Exhibit 4.2
THIS CONVERTIBLE NOTE IS ISSUED WITH
ORIGINAL ISSUE DISCOUNT. THE ISSUE PRICE IS $950 PER $1,000
PRINCIPAL AMOUNT AT MATURITY. THE ORIGINAL ISSUE DISCOUNT IS $50
PER $1,000 PRINCIPAL AMOUNT AT MATURITY. THE ISSUE DATE IS DECEMBER
20, 2006. THE YIELD TO MATURITY IS 5.121% PER ANNUM, COMPOUNDED
SEMI-ANNUALLY.
THIS CONVERTIBLE NOTE IS A GLOBAL
SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED
TO AND IS REGISTERED IN THE NAME OF THE DEPOSITARY OR A NOMINEE OF
THE DEPOSITARY, WHICH MAY BE TREATED BY THE COMPANY, THE TRUSTEE
AND ANY AGENT THEREOF AS OWNER AND HOLDER OF THIS CONVERTIBLE NOTE
FOR ALL PURPOSES.
UNLESS THIS CERTIFICATE IS PRESENTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TRUST COMPANY, A
NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR IN SUCH OTHER NAME AS IS REQUESTED BY THE AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
UNLESS AND UNTIL IT IS EXCHANGED IN
WHOLE OR IN PART FOR REGISTERED CONVERTIBLE NOTES IN DEFINITIVE
REGISTERED FORM IN THE LIMITED CIRCUMSTANCES REFERRED TO IN THE
INDENTURE, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF
THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY.
THIS SECURITY HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”). THE HOLDER HEREOF, BY PURCHASING
THIS SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS
SECURITY MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
(X) PRIOR TO THE SECOND ANNIVERSARY OF THE ISSUE HEREOF (OR
ANY PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER THAT WAS
AN “AFFILIATE” (WITHIN THE MEANING OF RULE 144 UNDER
THE SECURITIES ACT) OF THE COMPANY AT ANY TIME DURING THE THREE
MONTHS PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE OTHER
THAN (1) TO THE COMPANY, (2) SO LONG AS THIS SECURITY IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER
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THE SECURITIES ACT (“RULE 144A”), IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A TO A PERSON
WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO
WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (3) IN AN OFFSHORE
TRANSACTION (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT)
IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT,
(4) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE
SECURITIES ACT OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH
ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.
THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, REPRESENTS AND
AGREES FOR THE BENEFIT OF THE COMPANY THAT IT IS (1) A
QUALIFIED INSTITUTIONAL BUYER OR (2) NOT A U.S. PERSON AND IS
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR AN ACCOUNT
SATISFYING THE REQUIREMENTS OF PARAGRAPH (k) (2) OF RULE
902 UNDER) REGULATION S UNDER THE SECURITIES ACT. IN ANY CASE THE
HOLDER HEREOF WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY
HEDGING TRANSACTION WITH REGARD TO THIS SECURITY OR ANY COMMON
STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY EXCEPT AS PERMITTED
BY THE SECURITIES ACT.
A-2
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No. R-1
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$122,500,000
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CUSIP 225302 AH 1
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CREDENCE SYSTEMS
CORPORATION
3.5% CONVERTIBLE SENIOR
SUBORDINATED NOTE DUE 2010
Credence Systems Corporation, a
Delaware corporation, promises to pay to Cede & Co., or
registered assigns, the principal sum of One Hundred Twenty-Two
Million Five Hundred Thousand ($122,500,000) (which principal
amount may from time to time be increased or decreased to such
other principal amount by adjustments made on the records of the
Trustee in accordance with the Indenture) on May 15,
2010.
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Interest Payment Dates:
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May 15 and
November 15, commencing May 15, 2007
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Regular Record Dates:
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May 1 and
November 1
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[SIGNATURE PAGE FOLLOWS]
A-3
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CREDENCE
SYSTEMS CORPORATION
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By
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Name:
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Title:
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Certificate of
Authentication
This is one of the Convertible Notes
described in the within mentioned Indenture.
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THE BANK OF NEW YORK TRUST COMPANY, N.A.,
as Trustee
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By
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Authorized Signatory
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Dated:
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A-4
[BACK OF CONVERTIBLE
NOTE]
CREDENCE SYSTEMS
CORPORATION
3.5% CONVERTIBLE SENIOR
SUBORDINATED NOTE DUE 2010
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1.
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INTEREST.
Credence Systems Corporation, a Delaware corporation (the
“Company”), promises to pay interest on the principal
amount of this Convertible Note at the rate per annum shown above.
The Company will pay interest semi-annually in arrears on
May 15 and November 15 of each year, beginning
May 15, 2007. Interest on the Convertible Notes will accrue
from the most recent interest payment date to which interest has
been paid or, if no interest has been paid, from December 20,
2006. Interest (and Liquidated Damages, if any) will be computed on
the basis of a 360-day year composed of twelve 30-day
months.
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2.
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METHOD OF
PAYMENT. The Company will pay interest (and Liquidated Damages, if
any) on the Convertible Notes (except defaulted interest) to the
person in whose name each Convertible Note is registered at the
close of business on the May 1 or November 1 immediately
preceding the relevant interest payment date (each a “Regular
Record Date”) (other than with respect to a Convertible Note
repurchased in connection with a Designated Event on a repurchase
date, during the period from the close of business on a Regular
Record Date to (but excluding) the next succeeding interest payment
date, in which case accrued interest (and Liquidated Damages, if
any) shall be payable (unless such Convertible Note or portion
thereof is converted) to the holder of the Convertible Note or
portion thereof repurchased in accordance with the applicable
repurchase provisions of the Indenture). The holder must surrender
Convertible Notes to a Paying Agent to collect principal payments.
The Company will pay the principal of, and interest and Liquidated
Damages, if any, on the Convertible Notes at the office or agency
of the Company maintained for such purpose, in money of the United
States that at the time of payment is legal tender for payment of
public and private debts. Until otherwise designated by the
Company, the Company’s office or agency maintained for such
purpose will be the principal Corporate Trust Office of the Trustee
(as defined below). However, the Company may pay principal, and
interest and Liquidated Damages, if any, by check payable in such
money, and may mail such check to the holders of the Convertible
Notes their respective addresses as set forth in the Register of
holders of Convertible Notes.
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3.
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PAYING AGENT
AND REGISTRAR. The Bank of New York Trust Company, N.A. (together
with any successor Trustee under the Indenture referred to below,
the “Trustee”), will act as Paying Agent and Registrar.
The Company may change the Paying Agent, Registrar or co-registrar
without prior notice. Subject to certain limitations in the
Indenture, the Company or any of its subsidiaries may act in any
such capacity.
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A-5
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4.
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INDENTURE. The
Company issued the Convertible Notes under an Indenture dated as of
December 20, 2006 (the “Indenture”) between the
Company and the Trustee. The terms of the Convertible Notes include
those stated in the Indenture and those made part of the Indenture
by reference to the Trust Indenture Act of 1939 (the
“TIA”) as in effect on the date of the Indenture. The
Convertible Notes are subject to, and qualified by, all such terms,
certain of which are summarized hereon, and holders are referred to
the Indenture and the TIA for a statement of such terms. The
Convertible Notes are unsecured subordinated obligations of the
Company. The aggregate principal amount of Initial Convertible
Notes outstanding at any time may not exceed $122,500,000 in
aggregate principal amount, except as provided in Section 2.07
of the Indenture. The Indenture pursuant to which this Convertible
Note is issued provides that Additional Convertible Notes may be
issued thereunder, if certain conditions are met. Capitalized terms
not defined below have the same meaning as is given to them in the
Indenture.
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5.
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NO OPTIONAL
REDEMPTION. The Company shall have no right to redeem the
Convertible Notes.
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6.
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DESIGNATED
EVENT. Upon the occurrence of a Designated Event, the Company shall
make a Designated Event Offer to repurchase all outstanding
Convertible Notes at a price equal to 100% of the aggregate
principal amount of the Convertible Notes, plus accrued and unpaid
interest (and Liquidated Damages, if any) to, but excluding, the
date of repurchase, such offer to be made as provided in the
Indenture. To accept the Designated Event Offer, the holder hereof
must comply with the terms thereof, including surrendering this
Convertible Note, with the “Option of Holder to Elect
Repurchase” portion hereof completed, to the Company, a
depositary, if appointed by the Company, or a Paying Agent, at the
address specified in the notice of the Designated Event Offer
mailed to holders as provided in the Indenture, prior to the
Designated Event Offer Termination Date.
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7.
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SUBORDINATION.
The Company’s payment of the principal of, and interest and
Liquidated Damages, if any, on the Convertible Notes is
subordinated to the prior payment in full of the Company’s
Senior Debt as set forth in the Indenture. Each holder of
Convertible Notes by his or her acceptance hereof covenants and
agrees that all payments of the principal of, and interest and
Liquidated Damages, if any, on the Convertible Notes by the Company
shall be subordinated in accordance with the provisions of Article
XI of the Indenture, and each holder of Convertible Notes accepts
and agrees to be bound by such provisions.
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8.
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DENOMINATIONS,
TRANSFER, EXCHANGE. The Convertible Notes are in registered form
without coupons in denominations of $1,000 and integral multiples
of $1,000. The transfer of Convertible Notes may be registered and
Convertible Notes may be exchanged as provided in the Indenture. As
a condition of transfer, the Registrar and the Trustee may require
a holder, among other things, to furnish appropriate endorsements
and transfer documents, and the Company and the Registrar may
require a holder to pay any taxes and fees required by law or
permitted
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A-6
by the Indenture. The Company or the
Registrar need not exchange or register the transfer of any
Convertible Note or portion of a Convertible Note submitted for
repurchase or surrendered for conversion.
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9.
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PERSONS DEEMED
OWNERS. The registered holder of a Convertible Note shall be
treated as its owner for all purposes.
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10.
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AMENDMENTS AND
WAIVERS. Subject to certain exceptions, the Indenture or the
Convertible Notes may be amended or supplemented with the consent
of the holders of at least a majority in principal amount of the
then outstanding Convertible Notes, and any existing default may be
waived with the consent of the holders of a majority in principal
amount of the then outstanding Convertible Notes.
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Without the consent of any holder,
the Indenture or the Convertible Notes may be amended to:
(a) cure any ambiguity or correct or supplement any defective
or inconsistent provision contained in the Indenture, or make any
other changes in the provisions of the Indenture which the Company
and the Trustee may deem necessary or desirable provided such
amendment does not materially and adversely affect the legal rights
under the Indenture of the holders of Convertible Notes;
(b) provide for uncertificated Convertible Notes in addition
to or in place of certificated Convertible Notes; (c) evidence
the succession of another person to the Company and provide for the
assumption by such successor of the covenants and obligations of
the Company thereunder and in the Convertible Notes as permitted by
Section 5.01 of the Indenture; (d) provide for conversion
rights or repurchase rights of holders of Convertible Notes in the
event of consolidation, merger, share exchange or sale of all or
substantially all of the assets of the Company as required to
comply with Sections 5.01 or 12.06 of the Indenture;
(e) reduce the Conversion Price; (f) evidence and provide
for the acceptance of the appointment under the Indenture of a
successor Trustee; (g) make any change that would provide any
additional rights or benefits to the holders of Convertible Notes
or that does not adversely affect the legal rights under the
Indenture of any such holder; or (h) comply with the
requirements of the Commission in order to effect or maintain the
qualification of the Indenture under the TIA.
Without the consent of each holder
affected, an amendment or waiver may not (with respect to any
Convertible Notes held by a nonconsenting holder): (a) reduce
the principal amount of Convertible Notes whose holders must
consent to an amendment, supplement or waiver; (b) reduce the
principal of, or change the fixed maturity of any Convertible Note
or alter the provisions with respect to the mandatory repurchase of
the Convertible Notes; (c) reduce the rate of or change the
time for payment of interest, including defaulted interest, or
Liquidated Damages, if any, on any Convertible Notes;
(d) change the make-whole premium payable pursuant to
Section 12.01(h); (e) waive a Default or Event of Default
in the payment of principal of or interest or Liquidated Damages,
if any, on the Convertible Notes (except a rescission of
acceleration of the Convertible Notes by the holders of at least a
majority in aggregate principal amount of the Convertible Notes and
a waiver of
A-7
the payment default that resulted
from such acceleration); (f) make the principal of, or
interest or Liquidated Damages, if any, on, any Convertible Note
payable in money other than as provided for in the Indenture and in
the Convertible Notes; (g) make any change in the provisions
of the Indenture relating to waivers of past Defaults or the rights
of holders of Convertible Notes to receive payments of principal
of, or interest or Liquidated Damages, if any, on the Convertible
Notes; (h)&
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