
Arrangements.  Grant any severance or
termination pay to any Designated Employee, except in either case payments made
pursuant to written agreements outstanding on the date of this Agreement;

 

(xi)                                Lawsuits.  Commence or settle any lawsuit related to the
Business or any Purchased Asset;

 

(xii)                             Taxes.  Make, revoke or change any material election
in respect of Taxes, adopt or change any accounting method in respect of Taxes,
file or amend any material Return, enter into any closing agreement, settle any
claim or assessment in respect of Taxes, or consent to any extension or waiver
of the limitation period applicable to any claim or assessment in respect of
Taxes, in any case relating to the Business or any Purchased Asset;

 

(xiii)                          Revaluation.  Revalue any of the Purchased Assets,
including without limitation writing down the value of Inventory other than as
required by GAAP; or

 

(xiv)                         Other.  Take or agree to take any of the actions described
in Section 5.1(b)(i) through (xiii) above, or any action which would
make any of Credence’s 

 

37

 

representations or warranties contained in this
Agreement untrue or incorrect or prevent Credence from performing or cause
Credence not to perform any of its covenants hereunder.

 

Section 5.2                                      No
Solicitation or Negotiation.

 

(a)                                  Until
the earlier of (A) the Closing or (B) the valid termination of this
Agreement (the “Exclusivity Period”), neither Credence nor any of its
Affiliates shall (nor will they permit, as applicable, any of their officers,
directors, members, stockholders, agents, representatives or affiliates to),
directly or indirectly, take any of the following actions with any party other
than Newco and its designees: (i) solicit, initiate, participate in or
encourage any negotiations or discussions with respect to any offer or proposal
to acquire the Business, the Purchased Assets or any portion of the Business (a
“Competing Transaction”), or effect any Competing Transaction, (ii) disclose
any information not customarily disclosed to any person concerning Credence or
any of its Subsidiaries, the Purchased Assets or the Business or afford to any
person or entity access to its properties, books or records, other than in the
ordinary course of their business, (iii) assist or cooperate with any
person to make any proposal regarding a Competing Transaction, or (iv) enter
into any agreement for a Competing Transaction or consummate a Competing
Transaction with any person.

 

(b)                                 In
the event that Credence or any of its Affiliates shall receive any offer or
proposal, directly or indirectly, with respect to a Competing Transaction, or
any request for disclosure or access pursuant to clause (ii) above, Credence
or such Affiliate shall immediately inform Newco as to the existence of any
such offer or proposal (including any offers or proposals relating to a
financing of Credence) and will cooperate with Newco by furnishing any
information it may reasonably request, including, but not limited to, the name
of the party making such offer or proposal, all written documentation relating
to such offer or proposal and a summary of the principal terms of any such
offer or proposal that is not made in writing.

 

Section 5.3                                      Bulk
Sales.  Prior to the Closing,
Credence shall take all necessary action to comply with all applicable bulk
sales laws, including but not limited to the timely publication, recordation,
mailing an delivery of any and all statements, notices and other documents
required by all applicable bulk sales laws.

 

Section 5.4                                      Access
to Information.  Between the date
hereof and the earlier of the Closing Date and the valid termination of this
Agreement, Credence shall give Newco and its authorized representatives
(including its attorneys and accountants) reasonable access to all employees,
plants, offices, warehouses and other facilities and to (and where requested by
Newco, provide copies of) all Books and Records, Contracts and all personnel
files of the Designated Employees, and will furnish Newco with such financial
and operating data and other information with respect to the Business and
Purchased Assets as Newco may from time to time request.  Credence and Newco intend that, to the extent
the attorney work product privilege, attorney-client privilege or, without
limitation, any other privilege or privileges applies or may apply to any
confidential information, including confidential information obtained pursuant
to the immediately preceding sentence or obtained in this Agreement or the
Credence Disclosure Schedule, disclosure of such confidential information will
not result in a loss of the privilege(s) in question.

 

38

 

Section 5.5                                      Reasonable
Efforts.  Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use all
reasonable efforts to take or cause to be taken all actions and to do or cause
to be done all things reasonably necessary, proper or advisable under
Applicable Law to consummate and make effective the transactions contemplated
by this Agreement and each of the other Transaction Documents, including using
all reasonable efforts to: (a) prepare and file any filings or
notifications that must be made with any Governmental Entities; (b) obtain
consents of all third parties and Governmental Entities necessary, proper,
advisable or reasonably requested by Newco or Credence for the consummation of
the transactions contemplated by this Agreement; (c) contest any legal
proceeding relating to the transactions contemplated hereby; and (d) execute
any additional instruments reasonably necessary to consummate the transactions
contemplated hereby.

 

Section 5.6                                      Confidentiality.

 

Each of the parties hereto will hold, and
will cause its consultants and advisors to hold, in confidence all documents
and information furnished to it by or on behalf of another party to this
Agreement in connection with the transactions contemplated by this Agreement
and each of the other Transaction Documents; provided that the parties
agree that the terms and conditions of this Agreement will not be disclosed
without the prior written consent of the other party; and provided further that
after the Closing, Newco shall have no obligation to Credence to keep confidential
any information contained in, consisting of or relating to the Purchased Assets
or the Business.  In the event that any
party hereto receives a request to disclose all or any part of any confidential
information under the terms of a subpoena, order, civil investigative demand or
similar process issued by a court of competent jurisdiction or by another
Governmental Entity, such party agrees to (a) immediately notify the party
to whom such confidential information relates of the existence, terms and circumstances
surrounding such request, (b) consult with such party to whom the
information relates on the advisability of taking legally available steps to
resist or narrow such request; and (c) if disclosure of such information
is required, furnish only that portion of the confidential information that, in
the opinion of counsel to the party who has received the request, such party is
legally compelled to disclose and advise the party to whom such confidential
information relates as far in advance of such disclosure as possible so that
such party to whom the confidential information relates may seek an appropriate
protective order or other reliable assurance that confidential treatment will
be accorded such confidential information. 
In any event, the party who receives the request shall not oppose
actions by the party to whom the confidential information relates to obtain an
appropriate protective order or other reliable assurance that confidential
treatment will be accorded such confidential information.

 

Section 5.7                                      Public
Announcements.  Neither Credence,
Newco nor any of their respective Affiliates shall issue any press release or
otherwise make any public statements with respect to the transactions
contemplated by this Agreement or any of the other Transaction Documents
without the prior consent of Newco (in the case of Credence) or Credence (in
the case of Newco), except as may be required by Applicable Law, or by the rules and
regulations of, or pursuant to any agreement with, The NASDAQ Stock Market.  The parties agree to announce this Agreement
to Credence’s employees, customers, vendors and strategic partners at such
times and in such forms as is mutually agreed upon by all parties to this
Agreement.  After the Closing, nothing in
this Agreement shall prevent Newco from publicly advertising its 

 

39

 

business (including the Business) and its products and
services (including the Products) or from otherwise communicating the terms and
conditions of this Agreement and the transactions contemplated hereby (i) to
a potential aquiror of Newco or the Business from Newco or (ii) as may be
required or appropriate in connection with a public offering of securities by
Newco.

 

Section 5.8                                      Fees
and Expenses.  All out-of-pocket fees
and expenses incurred in connection with the transactions contemplated hereby
and the other Transaction Documents and the transactions contemplated thereby,
including all legal, accounting, financial advisory, consulting and other fees
and expenses of third parties incurred by a party in connection with the
negotiation, documentation and effectuation of the terms and conditions of this
Agreement and the other Transaction Documents and the transactions contemplated
hereby and thereby, shall be the obligation of the respective party incurring
such fees and expenses.

 

Section 5.9                                      Notification
of Certain Matters; Acceleration. 
Credence shall give prompt notice to Newco, and Newco shall give prompt
notice to Credence, of (a) the occurrence or nonoccurrence of any event
the occurrence or nonoccurrence of which has caused or would be likely to cause
any representation or warranty contained in this Agreement by it to be untrue
or inaccurate, and (b) any failure by it to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder; provided,
however, that the delivery of any notice pursuant to this Section 5.9
shall not cure such breach or non-compliance or limit or otherwise affect the
remedies available hereunder to the party receiving such notice.  Newco shall provide prompt notice to Credence
upon the occurrence of any of the following events occurring prior to the end
of the Earn-out Period: (i) the intention of Newco to discontinue the
provision of services or maintenance to any customer, or the discontinuance of
support for any Product Line, (ii) the execution of an agreement with a
third party for a Sale or a Product Line Sale, (iii) Newco at any time
becomes insolvent or goes into liquidation or receivership or is admitted to
the benefits of any procedure for the settlement or postponement of debts, or
is declared bankrupt; or (iv) becomes party to dissolution
proceedings.  Upon the occurrence of
items (iii) or (iv) prior to the end of the Earn-out Period, the
remaining unpaid amount of the Purchase Price (calculated as if a Sale had
occurred provided that the payment of the Earn-out Consideration, if any, shall
be first calculated as if a Sale had occurred but shall then be pro rated based
on the actual amount of Revenues of Newco between the Closing Date and such
event) shall be accelerated per the terms contained in Section 2.6(g), and
shall become immediately due and payable.

 

Section 5.10                                Tax
Matters.

 

(a)                                  Cooperation.  From and after the Closing Date, the parties
hereto agree to furnish or cause to be furnished to one another, upon request,
as promptly as practicable, such information and assistance relating to the
Purchased Assets and the Hypervision Companies as is reasonably necessary for
the filing of all Tax Returns, and making of any election related to Taxes, the
preparation for any audit by any taxing authority, and the prosecution or
defense of any claim or proceeding relating to any Tax Return.  The parties hereto shall cooperate with each
other in the conduct of any audit or other proceeding related to Taxes
involving the Purchased Assets or either Hypervision Company, and each shall
execute and deliver such powers of attorney and other documents as are
necessary to carry out the intent of this Section 5.10(a).

 

40

 

(b)                                 Allocation
of Taxes.  All personal property
taxes and similar ad valorem obligations levied with respect to the Purchased
Assets for a taxable period that includes (but does not end on) the Closing
Date shall be apportioned between Credence and Newco as of the Closing Date
based on the number of days of such taxable period included in the Pre-Closing
Tax Period and the number of days of such taxable period included in the Post-Closing
Tax Period.  Credence shall be liable for
the proportionate amount of such Taxes that is attributable to the Pre-Closing
Tax Period, and Newco shall be liable for the proportionate amount of such
Taxes that is attributable to the Post-Closing Tax Period.  Within a reasonable period after the Closing,
Credence and Newco shall present a statement to the other setting forth the
amount of reimbursement to which each is entitled under this Section 5.10(b),
together with such supporting evidence as is reasonably necessary to calculate
the proration amount.  The proration
amount shall be paid by the party owing it to the other within ten (10) days
after delivery of such statement. 
Thereafter, Credence shall notify Newco upon receipt of any bill for
personal property taxes relating to the Purchased Assets, part or all of which
are attributable to the Post-Closing Tax Period, and shall promptly deliver
such bill to Newco who shall pay the same to the appropriate taxing authority, provided
that if such bill covers any part of the Pre-Closing Tax Period, Credence shall
also remit prior to the due date of assessment to Newco payment for the
proportionate amount of such bill that is attributable to the Pre-Closing Tax
Period.  In the event that either
Credence or Newco shall thereafter make a payment for which it is entitled to
reimbursement under this Section 5.10(b), the other party shall make such
reimbursement promptly, but in no event later than thirty (30) days after the
presentation of a statement setting forth the amount of reimbursement to which
the presenting party is entitled along with such supporting evidence as is
reasonably necessary to calculate the amount of reimbursement.  Any payment required under this Section 5.10(b) and
not made when due shall bear interest at the rate of ten percent (10%) per
annum.

 

(c)                                  Sales
and Use Taxes.  Any Transfer Taxes
shall be determined at Closing based on the allocation described in Section 5.10(f) and
shall be paid by Newco.  To the extent
permitted by Applicable Law and to the extent consistent with the business
objectives of the transaction, Newco and Credence shall cooperate fully in
minimizing the Transfer Taxes, including through the electronic transfer of
Purchased Assets to the extent practicable. Credence shall have complete
authority to control, settle or defend any proposed adjustment to the Transfer
Taxes subject to Newco’s approval, which shall not be unreasonably withheld or
delayed, and the parties shall cooperate fully with each other in the defense or
settlement of any proposed adjustment to the Transfer Taxes.  At the Closing, Newco shall pay any Transfer
Taxes associated with the Purchased Assets.

 

(d)                                 Sales
Tax Certificates.  On or prior to the
Closing Date, Newco will provide Credence with an appropriate resale
certificate for sales tax purposes on the Inventory to be acquired by Newco
from Credence under this Agreement.

 

(e)                                  Section 338(h)(10) Election.  At the election of Newco, Credence will join
with Newco in making a timely, effective, and irrevocable election under Section 338(h)(10) of
the Code and under any comparable statutes in any other jurisdiction with
respect to Hypvervision, Inc (collectively, the “Section 338(h)(10) Elections”)
and shall file such Section 338(h)(10) Elections in accordance with
applicable regulations.  Any such forms
necessary to elect under Section 338(h)(10) shall be prepared by
Newco and provided to Credence no less 

 

41

 

than 45 days prior to their due date.  Credence and Newco shall cooperate in all
respects for the purpose of effectuating any Section 338(h)(10) Elections,
including the execution and filing of any required Returns and the grant of
consent to the Section 338(h)(10) Elections by Credence.  Credence shall be responsible for all income
taxes imposed on Credence, Hypervision or any of their Subsidiaries as a result
of making the Section 338(h)(10) Elections.

 

(f)                                    Allocation
of Purchase Price.  The Purchase
Price shall be allocated by Newco among the Purchased Assets (including the
stock of Hypervision) and, if the Section 338(h)(10) Elections are
made, among the assets of Hypervision in accordance with Section 1060 and Section 338,
respectively, and as set forth on Exhibit I (to be delivered at
Closing).  Each of the parties hereto
agrees to report the transactions contemplated hereby for state and federal Tax
purposes in accordance with such allocation of the Purchase Price.

 

(g)                                 Filing
of Tax Returns.  Credence shall
prepare all Tax Returns for the Hypervision Companies for all periods ending on
or prior to the Closing Date which are to be filed after the Closing.  Newco will prepare all Tax Returns for the
Hypervision Companies for all periods ending after the Closing Date.

 

(h)                                 Reimbursement
of Costs.  Each party agrees to
reimburse the other party’s out-of-pocket expenses incurred in complying with
any request for assistance made pursuant to this Section 5.10.

 

Section 5.11                                Further
Assurances.  From and after the
Closing Date, Newco and Credence agree to execute and deliver such other
documents, certificates, agreements and other writings and to take such other
actions as may be reasonably necessary or desirable in order to consummate or
implement expeditiously the transactions contemplated by this Agreement and to
secure Newco’s right, title and interest to the Purchased Assets.

 

Section 5.12                                Credence
Employee Matters.

 

(a)                                  Credence
shall not offer employment to, and shall accept the resignations of, any
Designated Employee who accepts Newco’s offer of employment effective on the
Closing Date.  Effective on the Closing
Date, the Designated Employees of the Business who have accepted the Newco’s
offer of employment (the “Transferred Employees”) shall cease
participating in, being covered by and accruing benefits under Credence’s
Compensation and Benefit Plans.

 

(b)                                 As
soon as administratively practicable following the Closing Date, eligible
Transferred Employees shall be eligible to participate in and be covered under
Newco’s 401(k) plan and the welfare benefit plans sponsored by Newco
unless they have been given the opportunity to elect, and have elected, to
decline coverage.

 

(c)                                  Notwithstanding
anything to the contrary, nothing in this Agreement is intended to confer upon
any Credence employee, or his or her successors, assigns, heirs or legal
representatives (whether or not such employee becomes an employee of Newco),
any rights or remedies hereunder, including (i) any rights of employment
for any specified period or under any specific terms of employment or (ii) any
employee benefits, severance or other compensation.  Credence and its Subsidiaries hereby waive
any and all noncompetition and

 

42

 

nonsolicitation provisions or agreements which may
otherwise apply to the employment of any employee by Newco, effective as of the
date of any such hiring.

 

Section 5.13                                Access
to Records.  At Newco’s reasonable
request from time to time whether before or after the Closing, Credence shall
provide Newco with access to and copies of all accounting records and Tax
Returns, financial statements and work papers and letters from accountants and
auditors relating to the Business and the Purchased Assets.  Credence shall be entitled to use such
information as it deems necessary or appropriate in the conduct of its
business, including to prepare financial statements and tax returns.

 

Section 5.14                                Newco
Records.  Until the end of the
Earn-out Period, Newco shall deliver to Credence as soon as practicable, but in
any event within forty-five (45) days after the end of each fiscal quarter, and
as soon as is practicable, but in any event within sixty (60) days after the
end of each fiscal year, a report showing the Revenues earned by Newco for such
period and a report showing the Service Liability Cost for such period, and
such other information relating to the calculation of Revenues and Service
Liability Cost for such period as Credence may reasonably request.

 

Section 5.15                                Ordered
Inventory.  Other than the $1,000,000
of Ordered Inventory to which Newco is entitled pursuant to Section 2.1
hereof, for the period between the Closing and the three year anniversary of
the Closing, if the operation of the Business by Newco requires that Newco
obtain inventory that (i) is Ordered Inventory and (ii) is held by
Credence at such time as Newco shall inform Credence of its need for such
inventory, then Newco shall purchase from Credence and Credence shall sell to
Newco such Ordered Inventory at a price equal to 60% of the price paid for such
Ordered Inventory by Credence.  In
connection therewith, Credence shall provide to Newco a copy of the relevant
invoice of the supplier and such evidence of the amount actually paid by
Credence with respect thereto as Newco shall reasonably request. Newco shall
have the right to return defective Ordered Inventory for 45 days after receipt
thereof by Newco.  Newco shall pay any
applicable shipping or freight charges.

 

Section 5.16                                Failure
to Pay Purchase Price.  If Newco
fails to pay any amounts payable under this Agreement when such amount becomes
due, Newco shall have thirty (30) days to cure such non-payment, however, all
such overdue amounts shall incur a late payment charge equal to seven percent
(7%) per annum until paid.  Subject to
the subordination provisions of Section 2.6(e) hereof, if all such
amounts remain unpaid following the thirty (30) day cure period, then Credence
may declare the entire unpaid Purchase Price (other than the Earn-out
Consideration or any reimbursement related to Service Liability Costs being
less than $4,000,000), plus all accrued and unpaid interest, immediately due
without notice. Newco further agrees to pay, in addition to any amounts, all
costs incurred by Credence in collection of any amounts due hereunder,
including attorneys fees, court costs, and other disbursements, including any
such fees accrued on appeal and in any bankruptcy proceeding.

 

Section 5.17                                Hypervision
Taiwan.  Credence shall reimburse
Newco for any and all reasonable expenses incurred by Newco or any of its
Subsidiaries (including Hypervision and Hypervision Taiwan) in connection with
the termination, dissolution, winding up or other action to close down
Hypervision Taiwan, including any legal fees, accounting fees, any payments to
any Governmental Entity (including any filing fees, Taxes, late fees or
penalties) or any other 

 

43

 

related expenses. 
Credence shall pay such amounts to Newco within 10 Business Days of
receiving an invoice therefore.

 

Section 5.18                                Newco
Capital.  In addition to the
$1,000,000 Newco shall have at Closing and the amounts paid to Newco from
Credence, within three weeks from the Closing Newco shall have received equity
investments or loans in an aggregate amount of no less than $1,600,000. Failure
of Newco to strictly comply with this covenant shall constitute a material
breach.  Upon such event, the
Transaction, this Purchase Agreement, and all transfers contemplated herein,
shall be void ab initio upon notice to Newco from Credence.  Upon receipt of such notice from Credence
following such a material breach of this Section 5.18, Newco shall use
reasonable care to ship all Acquired Assets to the destination provided by Credence,
at Newco’s cost.  Credence reserves all
other rights and remedies under this Agreement and applicable law.

 

ARTICLE 6

 

CLOSING CONDITIONS

 

Section 6.1                                      Conditions
Precedent to Each Party’s Obligations. 
The respective obligations of each party hereto to effect the Closing
and the other transactions contemplated hereby are subject to the satisfaction
at or prior to the Closing Date of the following conditions:

 

(a)                                  no
statute, rule, regulation, executive order, decree, ruling or injunction shall
have been enacted, entered, promulgated or enforced by any Governmental Entity
that prohibits, restrains, enjoins or restricts the consummation of the
transactions contemplated by the Transaction Documents;

 

(b)                                 any
governmental or regulatory notices, approvals or other requirements necessary
to consummate the transactions contemplated hereby shall have been given,
obtained or complied with, as applicable;

 

(c)                                  Credence
and Newco shall have executed and delivered, and caused any other parties
thereto to execute and deliver, the Transaction Documents to which each is a
party and any other documents or agreements necessary to consummate the
transactions contemplated hereby.

 

Section 6.2                                      Conditions
to the Obligations of Credence.  The
obligation of Credence to effect the transactions contemplated hereby is
subject to the satisfaction at or prior to the Closing Date of the following
conditions:

 

(a)                                  each
of the representations and warranties of Newco contained in this Agreement
shall be true and correct in all material respects, in each case as of the
Closing Date as though made on the Closing Date, except to the extent such
representations and warranties expressly relate to an earlier date, in which
case as of such earlier date;

 

(b)                                 Newco
shall have performed and complied in all material respects with all obligations
and covenants required by this Agreement to be performed or complied with by it
on or prior to the Closing Date; and

 

44

 

(c)                                  Credence
shall have received a certificate, dated as of the Closing Date, signed by a
duly authorized officer of Newco certifying that the conditions set forth in
Sections 6.2(a) and 6.2(b) have been satisfied.

 

Section 6.3                                      Conditions
to the Obligations of Newco.  The
obligations of Newco to effect the transactions contemplated hereby are subject
to the satisfaction at or prior to the Closing Date of the following
conditions:

 

(a)                                  each
of the representations and warranties of Credence contained in this Agreement
that are qualified as to materiality or Material Adverse Effect shall be true
and correct, and the representations and warranties of Credence contained in
this Agreement that are not so qualified shall be true and correct in all
material respects, in each case as of the Closing Date as though made on the
Closing Date, except to the extent such representations and warranties
expressly relate to an earlier date, in which case as of such earlier date;

 

(b)                                 Credence
shall have performed and complied in all material respects with all obligations
and covenants required by this Agreement to be performed or complied with by it
on or prior to the Closing Date;

 

(c)                                  Newco
shall have received a certificate, dated as of the Closing Date, signed by a
duly authorized officer of Credence certifying that the conditions set forth in
Sections 6.3(a), (b), (c), (e) and (h) have been satisfied;

 

(d)                                 any
third party consents necessary to consummate the transactions contemplated
hereby shall have been given, obtained or complied with as applicable, including
the consent to the assignment of all Assumed Contracts and all consents and
licenses necessary for Newco to operate the Business after the Closing as
operated by Credence prior to the Closing;

 

(e)                                  there
shall have been no events, changes or effects, individually or in the
aggregate, with respect to the Business having, or that could reasonably be
expected to have, a Material Adverse Effect on the Business or the Purchased
Assets;

 

(f)                                    none
of the employees of Credence listed on Exhibit D who are designated
key employees (the “Key Employees”) shall have taken any action or given
any indication or notice that such Key Employee does not intend to be employed
by Newco following the Closing (including any action to terminate, rescind or
revoke the offer letter such Key Employee executed with Newco), and at least
90% of the Designated Employees who are not Key Employees shall have accepted
the offer of employment Newco makes to such individual, and none of such
individuals or the Key Employees shall have terminated his or her employment
with Credence or advised Credence of his or her intention to do so for any
reason other than pursuant to offers of employment received from Newco in
connection with the transactions contemplated hereby.  For purposes hereof, an individual shall only
be deemed to have accepted Newco’s offer of employment if such individual
executes and delivers to Newco a written instrument, in form and substance
reasonably acceptable to Newco, accepting the offer of employment made to such
person as approved by Newco and Newco’s standard form of proprietary
information and inventions agreement, and any employment agreement or non-

 

45

 

competition agreement between Credence and such
individual shall have terminated his or her employment with Credence effective
as of the Closing Date;

 

(g)                                 Credence
shall have delivered to Newco a certificate(s) in form and substance
reasonably satisfactory to Newco, duly executed and acknowledged, certifying
any facts that would exempt the transactions contemplated hereby from
withholding under section 1445 of the Code and the Treasury Regulations
promulgated thereunder; and

 

(h)                                 each
of the directors and officers of Hypervision and Hypervision Taiwan shall have
resigned from such positions effective as of the Closing, and Newco shall have
been provided with evidence thereof.

 

ARTICLE 7

 

TERMINATION;
AMENDMENT; WAIVER

 

Section 7.1                                      Termination.  This Agreement may be terminated at any time
prior to the Closing Date:

 

(a)                                  by
mutual written consent of Credence and Newco;

 

(b)                                 by
Credence or Newco if (i) any court of competent jurisdiction or other
Government Entity, shall have issued a final order, decree or ruling, or taken
any other final action, restraining, enjoining or otherwise prohibiting the
transactions contemplated hereby and such order, decree, ruling or other action
is or shall have become nonappealable or (ii) the Closing Date has not
occurred by February 29, 2008 (the “Final Date”); provided, however,
that no party may terminate this Agreement pursuant to this Subsection (b) if
such party’s failure to fulfill any of its obligations under this Agreement or
a breach by such party of its representations and warranties hereunder shall
have been a principal reason that the Closing Date shall not have occurred on
or before said date;

 

(c)                                  by
Credence if (i) there shall have been a breach of any representations or
warranties on the part of Newco set forth in this Agreement or if any
representations or warranties of Newco shall have become untrue such that the
condition set forth in Section 6.2(a) would be incapable of being
satisfied by the Final Date, provided that Credence has not breached any of its
obligations hereunder in any material respect; or (ii) there shall have
been a breach by Newco of any of its covenants or agreements hereunder or in
any of the other Transaction Documents to which it is a party materially
adversely affecting the ability of Newco and Credence to consummate the
transactions contemplated hereby and Newco has not cured such breach within ten
(10) Business Days after notice by Credence thereof, provided that
Credence has not breached any of its obligations hereunder in any material
respect; or

 

(d)                                 by
Newco if (i) there shall have been a breach of any representations or
warranties on the part of Credence set forth in this Agreement or any of the
other Transaction Documents to which it is a party or if any representations or
warranties of Credence shall have become untrue such that the condition set
forth in Section 6.3(a) would be incapable of being satisfied by the
Final Date, provided that Newco has not breached any of its obligations
hereunder or in any of the other Transaction Documents to which it is a party
in any 

 

46

 

material respect; or (ii) there shall have been a
breach by Credence of one or more of its covenants or agreements and Credence
has not cured such breach within ten (10) Business Days after notice by
Newco thereof, provided that Newco has not breached any of its obligations
hereunder in any material respect.

 

Section 7.2                                      Effect
of Termination.  Upon the termination
of this Agreement pursuant to Section 7.1, this Agreement shall forthwith
become void and have no effect without any liability on the part of any party
hereto or its Affiliates, directors, officers or stockholders other than the
provisions of this Section 7.2 (Effect of Termination) and Sections 5.5
(Confidentiality) and 5.6 (Public Announcements) and Article 9 (Miscellaneous).  Nothing contained in this Section 7.2
shall relieve any party from liability for any breach of this Agreement prior
to such termination, and the obligations of Credence and Newco under any
confidentiality agreement relating to the transactions contemplated by this
Agreement shall survive such termination.

 

Section 7.3                                      Amendment.  This Agreement may be amended only by an
instrument in writing signed on behalf of the parties hereto.

 

Section 7.4                                      Extension;
Waiver.  At any time prior to the
Closing Date, each party hereto may, only by action taken in writing, (a) extend
the time for the performance of any of the obligations or other acts of the
other party, (b) waive any inaccuracies in the representations and
warranties of the other party contained herein or in any document, certificate
or writing delivered pursuant hereto or (c) waive compliance by the other
party with any of the agreements or conditions contained herein.  Any agreement on the part of any party hereto
to any such extension or waiver shall be valid only if set forth in an
instrument, in writing, signed on behalf of such party.  The failure of any party hereto to assert any
of its rights hereunder shall not constitute a waiver of such rights.

 

ARTICLE 8

 

INDEMNIFICATION

 

Section 8.1                                      Obligations
of Credence.  Subject to Section 8.6
and 8.7, Credence shall indemnify and hold harmless Newco and its directors,
officers, employees, affiliates, agents and assigns (each an “Indemnified
Party”), from and against any and all Losses incurred by such Indemnified
Party, directly or indirectly, as a result of, based upon or arising from:

 

(a)                                  any
inaccuracy in or breach or nonperformance of any of the representations,
warranties, covenants or agreements made by Credence in or pursuant to this
Agreement or any Transaction Document to which Credence is a party;

 

(b)                                 any
Excluded Liability, including Pre-Closing Taxes and any third party claims or
demands arising in connection with the conduct of the Business on or prior to
the Closing Date, including obligations under Contracts that are not Assumed
Liabilities;

 

(c)                                  any
Liability of Hypervision or any of its Subsidiaries (including Hypervision
Taiwan) existing as of the Closing or arising as a result of or related to any
event, action, omission, circumstance or other cause occurring or existing
prior to the Closing; and

 

47

 

(d)                                 fraud,
intentional misrepresentation or willful breach of this Agreement or any
Transaction Document by Credence.

 

Section 8.2                                      Certain
Tax Matters.

 

(a)                                  Purchase
Price Adjustment.  Credence and Newco
agree to treat any indemnity payments under this Agreement as an adjustment to
the Purchase Price for all Tax purposes and shall take no position contrary
thereto unless required to do so by applicable Tax law pursuant to a
determination as defined in Section 1313(a) of the Code.

 

(b)                                 Tax
Adjustment.  If the Indemnified Party
is liable for any additional Taxes as a result of the payment of amounts in
respect of a Loss, the Indemnifying Parties will pay to the Indemnified Party
in addition to such amounts in respect of the Loss within 10 days after being
notified by the Indemnified Party of the payment of such liability (x) an
amount equal to such additional Taxes (the “Tax Reimbursement Amount”)
plus (y) any additional amounts required to pay additional Taxes imposed
with respect to the Tax Reimbursement Amount and with respect to amounts
payable under this clause (y), with the result that the Indemnified Party shall
have received from the Indemnifying Parties, net of the payments of Taxes, an
amount equal to the Loss.

 

Section 8.3                                      Procedure.

 

(a)                                  Notice.  Any Indemnified Party seeking indemnification
with respect to any Loss shall give notice to Credence on or before any
applicable expiration date specified in this Article 8.  The notice shall set forth in reasonable
detail the amount of the Loss for which indemnification is being sought, a
description of such Loss, and the basis for the claim.  Credence shall have 15 days to evaluate the
claims in the notice.  If Credence shall
not object in writing to the Indemnified Party within such 15 day period, the
claims shall be allowed and Credence shall have no right to object to such
claims.  If Credence shall timely object
to either the amount or the validity of the claim, the Indemnified Party and
Credence shall attempt in good faith to agree upon the rights of such persons
with respect to the claim in the notice. 
If they are unable to reach an agreement within 15 days, either Credence
or the Indemnified Party may demand arbitration of the matter (unless the
matter is at issue in a pending third party claim, in which case arbitration
shall not be commenced until such amount is ascertained or both persons agree
to arbitration), and the matter shall be settled by arbitration conducted by
one arbitrator mutually agreeable to the Indemnified Party and Credence.  In the event that within 10 days after
submission of any dispute to arbitration, the Indemnified Party and Credence
cannot mutually agree on one arbitrator, the Indemnified Party and Seller shall
each select one arbitrator and the two arbitrators so selected shall select a
third arbitrator.  The arbitrator(s) shall
set a limited time period and establish procedures designed to reduce the cost
and time for discovery.  The decision of
the arbitrator or a majority of the arbitrators, as the case may be, as to the
validity and amount of any claim for indemnification for Losses shall be
binding and conclusive upon the Indemnified Party and Credence.  Such decision shall be written and shall be
supported by written findings of fact and conclusions which shall set forth the
award, judgment, decree or order awarded by the arbitrator(s). Judgment upon
any award rendered by the arbitrator(s) may be entered in any court having
jurisdiction.

 

48

 

(b)                                 Defense.  If any claim or liability that may give rise
to indemnification hereunder is asserted by any third party against any
Indemnified Party, Credence shall upon the written request of the Indemnified
Party, defend any actions or proceedings brought against the Indemnified Party
in respect of matters covered by the indemnity, but the Indemnified Party shall
have the right to conduct and control the defense, compromise or settlement of
any Indemnifiable Claim if the Indemnified Party chooses to do so, on behalf of
and for the account and risk of Credence who shall be bound by the result so
obtained to the extent provided herein. 
If, after a request to defend any action or proceeding, Credence
neglects to defend the Indemnified Party, a recovery against the latter
suffered by it in good faith, is conclusive in its favor against Credence,
provided however that, if Credence has not received reasonable notice of the action
or proceeding against the Indemnified Party, or is not allowed to control the
defense, judgment against the Indemnified Party is only presumptive evidence
against Credence.  The parties shall
cooperate in the defense of all third party claims which may give rise to
Indemnifiable Claims hereunder.  In
connection with the defense of any claim, each party shall make available to
the party controlling such defense, any books, records or other documents
within its control that are reasonably requested in the course of such defense.

 

Section 8.4                                      Survival
of Claims.  Any matter as to which a
claim has been asserted by notice to Credence that is pending or unresolved at
the end of any applicable limitation period shall continue to be covered by
this Article 8 notwithstanding any applicable statute of limitations
(which the parties hereby waive) or the limitations set forth herein until such
matter is finally terminated or otherwise resolved by the parties or by an
arbitrator or a court of competent jurisdiction and any amounts payable
hereunder are finally determined and paid. 
Other than as set forth in Section 8.7 with respect to Credence’s
representations and warranties under this Agreement and the Transaction
Documents, Credence’s obligation to indemnify Newco pursuant to this Article 8
shall survive the Closing indefinitely.

 

Section 8.5                                      Notice
by Seller.  Credence shall notify
Newco of any liabilities, claims or misrepresentations, breaches or other
matters covered by this Article 8 upon (i) discovery facts or
circumstances constituting such liability, claim, misrepresentation, breach or
other matter, or (ii) receipt of notice thereof (other than from Newco),
in either case whether before or after Closing.

 

Section 8.6                                      Limitation.  The liability of Credence for indemnification
pursuant to Section 8.1(a) shall be limited to the aggregate amount
of $5,000,000, provided that no Indemnified Party shall be entitled to
indemnification pursuant to Section 8.1(a) until such time as there
have been Losses that are indemnifiable under Section 8.1(a) of at
least $50,000, in which case the Indemnified Parties shall be entitled to
indemnification for such $50,000 of Losses; provided further that Losses
incurred as a result of the breach by Credence of Section 5.17 hereof shall
not be subject to such $50,000 threshold.

 

Section 8.7                                      Survival
of Representations and Warranties and Covenants.  Credence’s representations and warranties in
this Agreement and any Transaction Documents to which it is a party shall
survive until the two-year anniversary of the Closing Date, provided that the
representations and warranties contained in Sections 3.2, 3.9, 3.10 and 3.14
shall survive until the later of (i) the two-year anniversary of the
Closing Date and (ii) the expiration of the applicable statute of
limitations.  Newco’s representations and
warranties in this Agreement or 

 

49

 

any Transaction Document shall terminate at the
Closing.  The parties’ covenants under
this Agreement or any Transaction Document shall survive the Closing to the
extent such covenants are to be performed after the Closing.

 

ARTICLE 9

 

MISCELLANEOUS

 

Section 9.1                                      Entire
Agreement; Assignment.  This
Agreement (including the Exhibits and Schedules hereto and the Credence Disclosure
Schedule) and the other Transaction Documents constitute the entire agreement
among the parties hereto with respect to the subject matter hereof and thereof
and supersede all other prior and contemporaneous agreements and understandings
both written and oral between the parties with respect to the subject matter
hereof.

 

Section 9.2                                      Validity.  If any provision of this Agreement or the
application thereof to any person or circumstance is held invalid or
unenforceable, the remainder of this Agreement and the application of such
provision to other persons or circumstances shall not be affected thereby and
to such end the provisions of this Agreement are agreed to be severable.  In the event of any such holding, the invalid
or unenforceable provision shall be replaced with a valid and enforceable
provision that as closely as possible accomplishes the objectives and results
intended by the provision that had been held to be invalid or unenforceable.

 

Section 9.3                                      Notices.  All notices and other communications pursuant
to this Agreement shall be in writing and shall be deemed given if delivered
personally, telecopied, sent by nationally-recognized overnight courier or
mailed by registered or certified mail (return receipt requested), postage
prepaid, to the parties at the addresses set forth below or to such other
address as the party to whom notice is to be given may have furnished to the
other parties hereto in writing in accordance herewith.  Any such notice or communication shall be
deemed to have been delivered and received (a) in the case of personal
delivery, on the date of such delivery, (b) in the case of fax, on the
date sent if confirmation of receipt is received and such notice is also
promptly mailed by registered or certified mail (return receipt requested), (c) in
the case of a nationally-recognized overnight courier in circumstances under
which such courier guarantees next business day delivery, on the next business
day after the date when sent and (d) in the case of mailing, on the third
business day following that on which the piece of mail containing such
communication is posted: if to

 

	
   

  	
  Newco:

  	
  DCG Systems, Inc.

  
	
   

  	
   

  	
  27240 Natoma Road

  
	
   

  	
   

  	
  Los Altos Hills, CA 94022

  
	
   

  	
   

  	
  Fax: (650) 948-9502

  
	
   

  	
   

  	
  Attention: Israel Niv

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
  O’Melveny and Myers LLP

  
	
   

  	
   

  	
  2765 Sand Hill Road

  
	
   

  	
   

  	
  Menlo Park, CA 94025-7019

  
	
   

  	
   

  	
  Fax: (650) 473-2601

  

 

50

 

	
   

  	
   

  	
  Attention: Warren T.
  Lazarow, Esq.

  
	
   

  	
   

  	
   

  
	
   

  	
  if to Credence to:

  	
  Credence Systems Corporation

  
	
   

  	
   

  	
  1421 California Circle

  
	
   

  	
   

  	
  Milpitas, CA 95035

  
	
   

  	
   

  	
  Fax: 408-635-4985

  
	
   

  	
   

  	
  Attention: Byron Milstead

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
  Credence Systems Corporation

  
	
   

  	
   

  	
  5975 NW Pinefarm Place

  
	
   

  	
   

  	
  Hillsboro, OR 97124

  
	
   

  	
   

  	
  Telecopier: (503)

  
	
   

  	
   

  	
  Attention: Legal Department

  

 

or to such other address as the person to
whom notice is given may have previously furnished to the others in writing in
the manner set forth above.

 

Section 9.4                                      Dispute
Resolution.

 

(a)                                  All
disputes arising directly under this Agreement or the grounds for termination
thereof, including whether any payments may be due under this Agreement, except
as set forth in Section 2.6, shall be resolved as follows:  The senior management of both parties shall
meet to attempt to resolve any such dispute. 
If the dispute cannot be resolved by the senior management, either party
may make a written demand for formal dispute resolution and specify therein the
scope of the dispute.  Within thirty (30)
days after such written notification, the parties agree to meet for one day
with an impartial mediator and consider dispute resolution alternatives other
than litigation.  If an alternative
method of dispute resolution is not agreed upon within thirty (30) days after
the one-day mediation, either party may begin litigation proceedings

 

(b)                                 Notwithstanding
the provisions of Section 9.4(a), each party shall have the right, without
the requirement of first seeking a remedy through any dispute resolution
alternative (including arbitration) that has been agreed upon, to seek
preliminary injunctive or other equitable relief in any proper court in the
event that such party determines that eventual redress through the dispute
resolution alternative will not provide a sufficient remedy for any violation
of this Agreement by the other party.

 

(c)                                  In
no event shall disputes under any employment arrangement or the offers of
employment made by Newco to any Designated Employee be governed by this Section 9.4.

 

Section 9.5                                      Governing
Law.  This Agreement shall be deemed
to be made and in all respects shall be interpreted, construed and governed by
and in accordance with the laws of the State of California without regard to
the conflict of law principles thereof.

 

Section 9.6                                      Venue;
Waiver of Jury Trial.

 

51

 

(a)                                  The
parties hereby agree that any action, suit or proceeding for the interpretation
or enforcement of this Agreement or of any of the documents referred to in this
Agreement may be brought or maintained in any court of proper jurisdiction.

 

(b)                                 The
parties agree that irreparable damage would occur and that the parties would
not have any adequate remedy at law in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached.  It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of proper jurisdiction,
this being in addition to any other remedy to which they are entitled at law or
in equity.

 

(c)                                  EACH
PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER
THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY
RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF
THE OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT
OR ANY OF THE OTHER TRANSACTION DOCUMENTS. 
EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (1) NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
THE FOREGOING WAIVER, (2) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED
THE IMPLICATIONS OF THIS WAIVER, (3) EACH SUCH PARTY MAKES THIS WAIVER
VOLUNTARILY, AND (4) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.6.

 

Section 9.7                                      Descriptive
Headings; Article and Schedule References.  The descriptive headings herein are inserted
for convenience of reference only and are not intended to be part of or to affect
the meaning or interpretation of this Agreement.  All references in this Agreement to Articles,
Sections, Subsections, Clauses, Exhibits and Schedules are references to
Articles, Sections, Subsections, Clauses, Exhibits and Schedules, respectively,
in and to this Agreement, unless otherwise specified.

 

Section 9.8                                      Parties
in Interest.  This Agreement shall be
binding upon and inure solely to the benefit of each party hereto and its
successors and permitted assigns and, except as expressly provided herein,
nothing in this Agreement is intended to or shall confer upon any other person
any rights, benefits or remedies of any nature whatsoever under or by reason of
this Agreement.

 

Section 9.9                                      Counterparts;
Facsimile.  This Agreement may be
executed in one or more counterparts, each of which shall be deemed to be an
original but all of which shall constitute one and the same agreement.  Signatures delivered by facsimile
transmission or other electronic means shall be deemed original signatures for
all purposes.

 

52

 

[THE REMAINDER
OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

 

53

 

IN WITNESS WHEREOF, each of the parties has
caused this Agreement to be duly executed on its behalf as of the day and year
first above written.

 

	
   

  	
  DCG
  SYSTEMS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Israel Niv

  	
   

  
	
   

  	
  Name: Israel Niv

  
	
   

  	
  Title: President and Chief
  Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CREDENCE SYSTEMS CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Lavi Lev

  	
   

  
	
   

  	
  Name: Lavi Lev

  
	
   

  	
  Title: President and Chief
  Executive Officer

  

 

[Signature Page to Purchase Agreement]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00136-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00136-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00136-of-00352.parquet"}]]