Under the terms of the agreement, Credence shareholders will receive shares of LTX common stock based on an exchange ratio that will be determined at the closing of the merger to cause Credence shareholders to own 50.02% of the outstanding shares of the combined company and LTX shareholders to own 49.98% of the outstanding shares of the combined company. If the exchange ratio was calculated based on shares outstanding as of June 20, 2008, each outstanding share of Credence common stock would be converted into approximately 0.6133 shares of LTX common stock in the transaction.

Credence and LTX believe the combined strengths of the two companies will create a leading provider of focused, cost-optimized solutions designed to enable customers to implement best-in-class test strategies to maximize their profitability. The new company will address the broad, divergent test requirements of the wireless, computing, automotive and entertainment market segments. It will offer a complementary portfolio of technologies, the largest installed base in the Asia-Pacific region, and a global network of strategically deployed applications and support resources.

Under the terms of the agreement, Lavi Lev, President and CEO of Credence, will become Executive Chairman of the combined company for a transitional period following the merger. David Tacelli, CEO and President of LTX, will become CEO and President; and Mark Gallenberger, CFO and Vice President of LTX, will become CFO. Casey Eichler, Senior Vice President and CFO of Credence, has agreed to remain with the combined company through a transition period. The board of directors of the combined company will include five directors designated by LTX (including Tacelli), and four directors designated by Credence (including Lev).

"I am very excited about joining forces with LTX. This merger, from a technical and business point of view, represents the logical next step for both companies' long-term growth," said Lavi Lev, President and CEO of Credence. "We believe the combined strength of our technical expertise in RF, digital, mixed-signal and analog, coupled with a complementary product portfolio, will benefit our customers as they test and deploy high volume, highly integrated devices into their respective market segments. From a business perspective, the merger broadens our customer base and provides a strong opportunity for growth."

"The technical and business challenges faced by our customers continue to intensify as time to market shrinks and margins are pressured by demands for new features at lower prices," noted David Tacelli, chief executive officer and president of LTX. "Now more than ever, it is vital we deliver cost optimized test solutions focused on our customers' specific technologies, product mix and device volume levels. We believe the timely merger of Credence and LTX enables us to build a test company with the financial strength, growth opportunities, critical mass, and operational efficiency to lead the industry as it faces these challenges."

"We expect the combination to drive efficiencies associated with operating a larger business, and we anticipate annual cost savings of approximately $25 million at the end of the integration period," noted Mark Gallenberger, CFO and Vice President of LTX. "The transaction is expected to be accretive on a non-GAAP basis, excluding restructuring charges, within 12 months of combined operations and realization of the cost savings."

The merger is subject to approval by both companies' stockholders, as well as the satisfaction of customary closing conditions and regulatory approvals. The boards of directors of both companies have unanimously approved the agreement and recommend their stockholders vote in favor of it. Pending regulatory approval, the companies expect the transaction to be completed by the end of September 2008.

Credence's financial advisor on the transaction is Lehman Brothers Inc., Morrison & Foerster LLP is acting as Credence's legal counsel, and Corp-Growth provided M&A advice to Credence. LTX's financial advisor on the transaction is J.P.