Exhibit 10.37 

CONFIRMATION OF GUARANTY

and

AMENDMENT NO. 3

Dated as of December 12, 2008

to 

AMENDED AND RESTATED GUARANTEE AGREEMENT


Dated as of August 23, 2007 

          THIS CONFIRMATION OF GUARANTY and AMENDMENT NO. 3 (the
Confirmation and Amendment) is made as of December 12, 2008 by and between Photronics, Inc. (the
Guarantor)
and JPMorgan Chase Bank (China) Company Limited, Shanghai Branch, as
Administrative Agent (for and on behalf of itself and the Majority Lenders under
the Restated Credit Agreement) (the Administrative Agent), under that
certain Amended and Restated Guarantee Agreement dated as of August 23, 2007 by
and between the Guarantor and the Administrative Agent (for and on behalf of
itself and the other Finance Parties from time to time party to the Restated
Credit Agreement) (as amended by that certain Amendment No. 1 thereto, dated as
of April 25, 2008, and that certain Amendment No. 2 thereto, dated as of October
31, 2008, and as may be further amended, supplemented or otherwise modified from
time to time, the Guarantee
Agreement). Capitalized terms used herein and
not otherwise defined herein shall have the respective meanings given to them in
the Guarantee Agreement. 

          WHEREAS, the Guarantor has requested that the Administrative
Agent and the Majority Lenders agree to certain amendments to the Guarantee
Agreement; 

          WHEREAS, the Guarantor, the Administrative Agent and the
Majority Lenders have agreed to such amendments on the terms and conditions set
forth herein; 

          WHEREAS, concurrently with the amendments to the Guarantee
Agreement pursuant to this Confirmation and Amendment, Photronics Imagining
Technologies (Shanghai) Co., Ltd., borrower under the Restated Credit Agreement (the Borrower), and the Finance Parties have agreed to amend the Restated
Credit Agreement pursuant to an Amendment Agreement dated as of the date hereof
(the Amendment to Credit
Agreement); 

          WHEREAS, it is a condition precedent to the execution and
delivery of the Amendment to Credit Agreement by the Finance Parties that the
Guarantor consents to the amendments to the Restated Credit Agreement as set
forth therein and confirms its guaranty, and the Guarantor is willing to grant
such consent and confirmation; 

          NOW, THEREFORE, in consideration of the premises set forth
above, the terms and conditions contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Guarantor and the Administrative Agent (for and on behalf of itself and the
Majority Lenders under the Restated Credit Agreement) have agreed to enter into
this Confirmation and Amendment. 





	
                1. Amendments to Guarantee
      Agreement. Effective as of the date of
      satisfaction of the conditions precedent set forth in Section 2 below, the
      Guarantee Agreement is hereby amended as follows: 

                (a) Section 1.1 of the
      Guarantee Agreement is amended to add the following definitions thereto
      and, where applicable, to replace the corresponding previously existing
      definitions: 
 

	          	
           Capital Expenditures means,
      without duplication, any cash expenditures for any purchase or other
      acquisition of any asset which would be classified as a fixed or capital
      asset on a consolidated balance sheet of the Guarantor and its
      Subsidiaries prepared in accordance with GAAP. 

           Chinese Bridge Facility means
      the RMB22,500,000 short-term credit facility by and among Photronics
      Imaging Technologies (Shanghai) Co., Ltd. and JPMorgan Chase Bank, N.A.,
      Shanghai Branch, as lender. 

           Chinese Facility Sale means any
      sale of the Guarantor’s direct or indirect Equity Interests in the Company
      or all or a portion of the assets of the Company. 

           Collateral means all Pledged
      Equity, all “Collateral” as defined in the Security Agreement and all
      other property pledged in favor of the Collateral Agent, on behalf of
      itself and the Holders of Secured Obligations, pursuant to the Mortgages
      and any other Collateral Document from time to time. 

           Collateral Documents means,
      collectively, the Security Agreement, the Pledge Agreements, the Mortgages
      and all other agreements, instruments and documents executed in connection
      with this Agreement that are intended to create, evidence or perfect Liens
      to secure the Secured Obligations. 

           Consolidated Fixed Charges
      means, with reference to any period, without duplication, interest
      payments in cash and scheduled principal payments on Indebtedness made in
      cash during such period, plus Taxes paid in cash, all calculated for the
      Guarantor and its Subsidiaries on a consolidated basis. 

           First Tier Foreign Subsidiary
      means each Material Subsidiary which is a Foreign Subsidiary and with
      respect to which any one or more of the Guarantor and its Domestic
      Subsidiaries directly owns or controls more than 50% of such Foreign
      Subsidiary’s Equity Interests.
      

           Fixed Charge Coverage Ratio has
      the meaning assigned to such term in Section 7.11(d). 

           Manchester Facility means the
      real property and buildings owned by the Guarantor or any Subsidiary
      located in Manchester, England. 



2 





	          	
           Mortgage means each mortgage,
      deed of trust or other agreement which conveys or evidences a Lien in
      favor of the Collateral Agent, for the benefit of the Collateral Agent and
      the Holders of Secured Obligations, on real property of a Loan Party,
      including any amendment, restatement, modification or supplement thereto,
      each in form and substance reasonably acceptable to the Collateral Agent
      and the Guarantor. 

           Mortgage Instruments means such
      title reports, title insurance, flood certifications and flood insurance,
      opinions of counsel, surveys, appraisals and environmental reports and
      other similar information and related certifications as are reasonably
      requested by, and in form and substance reasonably acceptable to, the
      Collateral Agent from time to time. 

           Net Proceeds means, with respect
      to any event, (a) the cash proceeds actually received in respect of such
      event including (i) any cash received in respect of any non-cash proceeds
      (including any cash payments received by way of deferred payment of
      principal pursuant to a note or installment receivable or purchase price
      adjustment receivable or otherwise, but excluding any interest payments),
      but only as and when received, (ii) in the case of a casualty, insurance
      proceeds and (iii) in the case of a condemnation or similar event,
      condemnation awards and similar payments, net of (b) the sum of (i) all
      reasonable attorneys’ fees, accountants’ fees, investment banking fees,
      survey costs, title policy premiums, and related search and recording
      charges, transfer taxes, deed or mortgage recording taxes, required
      payments of other obligations relating to the applicable event on such
      asset, other customary expenses and brokerage, consultant and other
      customary fees actually incurred in connection therewith, (ii) in the case
      of a sale, transfer or other disposition of an asset (including pursuant
      to a sale and leaseback transaction or a casualty or a condemnation or
      similar proceeding), the amount of all payments required to be made as a
      result of such event to repay Indebtedness (other than Loans) secured by
      such asset or otherwise subject to mandatory prepayment as a result of
      such event and (iii) the amount of all taxes paid (or reasonably estimated
      to be payable) and the amount of any reserves established against any
      adjustment to the sale price or to fund contingent liabilities reasonably
      estimated to be payable, in each case during the year that such event
      occurred or the next succeeding year and that are directly attributable to
      such event (as determined reasonably and in good faith by a Financial
      Officer). 

           Pledge Subsidiary means (i) each
      Domestic Subsidiary and (ii) each First Tier Foreign Subsidiary that is a
      Material Subsidiary. 

           Pledged Equity means all pledged
      Equity Interests in or upon which a security interest or Lien is from time
      to time granted to the Collateral Agent, for the benefit of the Holders of
      Secured Obligations, under the Pledge Agreements. 

           PRC Collateral Documents means
      the mortgages, security agreements and all other agreements, instruments
      and documents executed in connection with the Restated Credit Agreement
      (as amended by the Amendment to Credit Agreement) that are intended to
      create, evidence or perfect Liens to secure the "Obligations" as defined
      thereunder.



3 





	          	
           Qualified Asset Sales means (i)
      the Chinese Facility Sale and (ii) the sale, transfer or disposition by
      the Guarantor or any Subsidiary of all or a portion of the Manchester
      Facility (in each case excluding sales, transfers or dispositions from the
      Guarantor or any Subsidiary to the Guarantor, any Subsidiary or any
      Affiliate thereof). 

           Qualified Unsecured Indebtedness
      of the Guarantor or any Subsidiary means unsecured Indebtedness of such
      Person in an aggregate outstanding principal amount not in excess of
      $25,000,000 and on terms and conditions satisfactory to the Administrative
      Agent (it being understood and agreed that the limitations applicable to
      Subordinated Indebtedness pursuant to Section 7.10 shall also be
      applicable, mutatis
      mutandis, to Qualified Unsecured
      Indebtedness). 

           Secured Obligations means the
      Obligations and the Indebtedness and other obligations of the Guarantor
      under the U.S. Facility, and includes without limitation the "Obligations"
      as defined in the U.S. Facility Agreement.

           Security Agreement means that
      certain Security Agreement (including any and all supplements thereto),
      dated as of December 12, 2008, between the Loan Parties and the Collateral
      Agent, for the benefit of the Collateral Agent and the other Holders of
      Secured Obligations, as the same may be amended, restated or otherwise
      modified from time to time. 

           UCC means the Uniform Commercial
      Code as in effect from time to time in the State of New York or any other
      state the laws of which are required to be applied in connection with the
      issue of perfection of security interests. 



          (b) Section 1.1 of the Guarantee Agreement is amended to delete the defined
terms "Financials" and "Permitted Acquisition" appearing therein. 

          (c) The definition of "Finance Documents" in Section 1.1 of the Guarantee
Agreement is amended to delete the reference "Pledge Agreements" and to replace
such reference with the reference "Collateral Documents and PRC Collateral
Documents".

          (d) The definition of "Pledge Agreements" appearing in Section 1.1 of the
Guarantee Agreement is amended to delete the reference "6.10 (Pledge
Agreements)" therein and to replace such reference with the reference "6.9
(Pledges; Additional Collateral; Further Assurances)". 

          (e) Section 5.9 of the Guarantee Agreement is amended to add the following at
the end thereof: "and Liens under the Collateral Documents and the PRC
Collateral Documents." 

          (f) Section 5.18 of the Guarantee Agreement is amended to delete the
reference "the date hereof" appearing therein and to replace such reference with
the reference "December 12, 2008, except for representations and warranties
which refer expressly to a prior date, which representations and warranties were
true and correct as of each such prior date".

          (g) Article V of the Guarantee Agreement is amended to add the following as a
new Section 5.19 thereof and re-designating Section 5.19 thereof as Section
5.20: 

4 





	          	
           SECTION 5.19 Security
      Interest in Collateral 

           The
      provisions of the Collateral Documents create legal and valid Liens on all
      the Collateral covered thereby in favor of the Collateral Agent, for the
      benefit of the Holders of Secured Obligations, and (i) when all
      appropriate filings, recordings, registrations, stampings or notifications
      are made and (ii) upon the taking of possession or control by the
      Collateral Agent of such Collateral with respect to which a security
      interest may be perfected only by possession or control, such Liens shall
      constitute perfected and continuing Liens on the Collateral, securing the
      Secured Obligations, and having priority over all other Liens on the
      Collateral except in the case of (a) Permitted Encumbrances, to the extent
      any such Permitted Encumbrances would have priority over the Liens in
      favor of the Collateral Agent pursuant to any applicable law and (b) Liens
      perfected only by possession (including possession of any certificate of
      title) to the extent the Collateral Agent has not obtained or does not
      maintain possession of such Collateral. 

		 
		
      (h)
      Section 6.3 of the Guarantee Agreement is
      amended by adding the following at the end thereof: 

		 
		
           For the avoidance of doubt,
      the Guarantor shall not initiate, or permit any other Person to initiate,
      any liquidation, dissolution, winding-up or other termination of existence
      of the Company.

		 
		
      (i)
      Section 6.5 of the Guarantee Agreement is
      amended and restated in its entirety to read as follows:
  


 

	          	
           SECTION 6.5
      Maintenance of Properties; Insurance 

           (a)
      The Guarantor will, and will cause each of its Subsidiaries to, (i) keep
      and maintain all property material to the conduct of its business in good
      working order and condition, ordinary wear and tear excepted, and (ii)
      maintain with financially sound and reputable carriers (1) insurance in
      such amounts (with no greater risk retention) and against such risks
      (including loss or damage by fire and loss in transit; theft, burglary,
      pilferage, larceny, embezzlement, and other criminal activities; business
      interruption; and general liability) and such other hazards, as is
      customarily maintained by companies of established repute engaged in the
      same or similar businesses operating in the same or similar locations and
      (2) all insurance required pursuant to the Collateral Documents. The
      Guarantor will furnish to the Lenders, upon request of the Collateral
      Agent, information in reasonable detail as to the insurance so maintained.
      

           (b)
      The Guarantor shall deliver to the Collateral Agent endorsements (x) to
      all “All Risk” physical damage insurance policies on the Loan Parties’
      tangible personal property and assets located in the United States of
      America and business interruption insurance policies naming the Collateral
      Agent as lender loss payee, and (y) to all general liability and other
      liability policies naming the Collateral Agent an additional insured. Each
      policy for liability insurance shall provide for all losses to be paid on
      behalf of the Collateral Agent and the Guarantor or its Subsidiaries as
      their interests may appear. In the event the Guarantor or any of its
      Subsidiaries at any time or times hereafter shall fail to
  



5 





	          	
      obtain or maintain any of the
      policies or insurance required herein or to pay any premium in whole or in
      part relating thereto, then the Collateral Agent, without waiving or
      releasing any obligations or resulting Default hereunder, may at any time
      or times thereafter (but shall be under no obligation to do so) obtain and
      maintain such policies of insurance and pay such premiums and take any
      other action with respect thereto which the Collateral Agent deems
      advisable. All sums so disbursed by the Collateral Agent shall constitute
      part of the Obligations, payable as provided in this Agreement. The
      Guarantor will furnish to the Collateral Agent prompt written notice of
      any casualty or other insured damage to any material portion of the
      Collateral or the commencement of any action or proceeding for the taking
      of any material portion of the Collateral or interest therein under power
      of eminent domain or by condemnation or similar proceeding. 

           (c)
      So long as no Event of Default shall have occurred and be continuing, all
      insurance payments received by the Collateral Agent in connection with any
      loss, damage or destruction of any property of the Guarantor or any of its
      Subsidiaries will be released by the Collateral Agent to the applicable
      Guarantor or such Subsidiary for the repair, replacement or restoration
      thereof, subject to the prepayment requirements under Section 2.11(c) of
      the U.S. Facility Agreement and subject to such other terms and conditions
      with respect to the release thereof as the Collateral Agent may reasonably
      require. 



          (j) Section 6.6 of the Guarantee Agreement is amended to (1) add the phrase
“including environmental assessment reports and Phase I or Phase II studies,”
immediately after the phrase “relevant books and records,” appearing in the
second sentence thereof and (2) add the sentence “The Guarantor acknowledges
that the Administrative Agent, after exercising its rights of inspection, may
prepare and distribute to the Lenders certain reports pertaining to the
Guarantor and its Subsidiaries’ assets for internal use by the Administrative
Agent and the Lenders.” to the end thereof. 

          (k) Section 6.9 of the Guarantee Agreement is amended and restated in its
entirety to read as follows: 


	          	
           SECTION 6.9 Pledges;
      Additional Collateral; Further Assurances 

           (a)
      The Guarantor will cause, and will cause each other Subsidiary qualifying
      as a Loan Party to cause, within the time periods set forth below with
      respect to real property, all of its owned property (whether real,
      personal, tangible, intangible, or mixed) to be subject at all times to
      first priority and perfected (subject in each case to the qualifications
      specified in Section 5.19 with respect to priority and perfection) Liens
      in favor of the Collateral Agent for the benefit of the Holders of Secured
      Obligations to secure the Secured Obligations in accordance with the terms
      and conditions of the Collateral Documents, subject in any case to Liens
      permitted by Section 7.2. Without limiting the generality of the
      foregoing, the Guarantor (i) will cause the Applicable Pledge Percentage
      of the issued and outstanding Equity Interests of each Pledge Subsidiary
      directly owned by the Guarantor or any other Subsidiary qualifying as a
      Loan Party to be subject at all times to a first priority and perfected
      (subject in each case to the qualifications specified in Section 5.19 with
      respect to priority and perfection) Lien in favor of the Collateral Agent
      to secure the Secured Obligations in 




6 





	          	
      accordance with the terms and
      conditions of the Collateral Documents; provided that no such pledge of
      the Equity Interests of a Foreign Subsidiary shall be required hereunder
      to the extent such pledge is prohibited by applicable law or the
      Collateral Agent and its counsel reasonably determine that, in light of
      the cost and expense associated therewith, such pledge would be unduly
      burdensome or not provide material Pledged Equity for the benefit of the
      Holders of Secured Obligations pursuant to legally binding, valid and
      enforceable Pledge Agreements, and (ii) will, and will cause each other
      Subsidiary qualifying as a Loan Party to, deliver Mortgages and Mortgage
      Instruments with respect to real property owned by the Guarantor or such
      Subsidiary to the extent, and within such time period as is, reasonably
      required by the Collateral Agent. Notwithstanding the foregoing, the
      Guarantor agrees to use its best efforts to deliver such Mortgages and
      Mortgage Instruments as soon as practicable after December 12, 2008 but in
      no event later than February 5, 2009 or such later date as the Collateral
      Agent may agree in the exercise of its reasonable discretion with respect
      thereto. 

           (b)
      Without limiting the foregoing, the Guarantor will, and will cause each
      Subsidiary to, execute and deliver, or cause to be executed and delivered,
      to the Collateral Agent such documents, agreements and instruments, and
      will take or cause to be taken such further actions (including the filing
      and recording of financing statements, fixture filings, mortgages, deeds
      of trust and other documents and such other actions or deliveries of the
      type required by Section 4.01 of the U.S. Facility Agreement, as
      applicable), which may be required by law or which the Collateral Agent
      may, from time to time, reasonably request to carry out the terms and
      conditions of this Agreement and the other Finance Documents and to ensure
      perfection and priority of the Liens created or intended to be created by
      the Collateral Documents, all at the expense of the Guarantor. 

           (c)
      If any real property or improvements thereto or any interests therein are
      acquired by a Loan Party after December 12, 2008 (other than assets
      already constituting Collateral under the Security Agreement or any
      Mortgage), the Guarantor will notify the Collateral Agent thereof, and, if
      requested by the Collateral Agent, the Guarantor will cause such assets to
      be subjected to a Lien securing the Secured Obligations and will take, and
      cause the other Loan Parties to take, such actions as shall be necessary
      or reasonably requested by the Collateral Agent to grant and perfect such
      Liens, including actions described in paragraph (b) of this Section, all
      at the expense of the Guarantor. 



          (l) Article VI of the Guarantee Agreement is amended to add the following as
a new Section 6.11 and a new Section 6.12 thereof: 

	          	
           SECTION 6.11
      Registration of the Guarantee 

           The
      Guarantor must cause the Company to, within 15 days upon the performance
      of the Guarantee by the Guarantor, effect the foreign debt registration
      with SAFE in respect of the Guarantee and promptly thereafter deliver to
      the Administrative Agent a certified copy of the foreign debt registration
      certificate issued by SAFE. 



7 





	          	
           SECTION 6.12
      Depository Banks 

           The
      Guarantor and each Subsidiary will, by no later than January 12, 2009,
      maintain one or more of the Lenders (or their subsidiaries or
      affiliates) as its principal depository bank, including for the maintenance of
      operating, administrative, cash management, collection activity, and other
      deposit accounts for the conduct of its business. In the event that any
      Lender (or their subsidiary or affiliate) ceases to be a Lender under the
      Restated Credit Agreement, the Guarantor and its applicable Subsidiaries
      shall have 30 days, or such longer period as may be agreed by the
      Collateral Agent in its reasonable discretion, to move its accounts to one
      or more of the other Lenders (or their subsidiaries or affiliates).
      



          (m) Section 7.1(f) of the Guarantee Agreement is amended to delete the amount
“$35,000,000” appearing therein and to replace such amount with the amount
“$5,000,000”. 

          (n) Section 7.1(g) of the Guarantee Agreement is amended and restated in its
entirety to read as follows: 


	          	
           (g)
      Subordinated Indebtedness and Qualified Unsecured Indebtedness, in each
      case so long as, after giving effect to the incurrence thereof, no Default
      shall have occurred and be continuing and the Borrowers shall be in
      compliance, on a pro forma basis after giving effect to such incurrence,
      with the covenants contained in Section 7.11 recomputed as if such
      incurrence had occurred on the first day of the period for testing such
      compliance; 




          (o) Section 7.1(j) of the Guarantee Agreement is amended to delete the word
“and” appearing at the end thereof. 

          (p) Section 7.1(k) of the Guarantee Agreement is amended and restated in its
entirety to read as follows: 


	          	
           (j)
      unsecured Indebtedness in an aggregate principal amount not exceeding
      $1,000,000 at any time outstanding; and 




          (q) Section 7.1 of the Guarantee Agreement is amended to add the following as
a new clause (l) thereof: 


	          	
           (l)
      in addition to Indebtedness permitted pursuant to Section 7.1(c),
      Indebtedness existing on December 12, 2008 and set forth in Schedule
      7.1(l) and extensions, renewals and replacements of any such Indebtedness
      with Indebtedness of a similar type that does not increase the outstanding
      principal amount thereof. 




          (r) Section 7.2(a) of the Guarantee Agreement is amended to delete the phrase
“the Pledge Agreements” appearing therein and to replace such phrase with the
phrase “any Collateral Document or PRC Collateral Document”. 

          (s) Section 7.3(a)(iii) of the Guarantee Agreement is amended
to add the phrase “or otherwise dissolve into,” immediately before the phrase “a
Loan Party” appearing therein. 

8 




          (t) Each of clause (D) and clause (E) of Section 7.3(a)(iv) of the Guarantee
Agreement is amended and restated in its entirety to read as follows:



	          	
           (D)
      enter into Qualified Asset Sales so long as the Net Proceeds resulting
      thereof are applied in accordance with Section 2.11(c) of the U.S.
      Facility Agreement and 

           (E)
      make any other sales, transfers, leases or dispositions of assets with an
      aggregate book value that, together with the aggregate book value of all
      other assets of the Guarantor and its Subsidiaries previously leased, sold
      or disposed of as permitted by this clause (E) during any fiscal year of
      the Guarantor, does not exceed 1% of Consolidated Total Assets (as
      reflected in the most recent consolidated balance sheet of the Guarantor
      delivered to the Lenders) or as otherwise approved in writing by the
      Administrative Agent and 




          (u) Clause (vi) of Section 7.3(a) of the Guarantee Agreement is amended to
(1) become clause (v) of Section 7.3(a) of the Guarantee Agreement and (2)
insert the phrase “or a Material Subsidiary” immediately after the reference to
“Foreign Subsidiary Borrower” appearing therein. 

          (v) Section 7.4(d) of the Guarantee Agreement is amended and restated in its
entirety to read as follows: 


	          	
           (d)
      investments, loans or advances made by the Guarantor in or to any
      Subsidiary and made by any Subsidiary to the Guarantor or any other
      Subsidiary (provided that not more than $1,000,000 in investments, loans
      or advances or capital contributions may be made and remain outstanding,
      during the term of this Agreement, by any Loan Party to a Subsidiary which
      is not a Loan Party but provided further that investments, loans, advances
      or capital contributions made to (i) effect the servicing of the
      obligations under the Restated Credit Agreement or the Chinese Bridge
      Facility and (ii) fund the operating expenses of the Company in the
      ordinary course of business consistent with past practice, in each case
      shall not be subject to the foregoing proviso);





          (w) Each of Section 7.4(h) and Section 7.4(j) of the Guarantee Agreement is
amended and restated in its entirety to read as follows: 

	          	
           (h) [intentionally omitted];
      

           (j) [intentionally omitted];
      



          (x) Section 7.4(k) of the Guarantee Agreement is amended to (1) delete the
amount “$10,000,000” appearing therein and to replace such amount with the
amount “1,000,000” and (2) change the period appearing at the end thereof to “;
and”. 

          (y) Section 7.4 of the Guarantee Agreement is amended to add the following as
a new clause (l) thereof: 

9 





	          	
           (l)
      in addition to investments permitted pursuant to Section 7.4(i),
      investments, loans or advances existing on December 12, 2008 and set forth
      in Schedule 7.4(l) and extensions, renewals and replacements of any such
      investments, loans or advances with investments, loans or advances of a
      similar type that do not increase the outstanding amount thereof.
      



          (z) Section 7.6(a) of the Guarantee Agreement is amended to (1) insert a
comma immediately after the word “Subsidiaries” appearing in clause (iii)
thereof and (2) amend and restate clause (iv) thereof in its entirety to read as
follows: 


	          	
           (iv) PSMC may make dividends
      to its shareholders. 




          (aa) Clause (iii) of Section 7.6(b) of the Guarantee Agreement is amended and
restated in its entirety to read as follows: 

	          	
           (iii) [intentionally omitted];
      



          (bb) Section 7.11 of the Guarantee Agreement is amended and restated in its
entirety to read as follows: 

	          	
           SECTION7.11 Financial
      Covenants 

           (a)
      Maximum Senior Leverage Ratio. The Guarantor will not permit the ratio
      (the Senior Leverage
      Ratio), determined as of the end of
      each of its fiscal quarters set forth below, of (i) Consolidated Senior
      Indebtedness to (ii) Consolidated EBITDA for the period of 4 consecutive
      fiscal quarters ending with the end of such fiscal quarter, all calculated
      for the Guarantor and its Subsidiaries on a consolidated basis, to be
      greater than the ratio set forth opposite such fiscal
      quarter:
 

		Fiscal Quarter Ending On or
      About  	     	Maximum Senior Leverage
      Ratio  
		October 31, 2008  		2.25 to 1.00 
	 	January 31,
      2009  		2.25 to 1.00 
		April 30, 2009  	 	2.15 to 1.00 
		July 31,
      2009  		2.00 to 1.00 
		October 31, 2009  		1.75 to 1.00 
		January 31,
      2010 and each Fiscal Quarter  	 	1.25 to 1.00 
		ending
      thereafter  		  
		
      
     (b) Total Leverage Ratio. The Guarantor will not permit the ratio
      (the Total Leverage
      Ratio), determined as of the end of
      each of its fiscal quarters set forth below, of (i) Consolidated Total
      Indebtedness to (ii) Consolidated EBITDA for the period of 4 consecutive
      fiscal quarters ending with the end of such fiscal quarter, all calculated
      for the Guarantor and its Subsidiaries on a consolidated basis, to be
      greater than the ratio set forth opposite such fiscal quarter:
    




	          	Fiscal Quarter Ending On or
      About  	     	Maximum Total Leverage
      Ratio  
	 	October 31, 2008  		2.50 to 1.00 
		January 31,
      2009  	 	2.50 to 1.00 
		April 30, 2009  		2.40 to 1.00 
		July 31,
      2009  		2.25 to 1.00 
		October
      31, 2009  		2.00 to 1.00
    
		January
      31, 2010 and each Fiscal Quarter  		1.50 to 1.00 
		ending
      thereafter  		



10 





	          	
           (c)
      Minimum Unrestricted Cash
      Balances. The Guarantor will not
      permit the aggregate amount of unrestricted cash balances and Permitted
      Investments maintained by the Guarantor and its Subsidiaries to be less
      than $50,000,000. For the avoidance of doubt, any cash deposited with the
      Collateral Agent pursuant to the terms of the Collateral Documents shall
      be deemed to be unrestricted cash. 

           (d)
      Minimum Fixed Charge Coverage Ratio. The Guarantor will not permit the
      ratio (the Fixed Charge Coverage
      Ratio), determined as of the end of
      each of its fiscal quarters set forth below, of (i) Consolidated EBITDA
      minus
      Capital Expenditures to (ii) Consolidated Fixed Charges, in each case for
      the period of four (4) consecutive fiscal quarters ending with the end of
      such fiscal quarter, all calculated for the Guarantor and its Subsidiaries
      on a consolidated basis, to be less than the ratio set forth opposite such
      fiscal quarter: 


 

	          	Fiscal Quarter Ending On or
      About  	     	Minimum Fixed Charge
      Coverage Ratio 
		January 31, 2009  	 	1.25 to 1.00  
		April 30, 2009
      and each Fiscal Quarter  		1.50 to 1.00  
		ending thereafter  		  
		 		
		
           (e)
      Minimum EBITDA. The Guarantor will not permit Consolidated EBITDA for the
      fiscal quarters ending on or about the dates set forth below to be less
      than the corresponding amount set forth opposite such fiscal quarter:
      




	          	Fiscal Quarter Ending On or
      About  	     	Minimum Consolidated
      EBITDA  
		October 31, 2008  		$25,000,000  
		January 31,
      2009  		$16,000,000  
		April 30, 2009  		$25,000,000  
		July 31, 2009
      and each  		$30,000,000  
		Fiscal Quarter
      ending thereafter  	 	  
		 
		
           (f)
      Maximum Capital Expenditures. The Guarantor will not, nor will it permit
      any Subsidiary to, make Capital Expenditures in (i) an amount (in the
      aggregate for the Guarantor and its Subsidiaries) in excess of $12,500,000
      during the Guarantor’s fiscal quarter ending on or about October 31, 2008
      and (ii) an amount (in the aggregate for the Guarantor and its
      Subsidiaries) during the period of 4 consecutive fiscal quarters ending as
      of the end of each of its fiscal quarters (other than the fiscal quarter
      ending on or about October 31, 2008) in excess of the Relevant Amount. "Relevant
      Amount" means $65,000,000 as of the end of the Guarantor's fiscal quarter
      ending on or about January 31, 2009 and $57,500,000 as of the end of each
      of the Guarantor's fiscal quarters ending thereafter.
  




11 





          (cc) A new Schedule 7.1(l) is hereby added to the Guarantee Agreement as set
forth on Annex A hereto. 

          (dd) A new Schedule 7.4(l) is hereby added to the Guarantee Agreement as set
forth on Annex B hereto. 

          2. Conditions of
Effectiveness. The effectiveness of this
Confirmation and Amendment is subject to the
conditions precedent that (a) the Administrative Agent shall have received
counterparts of this Confirmation and Amendment duly executed by the Guarantor
and the Administrative Agent (for and on behalf of itself and the Majority
Lenders under the Restated Credit Agreement), (b) the Guarantor shall have paid
to the Administrative Agent, for the account of each Lender that consents to the
amendments herein by such time as is requested by the Administrative Agent, an
amendment fee equal to 0.50% of such Lender’s share in the outstanding Loans and
undrawn Commitments under the Restated Credit Agreement, (c) the Guarantor shall
have paid all of the fees of the Administrative Agent and its affiliates
(including, to the extent invoiced, reasonable attorneys’ fees and expenses of
the Administrative Agent) in connection with this Confirmation and Amendment and
the other Finance Documents and (d) the Guarantor and its Subsidiaries shall
have delivered to the Administrative Agent and the Collateral Agent all
Collateral Documents and related instruments and documents requested by the
Administrative Agent and the Collateral Agent in connection with the
effectiveness of this Confirmation and Amendment. 

          3. Consent to the Amendment to Credit Agreement and Confirmation
of Guaranty. 

          (a) The Guarantor consents to the execution, delivery and performance of the
Amendment to Credit Agreement by the Borrower, to the terms and conditions of
the Amendment to Credit Agreement, and to the transactions contemplated by the
Amendment to Credit Agreement.

          (b) The Guarantor confirms, reaffirms and ratifies the Guarantee Agreement,
as amended hereby, and acknowledges and agrees that the Guarantee Agreement, as
amended hereby, is, and shall remain, the valid and enforceable obligation of
the Guarantor and in full force and effect and shall apply to the obligations of
the Borrower under the Restated Credit Agreement as amended by the Amendment to
Credit Agreement. 

          (c) The Guarantor confirms and agrees that it has no defenses, counterclaims
or set-offs to its obligations under the Guarantee Agreement, as amended hereby,
including, without limitation, in respect of the Restated Credit Agreement as
amended by the Amendment to Credit Agreement, and hereby waives any such
defense, counterclaim or set-off. 

          4. Representations and
Warranties of the Guarantor and Acknowledgements
and Confirmations. The Guarantor hereby
represents and warrants as follows: 

          (a) This Confirmation and Amendment
and the Guarantee Agreement, as amended hereby,
constitute legal, valid and binding obligations of the Guarantor and are
enforceable against the Guarantor in accordance with their terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors’ rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.


12 





          (b) As of the date hereof and giving effect to the terms of this Confirmation
and Amendment, (i) no Default shall have occurred and be continuing and (ii) the
representations and warranties of the Guarantor set forth in the Guarantee
Agreement, as amended hereby, are true and correct as of the date hereof, except
for representations and warranties which expressly refer to an earlier date, in
which case such representations and warranties were true and correct as of each
such earlier date. 

          (c) The Guarantor further represents, warrants and confirms that no
authorization, approval or consent of, and no filing or registration with, any
governmental or regulatory authority or agency (including, without limitation,
any registration of this Confirmation and Amendment with the State
Administration of Foreign Exchange) is required on the part of the Guarantor for
the Guarantor to make and give this Confirmation and Amendment and to perform
its obligations under the Guarantee Agreement, as amended hereby, in respect of
the transactions contemplated by Restated Credit Agreement, as amended by the
Amendment to the Credit Agreement. 

          (d) The Guarantor hereby acknowledges and confirms that (i) it does not have
any grounds, and hereby agrees not to challenge (or to allege or to pursue any
matter, cause or claim arising under or with respect to) the effectiveness,
genuineness, validity, collectibility or enforceability of the Restated Credit
Agreement (as amended by the Amendment to Credit Agreement) or any of the other
Finance Documents, the Secured Obligations, the Liens securing such Secured
Obligations, or any of the terms or conditions of any Finance Document and (ii)
it does not possess (and hereby forever waives, remises, releases, discharges
and holds harmless the Lenders, the Agents and their respective affiliates,
stockholders, directors, officers, employees, attorneys, agents and
representatives and each of their respective heirs, executors, administrators,
successors and assigns (collectively, the “Indemnified Parties”) from and
against, and agrees not to allege or pursue) any action, cause of action, suit,
debt, claim, counterclaim, cross-claim, demand, defense, offset, opposition,
demand and other right of action whatsoever, whether in law, equity or otherwise
(which it, all those claiming by, through or under it, or its successors or
assigns, have or may have) against the Indemnified Parties, or any of them, by
reason of, any matter, cause or thing whatsoever, with respect to events or
omissions occurring or arising on or prior to the date hereof and relating to
the Restated Credit Agreement (as amended by the Amendment to Credit Agreement)
or any of the other Finance Documents (including, without limitation, with
respect to the payment, performance, validity or enforceability of the Secured
Obligations, the Liens securing the Secured Obligations or any or all of the
terms or conditions of any Finance Document) or any transaction relating
thereto. 

          5. Reference to and Effect on
the Guarantee Agreement. 

          (a) Upon the effectiveness hereof, each reference to the
Guarantee Agreement in the Guarantee Agreement or any other Finance Document
shall mean and be a reference to the Guarantee Agreement as amended hereby.


          (b) Except as specifically amended above, the Guarantee
Agreement and all other documents, instruments and agreements executed and/or
delivered in connection therewith shall remain in full force and effect and are
hereby ratified and confirmed. 

13 




          (c) The execution, delivery and effectiveness of this Confirmation and
Amendment shall not operate as a waiver of any right, power or remedy of the
Administrative Agent or the Lenders, nor constitute a waiver of any provision of
the Guarantee Agreement or any other documents, instruments and agreements
executed and/or delivered in connection therewith. 

          6. Governing Law. This Confirmation and
Amendment shall be construed in accordance with and governed by the law of the
State of New York. 

          7. Headings. Section headings in this
Confirmation and Amendment are included herein for convenience of reference only
and shall not constitute a part of this Confirmation and Amendment for any other
purpose. 

          8. Counterparts. This Confirmation and
Amendment may be executed by one or more of the parties hereto on any number of
separate counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. Signatures delivered by
facsimile or PDF shall have the same force and effect as manual signatures
delivered in person. 

[Signature Pages Follow] 

14 




     IN
WITNESS WHEREOF, this Confirmation and Amendment has been duly executed as of
the day and year first above written. 


	PHOTRONICS, INC.,  
	as
      the Guarantor  
	  
	By: 	 
	Name:  
	Title:  




 

 

 

 

 

 

 

 

 

 

 

 

 

 

Signature Page to Confirmation of
Guaranty and Amendment No. 3 
Photronics, Inc. 
Amended and Restated Guarantee Agreement
dated as of August 23, 2007







	JPMORGAN CHASE BANK (CHINA) COMPANY  
	LIMITED, SHANGHAI BRANCH, as Administrative  
	Agent
      (for and on behalf of itself and the Majority  
	Lenders under the Restated Credit Agreement)  
	  
	By: 	 
	Name:  
	Title:  




 

 

 

 

 

 

 

 

 

 

 

 

 

 

Signature Page to Confirmation of
Guaranty and Amendment No. 3
Photronics, Inc. 
Amended and Restated Guarantee Agreement
dated as of August 23, 2007