EXHIBIT 10.1

 

DUPONT PHOTOMASKS, INC.

 

REGISTRATION RIGHTS AGREEMENT AMONG DUPONT PHOTOMASKS, INC., CREDIT SUISSE FIRST
BOSTON LLC AND LEHMAN BROTHERS INC. DATED AS OF MAY 5, 2003

 

 

$105,000,000

 

DUPONT PHOTOMASKS, INC.

 

1.25% Convertible Subordinated Notes due May 15, 2008

 

 

REGISTRATION RIGHTS AGREEMENT

 

May 5, 2003

 

 

CREDIT SUISSE FIRST BOSTON LLC

LEHMAN BROTHERS INC.

c/o Credit Suisse First Boston LLC

Eleven Madison Avenue

New York, New York 10010-3629

 

Dear Sirs:

 

DuPont Photomasks, Inc., Delaware corporation (the “Company”), proposes to issue
and sell to Credit Suisse First Boston LLC and Lehman Brothers Inc.
(collectively, the “Initial Purchasers”), upon the terms set forth in a purchase
agreement of even date herewith (the “Purchase Agreement”), $105,000,000
aggregate principal amount (plus up to an additional $20,000,000 principal
amount) of its 1.25% Convertible Subordinated Notes due May 15, 2008 (the
“Initial Securities”).  The Initial Securities will be convertible into shares
of common stock, par value $.01 per share, of the Company (the “Common  Stock”)
initially at the conversion price set forth in the Offering Circular dated April
29, 2003.  The Initial Securities will be issued pursuant to an Indenture, dated
as of May 5, 2003 (the “Indenture”), among the Company and JP Morgan Chase Bank,
a New York banking corporation, as trustee  (the “Trustee”).  As an inducement
to the Initial Purchasers to enter into the Purchase Agreement, the Company
agrees with the Initial Purchasers, for the benefit of (i) the Initial
Purchasers and (ii) the holders of the Initial Securities and the Common Stock
issuable upon conversion of the Initial Securities (collectively, the
“Securities”) from time to time until such time as such Securities have been
sold pursuant to a Shelf Registration Statement (as defined below) (each of the
forgoing a “Holder” and collectively the “Holders”), as follows:

 

1.  Shelf Registration.  (a)  The Company shall, at its cost, prepare and, as
promptly as practicable (but in no event more than 90 days after the latest date
of original issuance of the Initial Securities) file with the Securities and
Exchange Commission (the “Commission”) and thereafter use its commercially
reasonable efforts to cause to be declared effective as soon as practicable a
registration statement on Form S-3 (the “Shelf Registration Statement”) relating
to the offer and sale of the Transfer Restricted Securities (as defined in
Section 5 hereof) by the Holders thereof from time to time in accordance with
the methods of

 

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distribution set forth in the Shelf Registration Statement and Rule 415 under
the Securities Act of 1933, as amended (the “Securities Act”) (hereinafter, the
“Shelf Registration”); provided, however, that no Holder (other than an Initial
Purchaser) shall be entitled to have the Securities held by it covered by such
Shelf Registration Statement unless such Holder agrees in writing to be bound by
all the provisions of this Agreement applicable to such Holder.

 

(b)  The Company shall use its commercially reasonable efforts to keep the Shelf
Registration Statement continuously effective in order to permit the prospectus
included therein (the “Prospectus”) to be lawfully delivered by the Holders of
the relevant Securities, for a period that will terminate when all the
Securities covered by the Shelf Registration Statement (i) have been sold
pursuant thereto or (ii) are no longer restricted securities (as defined in
Rule 144 under the Securities Act, or any successor rule thereof), assuming for
this purpose that the Holders thereof are not affiliates (as defined in Rule
144(a)(1) under the Securities Act) of the Company (in any such case, such
period being called the “Shelf Registration Period”).  The Company shall be
deemed not to have used its commercially reasonable efforts to keep the Shelf
Registration Statement effective during the requisite period if it voluntarily
takes any action that would result in Holders of Securities covered thereby not
being able to offer and sell such Securities during that period, unless such
action is (i) required by applicable law or (ii) taken by the Company in good
faith and contemplated by Section 2(b)(v) below, and the Company thereafter
complies with the requirements of Section 2(h).

 

(c)  The Company may suspend the use of the Prospectus for a period not to
exceed an aggregate of 45 days in any 90-day period or an aggregate of 90 days
in any twelve-month period if the Board of Directors of the Company, or the
Chief Executive Officer or the Chief Financial Officer of the Company, shall
have determined in good faith that because of valid business reasons (not
including avoidance of the Company’s obligations hereunder), including, without
limitations, the acquisition or divestiture of assets, pending corporate
developments, public filings with the Commission and similar events, it is in
the interest of the Company to suspend such use, and prior to suspending such
use the Company provides written notice to the Initial Purchasers and the
Holders of the Securities, which notice need not specify the nature of the event
giving rise to such suspension (such period during which the availability of the
Shelf Registration Statement and related Prospectus is suspended being a
“Deferral Period”)

 

(d)  Notwithstanding any other provisions of this Agreement to the contrary, the
Company shall cause the Shelf Registration Statement and the Prospectus and any
amendment or supplement thereto, as of the effective date of the Shelf
Registration Statement, amendment or supplement, (i) to comply in all material
respects with the applicable requirements of the Securities Act and the rules
and regulations of the Commission and (ii) not to contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.

 

2.  Registration Procedures.  In connection with the Shelf Registration
contemplated by  Section 1 hereof, the following provisions shall apply:

 

(a)  The Company shall (i) furnish to each Initial Purchaser, prior to the
filing thereof with the Commission, a copy of the Shelf Registration Statement
and each amendment thereof and each supplement, if any, to the prospectus
included therein and, in the event that an Initial Purchaser (with respect to
any portion of an unsold allotment from the original offering) is participating
in the Shelf Registration Statement, shall use its commercially reasonable
efforts to reflect in each such document, when so filed with the Commission,
such comments as such Initial Purchaser reasonably may propose; and (ii) include
the names of the Holders who have delivered written notice to the Company in
accordance with Section 2(m) of this Agreement that they propose to sell
Securities pursuant to the Shelf Registration Statement as selling
securityholders.

 

(b)  The Company shall give written notice to the Initial Purchasers and the
Holders of the Securities (which notice pursuant to clauses (ii)-(v) hereof
shall be accompanied by an instruction to suspend the use of the Prospectus
until the requisite changes have been made, if applicable):

 

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(i) when the Shelf Registration Statement or any amendment thereto has been
filed with the Commission and when the Shelf Registration Statement or any
post-effective amendment thereto has become effective;

 

(ii) of any request by the Commission for amendments or supplements to the Shelf
Registration Statement or the prospectus included therein or for additional
information;

 

(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Shelf Registration Statement or the initiation of any
proceedings for that purpose;

 

(iv) of the receipt by the Company or its legal counsel of any notification with
respect to the suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; and

 

(v) of the happening of any event that requires the Company to make changes in
the Shelf Registration Statement or the Prospectus in order that the Shelf
Registration Statement or the Prospectus  does not contain an untrue statement
of a material fact nor omit to state a material fact required to be stated
therein or necessary to make the statements therein (in the case of the
Prospectus, in the light of the circumstances under which they were made) not
misleading, which written notice need not provide any detail as to the nature of
such event; provided, that such notice need only be provided to the Initial
Purchasers and to Holders who are named as selling stockholders in the
prospectus relating to the Shelf Registration Statement, as then amended or
supplemented.

 

(c)  The Company shall make every commercially reasonable effort to obtain the
withdrawal at the earliest possible time of any order suspending the
effectiveness of the Shelf Registration Statement.

 

(d)  The Company shall furnish to each Holder of Securities included within the
coverage of the Shelf Registration, without charge, at least one copy of the
Shelf Registration Statement and any post-effective amendment thereto, including
financial statements and schedules, and, if the Holder so requests in writing,
all exhibits thereto (including those, if any, incorporated by reference).

 

(e)  The Company shall, during the Shelf Registration Period, deliver to each
Holder of Securities included within the coverage of the Shelf Registration,
without charge, as many copies of the Prospectus (including each preliminary
prospectus) included in the Shelf Registration Statement and any amendment or
supplement thereto as such person may reasonably request.  The Company consents,
subject to the provisions of this Agreement, to the use of the Prospectus or any
amendment or supplement thereto by each of the selling Holders of the Securities
in connection with the offering and sale of the Securities covered by the
Prospectus, or any amendment or supplement thereto, included in the Shelf
Registration Statement.

 

(f)  Prior to any public offering of the Securities pursuant to the Shelf
Registration Statement, the Company shall register or qualify or cooperate with
the Holders of the Securities included therein and their respective counsel in
connection with the registration or qualification of the Securities for offer
and sale under the securities or “blue sky” laws of such states of the United
States as any Holder of the Securities reasonably requests in writing and do any
and all other acts or things necessary or advisable to enable the offer and sale
in such jurisdictions of the Securities covered by such Registration Statement;
provided, however, that the Company shall not be required to (i) qualify
generally to do business in any jurisdiction where it is not then so qualified
or (ii) take any action which would subject it to general service of process or
to taxation in any jurisdiction where it is not then so subject.

 

(g)  The Company shall cooperate with the Holders of the Securities to
facilitate the timely preparation and delivery of certificates representing the
Securities to be sold pursuant to any Registration Statement free of any
restrictive legends and in such denominations and registered in such names as
the

 

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Holders may request a reasonable period of time prior to sales of the Securities
pursuant to the Shelf Registration Statement; provided that nothing herein will
require the Company to prepare physical certificates for the Initial Securities
unless required by the Indenture.

 

(h)  Upon the occurrence of any event contemplated by paragraphs (ii) through
(v) of Section 2(b) above during the period for which the Company is required to
maintain an effective Shelf Registration Statement, the Company shall promptly
prepare and file a post-effective amendment to the Shelf Registration Statement
or an amendment or supplement to the Prospectus and any other required document
so that, as thereafter delivered to Holders or purchasers of the Securities, the
Prospectus will not contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.  If the Company notifies the Initial Purchasers and the
Holders in accordance with paragraphs (ii) through (v) of Section 2(b) above to
suspend the use of the Prospectus  until the requisite changes to the Prospectus
have been made or the Company otherwise notifies the Initial Purchasers and the
Holders of its election to suspend the availability of the Shelf Registration
and the Prospectus pursuant to Section 1(c) above, then the Initial Purchasers
and the Holders shall suspend use of such Prospectus.

 

(i)  Not later than the effective date of the Shelf Registration Statement, the
Company will provide CUSIP numbers for the Initial Securities and the Common
Stock registered under the Shelf Registration Statement, and provide the Trustee
with one or more printed certificates for the Initial Securities, in a form
eligible for deposit with The Depository Trust Company.

 

(j)  The Company will comply with all rules and regulations of the Commission to
the extent and so long as they are applicable to the Shelf Registration and will
make generally available to its security holders (or otherwise provide in
accordance with Section 11(a) of the Securities Act) an earnings statement
satisfying the provisions of Section 11(a) of the Securities Act, no later than
45 days after the end of a 12-month period (or 90 days, if such period is a
fiscal year) beginning with the first month of the Company’s first fiscal
quarter commencing after the effective date of the Shelf Registration Statement,
which statement shall cover such 12-month period.

 

(k)  The Company shall cause the Indenture to be qualified under the Trust
Indenture Act of 1939, as amended, (the “Trust Indenture Act”) in a timely
manner and containing such changes, if any, as shall be necessary for such
qualification.  In the event that such qualification would require the
appointment of a new trustee under the Indenture, the Company shall appoint a
new trustee thereunder pursuant to the applicable provisions of the Indenture.

 

(l)  Each Holder agrees, by acquisition of the Securities, that such Holder
shall not be entitled to sell any such Securities pursuant to the Shelf
Registration Statement or to receive a Prospectus relating thereto unless such
Holder has furnished the Company with a selling securityholder Notice and
Questionnaire  substantially in the form of Appendix A hereto (the “Notice and
Questionnaire”) as required pursuant to Section 2(m) hereof and the information
required by the next sentence.  The Company may require each Holder of
Securities to be sold pursuant to the Shelf Registration Statement to furnish to
the Company such information regarding the Holder and the distribution of the
Securities as the Company may from time to time reasonably require for inclusion
in the Shelf Registration Statement, and the Company may exclude from such
registration the Securities of any Holder that unreasonably fails to furnish
such information within a reasonable time after receiving such request.

 

(m)  Each Holder agrees, by acquisition of the Securities, that if such Holder
wishes to sell such Holder’s Securities pursuant to the Shelf Registration
Statement and related Prospectus, it will do so in accordance with this Section
2(m).  Each Holder wishing to sell Securities pursuant to a Shelf Registration
Statement and related Prospectus agrees to deliver a properly completed and
signed Notice and Questionnaire to the Company.  Upon receipt of a properly
completed Notice and Questionnaire from such Holder, the Company shall use its
commercially reasonable efforts to name such Holder as a selling securityholder
in the Shelf Registration Statement in the initial filing thereof, or if such
Shelf Registration Statement has been filed, by means of a pre-effective
amendment or, if permitted by the Commission, by

 

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means of a prospectus supplement to the Shelf Registration Statement within five
business days of receipt thereof.  If the Commission shall not permit the
Company to name such Holder as a selling securityholder in the Shelf
Registration Statement by means of a prospectus supplement to the Shelf
Registration Statement, the Company shall use its commercially reasonable
efforts to file a post-effective amendment to name such Holder as a selling
securityholder, provided, however, that the Company shall have no obligation to
pay Additional Interest to such Holder for its failure to file a post-effective
amendment.

 

(n)  The Company shall enter into such customary agreements (including, if
requested, an underwriting agreement in customary form) and take all such other
actions, if any, as any Holder shall reasonably request in order to facilitate
the disposition of the Securities pursuant to the Shelf Registration.

 

(o)  The Company shall (i) make reasonably available for inspection by any
underwriter participating in any disposition pursuant to the Shelf Registration
Statement and any attorney, accountant or other agent retained by the Holders or
any such underwriter, all relevant financial and other records, pertinent
corporate documents and properties of the Company and (ii) cause the Company’s
officers, directors, employees, accountants and auditors to supply all relevant
information reasonably requested by any such underwriter, attorney, accountant
or agent in connection with the Shelf Registration Statement, in each case, as
shall be reasonably necessary to enable such persons, to conduct a reasonable
investigation within the meaning of Section 11 of the Securities Act; provided,
however, that the foregoing inspection and information gathering shall be
coordinated on behalf of you and on behalf of the other parties, by one counsel
designated by you and by such other parties as described in Section 3 hereof. 
The Company may request such persons referred to above to execute a customary
confidentiality agreement with respect to any information the Company reasonably
believes to be proprietary or confidential.

 

(p)  The Company, if requested by any Holder of Securities covered by the Shelf
Registration Statement, shall cause (i) its counsel to deliver an opinion and
updates thereof relating to the Securities in customary form addressed to such
Holders and the managing underwriters, if any, thereof, and dated, in the case
of the initial opinion, the effective date of such Shelf Registration Statement;
(ii) its officers to execute and deliver all customary documents and
certificates and updates thereof reasonably requested by any underwriters of the
Securities and (iii) its independent public accountants and the independent
public accountants with respect to any other entity for which financial
information is provided in the Shelf Registration Statement to provide to the
selling Holders of the applicable Securities and any underwriter therefor a
comfort letter in customary form and covering matters of the type customarily
covered in comfort letters in connection with primary underwritten offerings,
subject to receipt of appropriate documentation as contemplated, and only if
permitted, by Statement of Auditing Standards No. 72.

 

(q)  In the event that any broker-dealer registered under the Exchange Act shall
underwrite any Securities or participate as a member of an underwriting
syndicate or selling group or “assist in the distribution” (within the meaning
of the Conduct Rules (the “Rules”) of the National Association of Securities
Dealers, Inc. (“NASD”)) thereof, whether as a Holder of such Securities or as an
underwriter, a placement or sales agent or a broker or dealer in respect
thereof, or otherwise, the Company will assist such broker-dealer in complying
with the requirements of such Rules, including, without limitation, by (i) if
such Rules, including Rule 2720, shall so require, engaging a “qualified
independent underwriter” (as defined in Rule 2720) to participate in the
preparation of the Shelf Registration Statement relating to such Securities, to
exercise usual standards of due diligence in respect thereto and, if any portion
of the offering contemplated by such Registration Statement is an underwritten
offering or is made through a placement or sales agent, to recommend the yield
of such Securities, (ii) indemnifying any such qualified independent underwriter
to the extent of the indemnification of underwriters provided in Section 5
hereof and (iii) providing such information to such broker-dealer as may be
required in order for such broker-dealer to comply with the requirements of the
Rules.

 

(r)  The Company shall use its commercially reasonable efforts to take all other
steps necessary to effect the registration of the Securities covered by a
Registration Statement contemplated hereby.

 

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3.  Registration Expenses.  (a) All expenses incident to the Company’s
performance of and compliance with this Agreement will be borne by the Company,
regardless of whether a Registration Statement is ever filed or becomes
effective, including without limitation;

 

(i)  all registration and filing fees and expenses;

 

(ii) all fees and expenses of compliance with federal securities and state “blue
sky” or securities laws;

 

(iii) all expenses of printing (including printing certificates for the
Securities to be issued and printing of Prospectuses), messenger and delivery
services and telephone;

 

(iv) all fees and disbursements of counsel for the Company;

 

 (v) all application and filing fees in connection with listing the Securities
on a national securities exchange or automated quotation system pursuant to the
requirements hereof; and

 

(vi) all fees and disbursements of independent certified public accountants of
the Company (including the expenses of any special audit and comfort letters
required by or incident to such performance).

 

The Company will bear its internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expenses of any annual audit and the fees and expenses
of any person, including special experts, retained by the Company.

 

(b)  In connection with the Shelf Registration Statement required by this
Agreement, the Company will reimburse the Initial Purchasers and the Holders of
Securities covered by the Shelf Registration Statement, for the reasonable fees
and disbursements of not more than one counsel, designated by the Holders of a
majority in principal amount of the Securities covered by the Shelf Registration
Statement (provided that Holders of Common Stock issued upon the conversion of
the Initial Securities shall be deemed to be Holders of the aggregate principal
amount of Initial Securities from which such Common Stock was converted) to act
as counsel for the Holders in connection therewith.

 

(c)  In connection with any underwritten offering of any Transfer Restricted
Securities covered by a Shelf Registration Statement, the participating Holders
shall be responsible for the payment of any and all underwriters and brokers and
dealers discounts and commissions in proportion to the number of Securities sold
by such Holders.

 

4.  Indemnification.  (a)  The Company agrees to indemnify and hold harmless
each Holder and each person, if any, who controls such Holder within the meaning
of the Securities Act or the Exchange Act (each Holder, and such controlling
persons are referred to collectively as the “Indemnified Parties”) from and
against any losses, claims, damages or liabilities, joint or several, or any
actions in respect thereof (including, but not limited to, any losses, claims,
damages, liabilities or actions relating to purchases and sales of the
Securities) to which each Indemnified Party may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages, liabilities or actions arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the Shelf
Registration Statement or prospectus including any document incorporated by
reference therein, or in any amendment or supplement thereto or in any
preliminary prospectus relating to the Shelf Registration, or arise out of, or
are based upon, the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances in which they were made, not misleading, and
shall reimburse, as incurred, the Indemnified Parties for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action in respect thereof;
provided, however, that (i) the Company shall not be liable in any such case to
the extent that such loss, claim, damage or liability arises out of or is based
upon any untrue statement or alleged untrue statement or omission or alleged
omission made in the Shelf Registration

 

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Statement or prospectus or in any amendment or supplement thereto or in any
preliminary prospectus relating to the Shelf Registration in reliance upon and
in conformity with written information pertaining to such Holder and furnished
to the Company by or on behalf of such Holder specifically for inclusion therein
and (ii) with respect to any untrue statement or omission or alleged untrue
statement or omission made in any preliminary prospectus relating to the Shelf
Registration Statement, the indemnity agreement contained in this subsection (a)
shall not inure to the benefit of any Holder from whom the person asserting any
such losses, claims, damages or liabilities purchased the Securities concerned,
to the extent that a prospectus relating to such Securities was required to be
delivered by such Holder under the Securities Act in connection with such
purchase and any such loss, claim, damage or liability of such Holder results
from the fact that there was not sent or given to such person, at or prior to
the written confirmation of the sale of such Securities to such person, a copy
of the final prospectus if the Company had previously furnished copies thereof
to such Holder; provided further, however, that this indemnity agreement will be
in addition to any liability which the Company may otherwise have to such
Indemnified Party.  The Company shall also indemnify underwriters, their
officers and directors and each person who controls such underwriters within the
meaning of the Securities Act or the Exchange Act to the same extent as provided
above with respect to the indemnification of the Holders of the Securities if
requested by such Holders.

 

(b)  Each Holder, severally and not jointly, will indemnify and hold harmless
the Company, its officers and directors and each person, if any, who controls
the Company within the meaning of the Securities Act or the Exchange Act from
and against any losses, claims, damages or liabilities or any actions in respect
thereof, to which the Company or any such controlling person may become subject
under the Securities Act, the Exchange Act or otherwise, insofar as such losses,
claims, damages, liabilities or actions arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Shelf Registration Statement or prospectus or in any amendment or supplement
thereto or in any preliminary prospectus relating to the Shelf Registration, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact necessary to make the statements therein not misleading, in the
light of the circumstances in which they were made, but in each case only to the
extent that the untrue statement or omission or alleged untrue statement or
omission was made in reliance upon and in conformity with written information
pertaining to such Holder and furnished to the Company by or on behalf of such
Holder specifically for inclusion therein; and, subject to the limitation set
forth immediately preceding this clause, shall reimburse, as incurred, the
Company for any legal or other expenses reasonably incurred by the Company or
any such controlling person in connection with investigating or defending any
loss, claim, damage, liability or action in respect thereof.  This indemnity
agreement will be in addition to any liability which such Holder may otherwise
have to the Company or any of its controlling persons.

 

(c)  Promptly after receipt by an indemnified party under this Section 4 of
notice of the commencement of any action or proceeding (including a governmental
investigation), such indemnified party will, if a claim in respect thereof is to
be made against the indemnifying party under this Section 4, notify the
indemnifying party of the commencement thereof; but the failure to notify the
indemnifying party shall not relieve it from any liability that it may have
under subsection (a) or (b) above except to the extent that it has been
materially prejudiced (through the forfeiture of substantive rights or defenses)
by such failure; and provided further that the failure to notify the
indemnifying party shall not relieve it from any liability that it may have to
an indemnified party otherwise than under subsection (a) or (b) above.  In case
any such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof the
indemnifying party will not be liable to such indemnified party under this
Section 4 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in connection
with the defense thereof.  No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened action in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party unless such settlement (i) includes an unconditional release of such
indemnified party from all liability on any claims

 

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that are the subject matter of such action, and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act by or
on behalf of any indemnified party.

 

(d)  If the indemnification provided for in this Section 4 is unavailable or
insufficient to hold harmless an indemnified party under subsections (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to in subsection (a) or (b)
above in such proportion as is appropriate to reflect the relative fault of the
indemnifying party or parties on the one hand and the indemnified party on the
other in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities (or actions in respect thereof) as well
as any other relevant equitable considerations.  The relative fault of the
parties shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
on the one hand or such Holder or such other indemnified party, as the case may
be, on the other, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission. 
The amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities referred to in the first sentence of this subsection (d)
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any action
or claim which is the subject of this subsection (d).  Notwithstanding any other
provision of this Section 4(d), the Holders shall not be required to contribute
any amount in excess of the amount by which the net proceeds received by such
Holders from the sale of the Securities pursuant to the Shelf Registration
Statement exceeds the amount of damages which such Holders have otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission.  No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.  For purposes of this paragraph (d), each person, if any, who
controls such indemnified party within the meaning of the Securities Act or the
Exchange Act shall have the same rights to contribution as such indemnified
party and each person, if any, who controls the Company within the meaning of
the Securities Act or the Exchange Act shall have the same rights to
contribution as the Company.

 

(e)  The agreements contained in this Section 4 shall survive the sale of the
Securities pursuant to the Shelf Registration Statement and shall remain in full
force and effect, regardless of any termination or cancellation of this
Agreement or any investigation made by or on behalf of any indemnified party.

 

5.  Additional Interest Under Certain Circumstances.  (a)  Additional interest
(the “Additional Interest”) with respect to the Initial Securities that are
Transfer Restricted Securities (as defined below) shall be assessed as follows
if any of the following events occur (each such event in clauses (i) through (v)
below being herein called a “Registration Default”):

 

(i)  the Shelf Registration Statement has not been filed with the Commission by
the 90th day after the latest date of original issuance of the Initial
Securities;

 

(ii)  the Shelf Registration Statement has not been declared effective by the
Commission by the 180th day after the latest date of original issue of the
Initial Securities;

 

(iii) the Company fails to supplement the Shelf Registration Statement within
the time period set forth in Section 2(m) to name a Holder as a selling
securityholder therein as contemplated by Section 2(m);

 

(iv)  the Shelf Registration Statement is declared effective by the Commission
but, prior to the end of the Registration Period, (A)(1) the Shelf Registration
Statement thereafter ceases to be effective or (2) the Shelf Registration
Statement or the Prospectus ceases to be usable in connection with resales of
Transfer Restricted Securities (as defined below) during the periods specified
herein because either (x) any event occurs as a result of which the Prospectus
forming part of such Shelf Registration Statement would include any untrue
statement of a material fact or

 

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omit to state any material fact necessary to make the statements therein in the
light of the circumstances under which they were made not misleading, or (y) it
shall be necessary to amend such Shelf Registration Statement or supplement the
related prospectus, to comply with the Securities Act or the Exchange Act or the
respective rules thereunder and (B) the Company does not cause the Shelf
Registration Statement to become effective within five business days after it
ceases to be effective or usable by a post-effective amendment or additional
Shelf Registration Statement being filed and declared effective or a report
filed pursuant to the Exchange Act; or

 

(v) the Shelf Registration Statement is declared effective by the Commission
but, prior to the end of the Registration Period, the Company does not terminate
any Deferral Period within the time provided in Section 1(c).

 

Each of the foregoing will constitute a Registration Default whatever the reason
for any such event and whether it is voluntary or involuntary or is beyond the
control of the Company or pursuant to operation of law or as a result of any
action or inaction by the Commission .

 

(b) Additional Interest shall accrue on the Initial Securities that are Transfer
Restricted Securities over and above the interest set forth in the title of the
Initial Securities from and including the date on which any such Registration
Default shall occur to but excluding the earlier of (i) the date on which all
such Registration Defaults have been cured and (ii) the day following the last
day of the Shelf Registration Period at a rate of 0.50% per annum (the
“Additional Interest Rate”).  In the case of a registration default described in
Section 5(a)(iii), the Company’s obligation to pay additional interest extends
only to the affected Initial Securities.  The Company shall have no other
liabilities for monetary damages with respect to its registration obligations.

 

(c)  Any amounts of Additional Interest due pursuant to Section 5(a) will be
payable in cash on the regular interest payment dates with respect to the
Initial Securities.  The amount of Additional Interest will be determined by
multiplying the applicable Additional Interest Rate by the principal amount of
the Initial Securities, further multiplied by a fraction, the numerator of which
is the number of days such Additional Interest Rate was applicable during such
period (determined on the basis of a 360-day year comprised of twelve 30-day
months), and the denominator of which is 360.

 

(d)  “Transfer Restricted Securities” means each Security until (i) the date on
which the offer and sale of such Security has been effectively registered under
the Securities Act and such security has been disposed of in accordance with the
Shelf Registration Statement or (ii) the date on which such Security is sold to
the public pursuant to Rule 144 under the Securities Act or is saleable pursuant
to Rule 144(k) under the Securities Act.

 

6.  Rules 144 and 144A.  The Company shall use its commercially reasonable
efforts to file the reports required to be filed by it under the Securities Act
and the Exchange Act in a timely manner and, if at any time the Company is not
required to file such reports, it will, upon the request of any Holder, make
publicly available other information so long as necessary to permit sales of
their securities pursuant to Rules 144 and 144A.  The Company covenants that it
will take such further action as any Holder may reasonably request, all to the
extent required from time to time to enable such Holder to sell Transfer
Restricted Securities without registration under the Securities Act within the
limitation of the exemptions provided by Rules 144 and 144A (including the
requirements of Rule 144A(d)(4)).  The Company will provide a copy of this
Agreement to prospective purchasers of Securities identified to the Company by
the Initial Purchasers upon request.  Upon the request of any Holder, the
Company shall deliver to such Holder a written statement as to whether it has
complied with such requirements.  Notwithstanding the foregoing, nothing in this
Section 6 shall be deemed to require the Company to register any of its
securities pursuant to the Exchange Act.

 

7.  Underwritten Registrations.  If any of the Transfer Restricted Securities
covered by the Shelf Registration are to be sold in an underwritten offering,
the investment banker or investment bankers and manager or managers that will
administer the offering (“Managing Underwriters”) will be selected by the

 

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holders of a majority in aggregate principal amount of such Transfer Restricted
Securities to be included in such offering (provided that holders of Common
Stock issued upon conversion of the Initial Securities shall not be deemed
holders of Common Stock, but shall be deemed to be holders of the aggregate
principal amount of Initial Securities from which such Common Stock was
converted); provided that such Managing Underwriters must be reasonably
satisfactory to the Company and provided further, that the Company shall not be
required to arrange for or participate in more than one underwritten offering on
behalf of the Holders pursuant to this Agreement.

 

No person may participate in any underwritten registration hereunder unless such
person (i) agrees to sell such person’s Transfer Restricted Securities on the
basis reasonably provided in any underwriting arrangements approved by the
persons entitled hereunder to approve such arrangements and (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements.

 

8.  Miscellaneous.

 

(a)  Remedies.  The Company acknowledges and agrees that any failure by the
Company to comply with its obligations under Section 1 hereof may result in
material irreparable injury to the Initial Purchasers or the Holders for which
there is no adequate remedy at law, that it will not be possible to measure
damages for such injuries precisely and that, in the event of any such failure,
the Initial Purchasers or any Holder may obtain such relief as may be required
to specifically enforce the Company’s obligations under Sections 1 hereof.  The
Company further agrees to waive the defense in any action for specific
performance that a remedy at law would be adequate.

 

(b)  No Inconsistent Agreements.  The Company will not on or after the date of
this Agreement enter into any agreement with respect to its securities that is
inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof.  The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with
the rights granted to the holders of the Company’s securities under any
agreement in effect on the date hereof.

 

(c)  Amendments and Waivers.  The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, except by the Company and the written
consent of the holders of a majority in principal amount of the Securities
affected by such amendment, modification, supplement, waiver or consents
(provided that holders of Common Stock issued upon conversion of Initial
Securities shall not be deemed holders of Common Stock, but shall be deemed to
be holders of the aggregate principal amount of Initial Securities from which
such Common Stock was converted).  Without the consent of the Holder of each
Initial Security, however, no modification may change the provisions relating to
the payment of Additional Interest.  Each Holder of Transfer Restricted
Securities outstanding at the time of any such amendment, modification,
supplement, waiver or consent or thereafter shall be bound by any such
amendment, modification, supplement, waiver or consent effected pursuant to this
Section 8, whether or not any notice, writing or marking indicating such
amendment, modification, supplement, waiver or consent appears on the Transfer
Restricted Securities or is delivered to such Holder.  Each Holder may waive
compliance with respect to any obligation of the Company under this Agreement as
it may apply or be enforced by such particular Holder.

 

(d)  Notices.  All notices and other communications provided for or permitted
hereunder shall be made in writing by hand delivery, first-class mail, facsimile
transmission, or air courier which guarantees overnight delivery:

 

(1)  if to a Holder of the Securities, at the most current address given by such
Holder to the Company.

 

(2)  if to the Initial Purchasers;

 

10

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Credit Suisse First Boston LLC

Eleven Madison Avenue

New York, NY 10010-3629

Fax No.:  (212) 325-8278

Attention:  Transactions Advisory Group

 

with a copy to:

 

Davis Polk & Wardwell

1600 El Camino Real

Menlo Park, CA 94025

Attn:  Alan Denenberg

 

(3)           if to the Company, at its address as follows:

 

DuPont Photomasks, Inc.

131 Old Settlers Boulevard

Round Rock, TX 78664

Attn:  General Counsel

 

All such notices and communications shall be deemed to have been duly given:  at
the time delivered by hand, if personally delivered; three business days after
being deposited in the mail, postage prepaid, if mailed; when receipt is
acknowledged by recipient’s facsimile machine operator, if sent by facsimile
transmission; and on the day delivered, if sent by overnight air courier
guaranteeing next day delivery.

 

(e) Third Party Beneficiaries.  The Holders shall be third party beneficiaries
to the agreements made hereunder between the Company, on the one hand, and the
Initial Purchasers, on the other hand, and shall have the right to enforce such
agreements directly to the extent they may deem such enforcement necessary or
advisable to protect their rights or the rights of Holders hereunder.

 

(f)  Successors and Assigns.  This Agreement shall be binding upon the Company
and its successors and assigns.

 

(g)  Counterparts.  This Agreement may be executed in any number of counterparts
and by the parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.

 

(h)  Headings.  The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.

 

(i)  Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS.

 

By the execution and delivery of this Agreement, the Company submits to the
nonexclusive jurisdiction of any federal or state court in the State of New
York.

 

(j)  Severability.  If any one or more of the provisions contained herein, or
the application thereof in any circumstance, is held invalid, illegal or
unenforceable, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions contained herein shall
not be affected or impaired thereby.

 

(k)  Securities Held by the Company.  Whenever the consent or approval of
Holders of a specified percentage of principal amount of Securities is required
hereunder, Securities held by the Company or its

 

11

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affiliates (other than subsequent Holders of Securities if such subsequent
Holders are deemed to be affiliates solely by reason of their holdings of such
Securities) shall not be counted in determining whether such consent or approval
was given by the Holders of such required percentage.

 

If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the several Initial Purchasers and the Company in accordance with its terms.

 

 

Very truly yours,

 

 

 

DuPont Photomasks, Inc.

 

 

 

by

 

 

 

/s/  James W. Boeckman

 

 

Name: James W. Boeckman

 

 

Title: Executive Vice President and General
Counsel

 

The foregoing Registration
Rights Agreement is hereby confirmed
and accepted as of the date first
above written.

 

CREDIT SUISSE FIRST BOSTON LLC

LEHMAN BROTHERS INC.

 

By:  CREDIT SUISSE FIRST BOSTON LLC

 

by

 

 

/s/  John C. Hodge

 

 

Name:  John C. Hodge

 

Title:  Managing Director

 

 

By:  LEHMAN BROTHERS INC.

 

 

by

 

 

/s/  Jon L. Krahulik

 

 

Name:  Jon L. Krahulik

 

Title:  Vice President

 

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