**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 FIRSTBOSTON LLC

LEHMANBROTHERS INC.

c/o Credit Suisse FirstBoston LLC

Eleven Madison Avenue

New York, New York 10010-3629

 

Dear Sirs:

 

DuPont Photomasks, Inc.,Delaware corporation (the “**Company**”), proposes to issue and sell toCredit Suisse First Boston LLC and Lehman Brothers Inc. (collectively, the “**InitialPurchasers**”), upon the terms set forth in a purchase agreement ofeven date herewith (the “**Purchase Agreement**”), $105,000,000aggregate principal amount (plus up to an additional $20,000,000 principalamount) of its 1.25% ConvertibleSubordinated Notes due May 15, 2008 (the “**Initial Securities**”).  The Initial Securities will be convertibleinto shares of common stock, par value $.01 per share, of the Company (the “**Common  Stock**”) initially at theconversion price set forth in the Offering Circular dated April 29, 2003.  The Initial Securities will be issuedpursuant to an Indenture, dated as of May 5, 2003 (the “**Indenture**”), among theCompany and JP Morgan Chase Bank, a New York banking corporation, astrustee  (the “**Trustee**”).  As an inducement to the Initial Purchasersto enter into the Purchase Agreement, the Company agrees with the InitialPurchasers, for the benefit of (i) the Initial Purchasers and (ii) the holdersof the Initial Securities and the Common Stock issuable upon conversion of theInitial Securities (collectively, the “**Securities**”) from time to time until suchtime as such Securities have been sold pursuant to a Shelf RegistrationStatement (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 issuanceof the Initial Securities) file with the Securities and Exchange Commission(the “**Commission**”)and thereafter use its commercially reasonable efforts to cause to be declaredeffective as soon as practicable a registration statement on Form S-3 (the “**ShelfRegistration****Statement**”) relating to the offer and saleof the Transfer Restricted Securities (as defined in Section 5 hereof) by theHolders thereof from time to time in accordance with the methods of

 

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

 

(b)  The Company shall use its commerciallyreasonable efforts to keep the Shelf Registration Statement continuouslyeffective in order to permit the prospectus included therein (the “**Prospectus**”)to be lawfully delivered by the Holders of the relevant Securities, for aperiod that will terminate when all the Securities covered by the ShelfRegistration Statement (i) have been sold pursuant thereto or (ii) are nolonger restricted securities (as defined in Rule 144 under the SecuritiesAct, or any successor rule thereof), assuming for this purpose that theHolders thereof are not affiliates (as defined in Rule 144(a)(1) under theSecurities Act) of the Company (in any such case, such period being called the“**ShelfRegistration Period**”).  TheCompany shall be deemed not to have used its commercially reasonable efforts tokeep the Shelf Registration Statement effective during the requisite period ifit voluntarily takes any action that would result in Holders of Securitiescovered 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 theCompany in good faith and contemplated by Section 2(b)(v) below, and theCompany thereafter complies with the requirements of Section 2(h).

 

(c)  TheCompany may suspend the use of the Prospectus for a period not to exceed anaggregate of 45 days in any 90-day period or an aggregate of 90 days in anytwelve-month period if the Board of Directors of the Company, or the ChiefExecutive Officer or the Chief Financial Officer of the Company, shall havedetermined in good faith that because of valid business reasons (not includingavoidance of the Company’s obligations hereunder), including, withoutlimitations, the acquisition or divestiture of assets, pending corporatedevelopments, public filings with the Commission and similar events, it is inthe interest of the Company to suspend such use, and prior to suspending suchuse the Company provides written notice to the Initial Purchasers and theHolders of the Securities, which notice need not specify the nature of theevent giving rise to such suspension (such period during which the availabilityof the Shelf Registration Statement and related Prospectus is suspended being a“**Deferral****Period**”)

 

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

 

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

 

(a)  The Company shall (i) furnish to eachInitial Purchaser, prior to the filing thereof with the Commission, a copy ofthe Shelf Registration Statement and each amendment thereof and eachsupplement, if any, to the prospectus included therein and, in the event thatan Initial Purchaser (with respect to any portion of an unsold allotment fromthe 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 Purchaserreasonably may propose; and (ii) include the names of the Holders who havedelivered written notice to the Company in accordance with Section 2(m) of thisAgreement that they propose to sell Securities pursuant to the ShelfRegistration Statement as selling securityholders.

 

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

 

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

 

(ii)of any request by the Commission for amendments or supplements to the ShelfRegistration Statement or the prospectus included therein or for additionalinformation;

 

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

 

(iv)of the receipt by the Company or its legal counsel of any notification withrespect to the suspension of the qualification of the Securities for sale inany jurisdiction or the initiation or threatening of any proceeding for suchpurpose; and

 

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

 

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

 

(d)  The Company shall furnish to each Holder ofSecurities included within the coverage of the Shelf Registration, withoutcharge, at least one copy of the Shelf Registration Statement and any post-effectiveamendment thereto, including financial statements and schedules, and, if theHolder so requests in writing, all exhibits thereto (including those, if any,incorporated by reference).

 

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

 

(f)  Prior to any public offering of theSecurities pursuant to the Shelf Registration Statement, the Company shallregister or qualify or cooperate with the Holders of the Securities includedtherein and their respective counsel in connection with the registration orqualification 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 theSecurities reasonably requests in writing and do any and all other acts orthings necessary or advisable to enable the offer and sale in suchjurisdictions of the Securities covered by such Registration Statement; provided,however, that the Company shall not be required to (i) qualifygenerally to do business in any jurisdiction where it is not then so qualifiedor (ii) take any action which would subject it to general service ofprocess or to taxation in any jurisdiction where it is not then so subject.

 

(g)  The Company shall cooperate with the Holdersof the Securities to facilitate the timely preparation and delivery ofcertificates representing the Securities to be sold pursuant to anyRegistration Statement free of any restrictive legends and in suchdenominations and registered in such names as the

 

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Holders may request a reasonable period of time prior to sales of theSecurities pursuant to the Shelf Registration Statement; provided thatnothing herein will require the Company to prepare physical certificates forthe Initial Securities unless required by the Indenture.

 

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

 

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

 

(j)  The Company will comply with all rules andregulations of the Commission to the extent and so long as they are applicableto the Shelf Registration and will make generally available to its securityholders (or otherwise provide in accordance with Section 11(a) of theSecurities Act) an earnings statement satisfying the provisions ofSection 11(a) of the Securities Act, no later than 45 days after theend of a 12-month period (or 90 days, if such period is a fiscalyear) beginning with the first month of the Company’s first fiscal quartercommencing after the effective date of the Shelf Registration Statement, whichstatement shall cover such 12-month period.

 

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

 

(l)  Each Holder agrees, by acquisition of theSecurities, that such Holder shall not be entitled to sell any such Securitiespursuant to the Shelf Registration Statement or to receive a Prospectusrelating thereto unless such Holder has furnished the Company with a selling securityholderNotice and Questionnaire  substantiallyin the form of Appendix A hereto (the “**Notice and Questionnaire**”) as requiredpursuant to Section 2(m) hereof and the information required by the nextsentence.  The Company may require eachHolder of Securities to be sold pursuant to the Shelf Registration Statement tofurnish to the Company such information regarding the Holder and thedistribution of the Securities as the Company may from time to time reasonablyrequire for inclusion in the Shelf Registration Statement, and the Company mayexclude from such registration the Securities of any Holder that unreasonablyfails to furnish such information within a reasonable time after receiving suchrequest.

 

(m)  Each Holder agrees, by acquisition of the Securities,that if such Holder wishes to sell such Holder’s Securities pursuant to theShelf Registration Statement and related Prospectus, it will do so inaccordance with this Section 2(m).  EachHolder wishing to sell Securities pursuant to a Shelf Registration Statementand related Prospectus agrees to deliver a properly completed and signed Noticeand Questionnaire to the Company.  Uponreceipt of a properly completed Notice and Questionnaire from such Holder, theCompany shall use its commercially reasonable efforts to name such Holder as aselling securityholder in the Shelf Registration Statement in the initialfiling thereof, or if such Shelf Registration Statement has been filed, bymeans 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 Statementwithin five business days of receipt thereof. If the Commission shall not permit the Company to name such Holder as aselling securityholder in the Shelf Registration Statement by means of aprospectus supplement to the Shelf Registration Statement, the Company shalluse its commercially reasonable efforts to file a post-effective amendment toname such Holder as a selling securityholder, provided, however,that the Company shall have no obligation to pay Additional Interest to suchHolder for its failure to file a post-effective amendment.

 

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

 

(o)  The Company shall (i) make reasonablyavailable for inspection by any underwriter participating in any dispositionpursuant to the Shelf Registration Statement and any attorney, accountant orother agent retained by the Holders or any such underwriter, all relevantfinancial and other records, pertinent corporate documents and properties ofthe Company and (ii) cause the Company’s officers, directors, employees,accountants and auditors to supply all relevant information reasonablyrequested by any such underwriter, attorney, accountant or agent in connectionwith the Shelf Registration Statement, in each case, as shall be reasonablynecessary to enable such persons, to conduct a reasonable investigation withinthe meaning of Section 11 of the Securities Act; provided, however,that the foregoing inspection and information gathering shall be coordinated onbehalf of you and on behalf of the other parties, by one counsel designated byyou and by such other parties as described in Section 3 hereof.  The Company may request such personsreferred to above to execute a customary confidentiality agreement with respectto any information the Company reasonably believes to be proprietary orconfidential.

 

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

 

(q)  In the event that any broker-dealerregistered under the Exchange Act shall underwrite any Securities orparticipate 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 aHolder of such Securities or as an underwriter, a placement or sales agent or abroker or dealer in respect thereof, or otherwise, the Company will assist suchbroker-dealer in complying with the requirements of such Rules, including,without limitation, by (i) if such Rules, including Rule 2720, shallso require, engaging a “qualified independent underwriter” (as defined in Rule 2720)to participate in the preparation of the Shelf Registration Statement relatingto such Securities, to exercise usual standards of due diligence in respectthereto and, if any portion of the offering contemplated by such RegistrationStatement is an underwritten offering or is made through a placement or salesagent, to recommend the yield of such Securities, (ii) indemnifying anysuch qualified independent underwriter to the extent of the indemnification ofunderwriters provided in Section 5 hereof and (iii) providing suchinformation to such broker-dealer as may be required in order for suchbroker-dealer to comply with the requirements of the Rules.

 

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

 

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

 

(i)  all registration and filing fees andexpenses;

 

(ii) allfees and expenses of compliance with federal securities and state “blue sky” orsecurities laws;

 

(iii) allexpenses of printing (including printing certificates for the Securities to beissued and printing of Prospectuses), messenger and delivery services andtelephone;

 

(iv) allfees and disbursements of counsel for the Company;

 

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

 

(vi) allfees and disbursements of independent certified public accountants of theCompany (including the expenses of any special audit and comfort lettersrequired by or incident to such performance).

 

The Company will bear itsinternal expenses (including, without limitation, all salaries and expenses ofits officers and employees performing legal or accounting duties), the expensesof any annual audit and the fees and expenses of any person, including specialexperts, retained by the Company.

 

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

 

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

 

4.  *Indemnification*.  (a)  The Company agrees toindemnify and hold harmless each Holder and each person, if any, who controlssuch Holder within the meaning of the Securities Act or the Exchange Act (eachHolder, 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 theSecurities) to which each Indemnified Party may become subject under theSecurities Act, the Exchange Act or otherwise, insofar as such losses, claims,damages, liabilities or actions arise out of or are based upon any untruestatement or alleged untrue statement of a material fact contained in the ShelfRegistration Statement or prospectus including any document incorporated byreference therein, or in any amendment or supplement thereto or in anypreliminary prospectus relating to the Shelf Registration, or arise out of, orare based upon, the omission or alleged omission to state therein a materialfact 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, andshall reimburse, as incurred, the Indemnified Parties for any legal or otherexpenses reasonably incurred by them in connection with investigating ordefending any such loss, claim, damage, liability or action in respect thereof;provided, however, that (i) the Company shall not be liablein any such case to the extent that such loss, claim, damage or liabilityarises out of or is based upon any untrue statement or alleged untrue statementor omission or alleged omission made in the Shelf Registration

 

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Statement or prospectus or in any amendment or supplement thereto or inany preliminary prospectus relating to the Shelf Registration in reliance uponand in conformity with written information pertaining to such Holder andfurnished to the Company by or on behalf of such Holder specifically forinclusion therein and (ii) with respect to any untrue statement oromission or alleged untrue statement or omission made in any preliminaryprospectus relating to the Shelf Registration Statement, the indemnityagreement contained in this subsection (a) shall not inure to the benefitof any Holder from whom the person asserting any such losses, claims, damagesor liabilities purchased the Securities concerned, to the extent that aprospectus relating to such Securities was required to be delivered by suchHolder under the Securities Act in connection with such purchase and any suchloss, claim, damage or liability of such Holder results from the fact thatthere was not sent or given to such person, at or prior to the writtenconfirmation of the sale of such Securities to such person, a copy of the finalprospectus if the Company had previously furnished copies thereof to suchHolder; providedfurther, however, that this indemnityagreement will be in addition to any liability which the Company may otherwisehave to such Indemnified Party.  TheCompany shall also indemnify underwriters, their officers and directors andeach person who controls such underwriters within the meaning of the SecuritiesAct or the Exchange Act to the same extent as provided above with respect tothe indemnification of the Holders of the Securities if requested by suchHolders.

 

(b)  Each Holder, severally and not jointly, willindemnify and hold harmless the Company, its officers and directors and eachperson, if any, who controls the Company within the meaning of the SecuritiesAct or the Exchange Act from and against any losses, claims, damages orliabilities or any actions in respect thereof, to which the Company or any suchcontrolling person may become subject under the Securities Act, the ExchangeAct or otherwise, insofar as such losses, claims, damages, liabilities oractions arise out of or are based upon any untrue statement or alleged untruestatement of a material fact contained in the Shelf Registration Statement orprospectus or in any amendment or supplement thereto or in any preliminaryprospectus relating to the Shelf Registration, or arise out of or are basedupon the omission or alleged omission to state therein a material factnecessary to make the statements therein not misleading, in the light of thecircumstances in which they were made, but in each case only to the extent thatthe untrue statement or omission or alleged untrue statement or omission was madein reliance upon and in conformity with written information pertaining to suchHolder and furnished to the Company by or on behalf of such Holder specificallyfor inclusion therein; and, subject to the limitation set forth immediatelypreceding this clause, shall reimburse, as incurred, the Company for any legalor other expenses reasonably incurred by the Company or any such controllingperson 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 suchHolder may otherwise have to the Company or any of its controlling persons.

 

(c)  Promptly after receipt by an indemnifiedparty under this Section 4 of notice of the commencement of any action orproceeding (including a governmental investigation), such indemnified partywill, if a claim in respect thereof is to be made against the indemnifyingparty under this Section 4, notify the indemnifying party of thecommencement thereof; but the failure tonotify the indemnifying party shall not relieve it from any liability that itmay have under subsection (a) or (b) above except to the extent that it hasbeen materially prejudiced (through the forfeiture of substantive rights ordefenses) by such failure; and provided further that the failure to notify theindemnifying party shall not relieve it from any liability that it may have toan indemnified party otherwise thanunder subsection (a) or (b) above.  Incase any such action is brought against any indemnified party, and it notifiesthe indemnifying party of the commencement thereof, the indemnifying party willbe entitled to participate therein and, to the extent that it may wish, jointlywith any other indemnifying party similarly notified, to assume the defensethereof, with counsel reasonably satisfactory to such indemnified party (whoshall not, except with the consent of the indemnified party, be counsel to theindemnifying party), and after notice from the indemnifying party to suchindemnified party of its election so to assume the defense thereof theindemnifying party will not be liable to such indemnified party under thisSection 4 for any legal or other expenses, other than reasonable costs ofinvestigation, subsequently incurred by such indemnified party in connectionwith the defense thereof.  Noindemnifying party shall, without the prior written consent of the indemnifiedparty, effect any settlement of any pending or threatened action in respect ofwhich any indemnified party is or could have been a party and indemnity couldhave been sought hereunder by such indemnified party unless such settlement (i)includes an unconditional release of such indemnified party from all liabilityon any claims

 

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

 

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

 

(e)  The agreements contained in thisSection 4 shall survive the sale of the Securities pursuant to the ShelfRegistration Statement and shall remain in full force and effect, regardless ofany termination or cancellation of this Agreement or any investigation made byor 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 eventsoccur (each such event in clauses (i) through (v) below being hereincalled a “**RegistrationDefault**”):

 

(i)  the Shelf Registration Statement has notbeen filed with the Commission by the 90th day after the latest dateof original issuance of the Initial Securities;

 

(ii)  the Shelf Registration Statement has notbeen declared effective by the Commission by the 180th day after thelatest date of original issue of the Initial Securities;

 

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

 

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

 

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omit to state anymaterial fact necessary to make the statements therein in the light of thecircumstances under which they were made not misleading, or (y) it shallbe necessary to amend such Shelf Registration Statement or supplement therelated prospectus, to comply with the Securities Act or the Exchange Act orthe respective rules thereunder and (B) the Company does not cause the ShelfRegistration Statement to become effective within five business days after itceases to be effective or usable by a post-effective amendment or additionalShelf Registration Statement being filed and declared effective or a reportfiled 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 anyDeferral Period within the time provided in Section 1(c).

 

Each of the foregoingwill constitute a Registration Default whatever the reason for any such eventand whether it is voluntary or involuntary or is beyond the control of theCompany or pursuant to operation of law or as a result of any action orinaction by the Commission .

 

(b) Additional Interestshall accrue on the Initial Securities that are Transfer Restricted Securitiesover and above the interest set forth in the title of the Initial Securitiesfrom and including the date on which any such Registration Default shall occurto but excluding the earlier of (i) the date on which all such RegistrationDefaults have been cured and (ii) the day following the last day of the ShelfRegistration Period at a rate of 0.50% per annum (the “**Additional Interest Rate**”).  In the case of a registration defaultdescribed in Section 5(a)(iii), the Company’s obligation to pay additionalinterest extends only to the affected Initial Securities.  The Company shall have no other liabilitiesfor monetary damages with respect to its registration obligations.

 

(c)  Any amounts of Additional Interest duepursuant to Section 5(a) will be payable in cash on the regular interestpayment dates with respect to the Initial Securities.  The amount of Additional Interest will be determined by multiplyingthe applicable Additional Interest Rate by the principal amount of the InitialSecurities, further multiplied by a fraction, the numerator of which is thenumber of days such Additional Interest Rate was applicable during suchperiod (determined on the basis of a 360-day year comprised of twelve 30-daymonths), and the denominator of which is 360.

 

(d)  “**Transfer Restricted Securities**” means eachSecurity until (i) the date on which the offer and sale of such Securityhas been effectively registered under the Securities Act and such security hasbeen disposed of in accordance with the Shelf Registration Statement or(ii) the date on which such Security is sold to the public pursuant toRule 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 commerciallyreasonable efforts to file the reports required to be filed by it under theSecurities Act and the Exchange Act in a timely manner and, if at any time theCompany is not required to file such reports, it will, upon the request of anyHolder, make publicly available other information so long as necessary topermit sales of their securities pursuant to Rules 144 and 144A.  The Company covenants that it will take suchfurther action as any Holder may reasonably request, all to the extent requiredfrom time to time to enable such Holder to sell Transfer Restricted Securitieswithout registration under the Securities Act within the limitation of theexemptions provided by Rules 144 and 144A (including the requirements ofRule 144A(d)(4)).  The Company willprovide a copy of this Agreement to prospective purchasers of Securitiesidentified to the Company by the Initial Purchasers upon request.  Upon the request of any Holder, the Companyshall deliver to such Holder a written statement as to whether it has compliedwith such requirements.  Notwithstandingthe foregoing, nothing in this Section 6 shall be deemed to require theCompany to register any of its securities pursuant to the Exchange Act.

 

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

 

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holders of a majority in aggregate principal amount of such TransferRestricted Securities to be included in such offering (provided that holders ofCommon Stock issued upon conversion of the Initial Securities shall not bedeemed holders of Common Stock, but shall be deemed to be holders of theaggregate principal amount of Initial Securities from which such Common Stock wasconverted); provided that such Managing Underwriters must be reasonablysatisfactory to the Company and providedfurther, that theCompany shall not be required to arrange for or participate in more than oneunderwritten offering on behalf of the Holders pursuant to this Agreement.

 

No person may participatein any underwritten registration hereunder unless such person (i) agrees tosell such person’s Transfer Restricted Securities on the basis reasonablyprovided in any underwriting arrangements approved by the persons entitledhereunder to approve such arrangements and (ii) completes and executes allquestionnaires, powers of attorney, indemnities, underwriting agreements andother 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 tocomply with its obligations under Section 1 hereof may result in materialirreparable injury to the Initial Purchasers or the Holders for which there isno adequate remedy at law, that it will not be possible to measure damages forsuch injuries precisely and that, in the event of any such failure, the InitialPurchasers or any Holder may obtain such relief as may be required tospecifically enforce the Company’s obligations under Sections 1hereof.  The Company further agrees towaive the defense in any action for specific performance that a remedy at lawwould be adequate.

 

(b)  *No Inconsistent Agreements*.  The Company will not on or after the date ofthis Agreement enter into any agreement with respect to its securities that isinconsistent with the rights granted to the Holders in this Agreement orotherwise conflicts with the provisions hereof.  The rights granted to the Holders hereunder do not in any wayconflict with and are not inconsistent with the rights granted to the holdersof the Company’s securities under any agreement in effect on the date hereof.

 

(c)  *Amendments and Waivers*.  The provisions of this Agreement may not beamended, modified or supplemented, and waivers or consents to departures fromthe provisions hereof may not be given, except by the Company and the writtenconsent of the holders of a majority in principal amount of the Securitiesaffected by such amendment, modification, supplement, waiver or consents(provided that holders of Common Stock issued upon conversion of InitialSecurities shall not be deemed holders of Common Stock, but shall be deemed tobe holders of the aggregate principal amount of Initial Securities from whichsuch Common Stock was converted). Without the consent of the Holder of each Initial Security, however, nomodification may change the provisions relating to the payment of AdditionalInterest.  Each Holder of TransferRestricted Securities outstanding at the time of any such amendment,modification, supplement, waiver or consent or thereafter shall be bound by anysuch amendment, modification, supplement, waiver or consent effected pursuantto this Section 8, whether or not any notice, writing or marking indicatingsuch amendment, modification, supplement, waiver or consent appears on theTransfer Restricted Securities or is delivered to such Holder.  Each Holder may waive compliance withrespect to any obligation of the Company under this Agreement as it may applyor be enforced by such particular Holder.

 

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

 

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

 

(2)  if to the Initial Purchasers;

 

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Credit Suisse FirstBoston 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 asfollows:

 

DuPont Photomasks, Inc.

131 Old SettlersBoulevard

Round Rock, TX 78664

Attn:  General Counsel

 

All such notices andcommunications shall be deemed to have been duly given:  at the time delivered by hand, if personallydelivered; three business days after being deposited in the mail, postageprepaid, if mailed; when receipt is acknowledged by recipient’s facsimilemachine operator, if sent by facsimile transmission; and on the daydelivered, if sent by overnight air courier guaranteeing next daydelivery.

 

(e) *Third Party Beneficiaries.*  The Holders shall be third partybeneficiaries to the agreements made hereunder between the Company, on the onehand, and the Initial Purchasers, on the other hand, and shall have the rightto enforce such agreements directly to the extent they may deem suchenforcement necessary or advisable to protect their rights or the rights ofHolders hereunder.

 

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

 

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

 

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

 

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

 

By the execution anddelivery of this Agreement, the Company submits to the nonexclusivejurisdiction 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 theapplication thereof in any circumstance, is held invalid, illegal orunenforceable, the validity, legality and enforceability of any such provisionin every other respect and of the remaining provisions contained herein shallnot be affected or impaired thereby.

 

(k)  *Securities Held by the Company*.  Whenever the consent or approval of Holdersof a specified percentage of principal amount of Securities is requiredhereunder, Securities held by the Company or its

 

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

 

If the foregoing is inaccordance with your understanding of our agreement, please sign and return tothe Company a counterpart hereof, whereupon this instrument, along with allcounterparts, will become a binding agreement among the several InitialPurchasers 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 foregoingRegistrationRights Agreement is hereby confirmedand accepted as of the date firstabove 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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