**Exhibit 4.2**

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**AGREEMENT OF SUBSTITUTION AND AMENDMENT OF**

**PREFERRED SHARES RIGHTS AGREEMENT**

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This Agreementof Substitution and Amendment (this “Agreement”)is entered into as of January13, 2003 by and between Cymer, Inc., a Nevada corporation (the “Company”) andAmerican Stock Transfer and Trust Company, a New York banking corporation(“AST”).  Captitalized terms used hereinbut not otherwise defined shall have the meaning given to such terms in theRights Agreement (defined below).

**RECITALS**

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A.                                   Onor about February 13, 1998, the Company entered into a Preferred Shares RightsAgreements (the “Rights Agreement”) with ChaseMellon Shareholder Services,L.L.C. (the “Predecessor Agent”) as Rights Agent.

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**B.**                                     The Company wishes to remove the Predecessor Agentand substitute AST as Rights Agent pursuant to Section 21 of the RightsAgreement.

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**C.**                                     The Company has given the Predecessor Agent noticeof removal of the Predecessor Agent as Rights Agent in accordance with theterms of Section 21 of the Rights Agreement.

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**D.**                                    The Company wishes to amend Section 21 of the RightsAgreement to provide that any successor Rights Agent shall, at the time of itsappointment as rights agent, have a combined capital and surplus of at least$10 million, rather than $50 million.

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**AGREEMENT**

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**NOW THEREFORE,** in consideration of the foregoing and of other goodand valuable consideration, the sufficiency of which is hereby acknowledged,the parties agree as follows:

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**1.**                                       Clause (i) of the fifth sentence of Section 21 ofthe Rights Agreement is hereby amended and restated to read as follows:

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**“(i) a Person organized and doing business under the laws of the UnitedStates or of any state of the United States, in good standing, which is subjectto supervision or examination by federal or state authority and which has atthe time of its appointment as Rights Agent a combined capital and surplus ofat least $10 million or”**

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**2.**                                       The Company hereby appoints, effective as of January20, 2003 (the “Effective Date”), AST as Rights Agent pursuant to Section 21 ofthe 

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**Rights Agreement, to serve in that capacity for the consideration andsubject to all of the terms and conditions of the Rights Agreement, as amendedhereby.**

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**3.**                                       AST hereby accepts the appointment as Rights Agentpursuant to Section 21 of the Rights Agreement and agrees to serve in thatcapacity for the consideration and subject to all of the terms and conditionsof the Rights Agreement, as amended hereby. AST hereby represents and warrants to the Company that AST is able toserve in the capacity of Rights Agent, perform all of the duties andresponsibilities of Rights Agent and meets all the requirements of Rights Agentas set forth in the Rights Agreement, as amended hereby.

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**4.**                                       From and after the Effective Date, each and everyreference in the Rights Agreement to a “Rights Agent” shall be deemed to be areference to AST.

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**5.**                                       Section 26 of the Rights Agreement is amended toprovide that notices or demands shall be addressed as follows (until anotheraddress is filed in writing with the Rights Agent and the Company):

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| **If to the  Company:** |   |                                                         |
|-------------------------|--------|--------------------------------------------------------------|
|                    |   | **Cymer, Inc.**                                              |
|                    |   | **16750 Via Del  Campo Court**                               |
|                    |   | **San Diego,  California 92127**                             |
|                    |   | **Attention:    Nancy Baker**                 |
|                    |   |                                                         |
| **with a copy to:**     |   |                                                         |
|                    |   | **Cooley Godward** LLP                                       |
|                    |   | **4401 Eastgate  Mall**                                      |
|                    |   | **San Diego,  California 92121**                             |
|                    |   | **Attention:     D. Bradley Peck, Esq.** |
|                    |   |                                                         |
| **If to AST:**          |   | **American Stock  Transfer & Trust Company**             |
|                    |   | **59 Maiden Lane**                                           |
|                    |   | **New York, NY  10038**                                 |
|                    |   | **Attention:    Corporate Trust Department**  |

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**6.**                                       Except as expressly modified herein, the RightAgreement, as amended hereby, shall remain in full force and effect.  In the event of any inconsistency betweenthis Agreement and the Rights Agreement, the terms of this Agreement shallcontrol.

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**7.**                                       This Agreement of Substitution and Amendment may beexecuted in one or more counterparts, each of which shall together constituteone and the same document.

 

**IN WITNESS WHEREOF**,the parties have caused this Agreement to be duly executed as of the dateindicated above.

 
|   | **CYMER, INC.**                                   |
|--------|---------------------------------------------------|
|   |                                              |   |
|   | **By:**                                           |   | **/s/ Nancy J. Baker** |
|   | **Name:  Nancy J. Baker**                    |
|   | **Title:  Sr. VP, CFO & Secretary**      |
|   |                                              |
|   | **AMERICAN STOCK  TRANSFER &  TRUST COMPANY** |
|   |                                              |
|   | **By:**                                           |   | **/s/ Herbert J. Lemmer** |
|   | **Name: Herbert J.  Lemmer**                      |
|   | **Title:  Vice President**                   |

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