<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 28, 1998
REGISTRATION NO. 333-52439
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
DUPONT PHOTOMASKS, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 74-2238819
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification Number)
organization)
</TABLE>
131 OLD SETTLERS BOULEVARD
ROUND ROCK, TEXAS 78664
(512) 310-6500
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
---------------------
JOHN M. LYNN
EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
DUPONT PHOTOMASKS, INC.
131 OLD SETTLERS BOULEVARD
ROUND ROCK, TEXAS 78664
(512) 310-6500
TELECOPY: (512) 310-6544
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
COPIES TO:
CARMELO M. GORDIAN, ESQ. ALAN DEAN, ESQ.
RONALD G. SKLOSS, ESQ. DAVIS POLK & WARDWELL
BROBECK, PHLEGER & HARRISON LLP 450 LEXINGTON AVENUE
301 CONGRESS AVENUE, SUITE 1200 NEW YORK, NEW YORK 10017
AUSTIN, TEXAS 78701 (212) 450-4000
(512) 477-5495 TELECOPY: (212) 450-4800
TELECOPY: (512) 477-5813
---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration
Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box. / /
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
- ---------------------
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
- ---------------------
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
---------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SUCH SECTION 8(A), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Capitalized terms used but not defined in this Part II to the Registration
Statement shall have the respective meanings assigned to such terms in the
Prospectus which forms a part of this Registration Statement.
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable by the registrant and DuPont in
connection with the registration of the Shares under the Securities Act. All
amounts are estimates except the Commission registration fee, the NASD filing
fee and the Nasdaq National Market listing fee. Such expenses will be borne pro
rata by the registrant and DuPont based upon the respective numbers of Shares to
be sold by each.
<TABLE>
<S> <C>
Commission registration fee....................................... $ 47,059
NASD filing fee................................................... 16,452
Nasdaq National Market listing fee................................ 16,100
Legal fees and expenses........................................... 100,000
Accounting fees and expenses...................................... 100,000
Printing expenses................................................. 130,000
Miscellaneous..................................................... 40,389
---------
Total........................................................... $ 450,000
---------
---------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Subsection (a) of Section 145 of the DGCL empowers a corporation to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the corporation) by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fee), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believes to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by right of the corporation to procure a
judgment in its favor by reason of the fact that such person acted in any of the
capacities set forth above, against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification may be made in respect to any claim
issue or matter as to which such person shall have been adjudged to be liable to
the corporation unless and only to the extent that the Court of Chancery or the
court in which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper.
Section 145 further provides that to the extent a director or officer of a
corporation has been successful on the merits or otherwise in the defense of any
such action, suit or proceeding referred to in subsections (a) and (b) of
Section 145 or in the defense of any claim, issue or matter therein, he shall be
II-1
<PAGE>
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith; that the indemnification provided for
by Section 145 shall not be deemed exclusive of any other rights which the
indemnified party may be entitled; that indemnification provided by Section 145
shall, unless otherwise provided when authorized or ratified, continue as to a
person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of such person's heirs, executors and administrators; and
empowers the corporation to purchase and maintain insurance on behalf of a
director or officer of the corporation against any liability asserted against
him and incurred by him in any such capacity, or arising out of his status as
such, whether or not the corporation would have the power to indemnify him
against such liabilities under Section 145.
Section 102(b)(7) of the DGCL provides that a certificate of incorporation
may contain a provision eliminating or limiting the personal liability of a
director to the corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director, provided that such provision shall not
eliminate or limit the liability of the director (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the DGCL, or (iv) for any
transaction from which the director derived an improper personal benefit.
Article Ninth of the registrant's Certificate of Incorporation, as amended
and restated, provides that, to the fullest extent permitted by the DGCL, no
director of the registrant shall be personally liable to the registrant or its
stockholders for monetary damages for breach of fiduciary duty as a director.
Article VII of the registrant's Bylaws, as amended, further provides that
the registrant shall indemnify each of its directors and officers against
expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with any third party proceeding
if such person acted in good faith and in a manner such person reasonably
believed to be in, or not opposed to, the best interests of the registrant and,
with respect to any criminal third party proceeding, had no reasonable cause to
believe such conduct was unlawful.
The registrant has entered into indemnification agreements with each of its
directors and executive officers.
The registrant maintains officers' and directors' liability insurance.
Pursuant to the Underwriting Agreement filed as Exhibit 1.1 hereto, the
Underwriters agree to indemnify, under certain conditions, the registrant, its
officers and directors and persons who control the registrant within the meaning
of the Securities Act against certain liabilities.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- --------- --------------------------------------------------------------------------------------------------
<C> <S>
1.1 Form of Underwriting Agreement.
3.1** Certificate of Incorporation of the Company, as amended and restated on April 3, 1996.
3.2** Bylaws, as amended.
4.1** Specimen Certificate for Common Stock.
5.1*** Opinion of Brobeck, Phleger & Harrison LLP.
23.1*** Consent of Price Waterhouse LLP.
23.2*** Consent of Brobeck, Phleger & Harrison LLP (included in the opinion filed herewith as Exhibit
5.1).
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- --------- --------------------------------------------------------------------------------------------------
<C> <S>
24.1*** A power of attorney pursuant to which amendments to this Registration Statement may be filed
(included on the signature page contained in Part II of this Registration Statement).
</TABLE>
- ---------
** Previously filed with the Securities and Exchange Commission as an exhibit
to registrant's Registration Statement on Form S-1 (Registration Statement
No. 333-3386).
*** Previously filed as an exhibit to this Registration Statement.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act), that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the Delaware General Corporation Law, the Certificate of
Incorporation, as amended, or the Bylaws, as amended, of the registrant, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act, and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
The undersigned registrant hereby undertakes that:
For purposes of determining any liability under the Securities Act, the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
For the purposes of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial BONA FIDE offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Round Rock, State of Texas, on this 28th day of May,
1998.
<TABLE>
<S> <C> <C>
DUPONT PHOTOMASKS, INC.
By: /s/ JOHN M. LYNN
-----------------------------------------
John M. Lynn
EXECUTIVE VICE PRESIDENT, GENERAL
COUNSEL AND SECRETARY
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
SIGNATURE TITLE DATE
- ------------------------------ -------------------------- -------------------
Chairman of the Board and
J. MICHAEL HARDINGER* Chief Executive Officer
- ------------------------------ and Director (Principal May 28, 1998
J. Michael Hardinger executive officer)
Executive Vice
President--Finance and
DAVID S. GINO* Chief Financial Officer
- ------------------------------ (Principal financial May 28, 1998
David S. Gino officer and accounting
officer)
JOHN L. DOYLE*
- ------------------------------ Director May 28, 1998
John L. Doyle
JOHN W. HIMES*
- ------------------------------ Director May 28, 1998
John W. Himes
JOHN C. HODGSON*
- ------------------------------ Director May 28, 1998
John C. Hodgson
GARY W. PANKONIEN*
- ------------------------------ Director May 28, 1998
Gary W. Pankonien
II-4
<PAGE>
SIGNATURE TITLE DATE
- ------------------------------ -------------------------- -------------------
JOHN C. SARGENT*
- ------------------------------ Director May 28, 1998
John C. Sargent
MARSHALL C. TURNER*
- ------------------------------ Director May 28, 1998
Marshall C. Turner
SUSAN A. VLADUCHICK*
- ------------------------------ Director May 28, 1998
Susan A. Vladuchick
*By: /s/ JOHN M. LYNN
-------------------------
John M. Lynn
ATTORNEY-IN-FACT
II-5
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- --------- --------------------------------------------------------------------------------------------------
<C> <S>
1.1 Form of Underwriting Agreement.
3.1** Certificate of Incorporation of the Company, as amended and restated on April 3, 1996.
3.2** Bylaws, as amended.
4.1** Specimen Certificate for Common Stock.
5.1*** Opinion of Brobeck, Phleger & Harrison LLP.
23.1*** Consent of Price Waterhouse LLP.
23.2*** Consent of Brobeck, Phleger & Harrison LLP (included in the opinion filed herewith as Exhibit
5.1).
24.1*** A power of attorney pursuant to which amendments to this Registration Statement may be filed
(included on the signature page contained in Part II of this Registration Statement).
</TABLE>
- ---------
** Previously filed with the Securities and Exchange Commission as an exhibit
to registrant's Registration Statement on Form S-1 (Registration Statement
No. 333-3386).
*** Previously filed as an exhibit to this Registration Statement.
<PAGE>
Draft of May __, 1998
2,700,000 Shares
DUPONT PHOTOMASKS, INC.
Common Stock, $.01 par value
UNDERWRITING AGREEMENT
May __, 1998
<PAGE>
May __, 1998
Morgan Stanley & Co. Incorporated
Deutsche Morgan Grenfell Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
NationsBanc Montgomery Securities LLC
Needham & Company, Inc.
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Morgan Stanley & Co. International Limited
Deutsche Bank AG London
Donaldson, Lufkin & Jenrette International
NationsBanc Montgomery Securities LLC
Needham & Company, Inc.
c/o Morgan Stanley & Co. International Limited
25 Cabot Square
Canary Wharf
London E14 4QA England
Dear Sirs and Mesdames:
DuPont Photomasks, Inc., a Delaware corporation (the "COMPANY"),
proposes to issue and sell to the several Underwriters (as defined below),
and DuPont Chemical and Energy Operations, Inc. ("DCEO"), a Delaware
Corporation and wholly owned subsidiary of E. I. du Pont de Nemours and
Company, a Delaware Corporation ("DUPONT"), proposes to sell to the several
Underwriters, an aggregate of 2,700,000 shares of the Common Stock, $.01
par value per share of the Company (the "FIRM SHARES"), of which 700,000
shares are to be issued and sold by the Company and 2,000,000 shares are to
be sold by DCEO.
It is understood that, subject to the conditions hereinafter stated,
2,160,000 Firm Shares (the "U.S. FIRM SHARES") will be sold to the
several U.S. Underwriters named in Schedule I hereto (the "U.S.
UNDERWRITERS") in
<PAGE>
connection with the offering and sale of such U.S. Firm Shares in the
United States and Canada to United States and Canadian Persons (as such
terms are defined in the Agreement Between U.S. and International
Underwriters of even date herewith), and 540,000 Firm Shares (the
"INTERNATIONAL SHARES") will be sold to the several International
Underwriters named in Schedule II hereto (the "INTERNATIONAL UNDERWRITERS")
in connection with the offering and sale of such International Shares
outside the United States and Canada to persons other than United States
and Canadian Persons. Morgan Stanley & Co. Incorporated, Deutsche Morgan
Grenfell Inc., Donaldson, Lufkin & Jenrette Securities Corporation,
NationsBanc Montgomery Securities LLC and Needham & Company, Inc. shall act
as representatives (the "U.S. REPRESENTATIVES") of the several U.S.
Underwriters, and Morgan Stanley & Co. International Limited, Deutsche
Bank AG London, Donaldson, Lufkin & Jenrette International, NationsBanc
Montgomery Securities LLC and Needham & Company, Inc. shall act as
representatives (the "INTERNATIONAL REPRESENTATIVES") of the several
International Underwriters. The U.S. Underwriters and the International
Underwriters are hereinafter collectively referred to as the
"UNDERWRITERS."
The Company also proposes to issue and sell to the several U.S.
Underwriters, and DCEO proposes to sell to the several U.S.
Underwriters, not more than an aggregate of an additional 405,000 shares
of the Common Stock, $.01 par value per share, of the Company (the
"ADDITIONAL SHARES"), of which up to 105,000 shares are to be issued and
sold by the Company and up to 300,000 shares are to be sold by DCEO, if
and to the extent that the U.S. Representatives shall have determined to
exercise, on behalf of the U.S. Underwriters, the right to purchase such
Additional Shares granted to the U.S. Underwriters in Section 3 hereof.
The Firm Shares and the Additional Shares are hereinafter collectively
referred to as the "SHARES." The shares of Common Stock, $.01 par value
per share, of the Company to be outstanding after giving effect to the
sales contemplated hereby are hereinafter referred to as the "COMMON
STOCK." The Company and DCEO are hereinafter sometimes collectively
referred to as the "SELLERS."
The Company has filed with the Securities and Exchange Commission
(the "COMMISSION") a registration statement relating to the Shares. The
registration statement contains two prospectuses to be used in
connection with the offering and sale of the Shares: the U.S.
prospectus, to be used in connection with the offering and sale of
Shares in the United States and Canada to United States and Canadian
Persons, and the international prospectus, to be used in connection with
the offering and sale of Shares outside the United States and Canada to
persons other than United States and Canadian Persons. The
international prospectus is identical to the U.S. prospectus except for
the outside front cover page. The registration statement as amended at
the time it becomes effective,
2
<PAGE>
including the information (if any) deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), is
hereinafter referred to as the "REGISTRATION STATEMENT"; the U.S.
prospectus and the international prospectus in the respective forms
first used to confirm sales of Shares are hereinafter collectively
referred to as the "PROSPECTUS." If the Company has filed an
abbreviated registration statement to register additional shares of
Common Stock pursuant to Rule 462(b) under the Securities Act (the "RULE
462 REGISTRATION STATEMENT"), then any reference herein to the term
"REGISTRATION STATEMENT" shall be deemed to include such Rule 462
Registration Statement (including, in the case of all references to the
Registration and the Prospectus, documents incorporated therein by
reference). The terms "SUPPLEMENT" and "AMENDMENT" or "AMEND" as used
in this Agreement shall include all documents subsequently filed by the
Company with the Commission pursuant to the Securities Exchange Act of
1934, as amended, (the "EXCHANGE ACT") that are deemed to be
incorporated by reference in the Prospectus.
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND DUPONT. The
Company and DuPont, jointly and severally, represent and warrant to and
agree with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement
is in effect, and no proceedings for such purpose are pending
before or threatened by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant
to the Exchange Act and incorporated by reference in the
Prospectus complied or will comply when so filed in all material
respects with the Exchange Act and the applicable rules and
regulations of the Commission thereunder, (ii) the Registration
Statement, when it became effective, did not contain and, as
amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading, (iii) the Registration
Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects
with the Securities Act and the applicable rules and regulations
of the Commission thereunder and (iv) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements therein, in the
light of the
3
<PAGE>
circumstances under which they were made, not misleading, except
that the representations and warranties set forth in this Section
1(b) do not apply to statements or omissions in the Registration
Statement or the Prospectus based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter
through you expressly for use therein.
(c) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and the
Subsidiaries (as defined below), taken as a whole.
(d) Each Subsidiary has been duly incorporated or organized,
is validly existing as a corporation, partnership or limited
liability company in good standing under the laws of the
jurisdiction of its incorporation or organization, as the case
may be, has the power and authority to own its property and to
conduct its business and is duly qualified to transact business
and is in good standing in each jurisdiction in which the conduct
of its business or its ownership or leasing of property requires
such qualification, except to the extent that the failure to be
so qualified or be in good standing would not have a material
adverse effect on the Company and the Subsidiaries, taken as a
whole. As used herein, "SUBSIDIARY" shall mean DuPont Photomasks
Delaware, Inc., DuPont Photomasks(France)S.A., DuPont Photomasks,
Korea Ltd., DuPont Photomasks GmbH & Co. KG (Germany), DuPont
Photomasks Company, Ltd., Shanghai, DuPont Photomasks, U.K. Ltd.,
DuPont Photomasks Foreign Sales Corporation, DuPont Dai Nippon
Engineering and DPI Reticle Technology Center, L.L.C. The
Company does not own or control, directly or indirectly, any
corporation, association, partnership or other entity, and does
not participate in any joint venture, other than the Subsidiaries.
(e) This Agreement has been duly authorized, executed and
delivered by the Company.
4
<PAGE>
(f) The authorized capital stock of the Company conforms as
to legal matters to the description thereof contained in the
Prospectus.
(g) The shares of Common Stock (including the Shares to be
sold by DCEO) outstanding prior to the issuance of the Shares to
be sold by the Company have been duly authorized and are validly
issued, fully paid and non-assessable.
(h) The Shares to be sold by the Company have been duly
authorized and, when issued and delivered in accordance with the
terms of this Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of such Shares will not be
subject to any preemptive or similar rights.
(i) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this
Agreement will not contravene any provision of applicable law or
the certificate of incorporation or by-laws of the Company or any
agreement or other instrument binding upon the Company or any of
the Subsidiaries that is material to the Company and the
Subsidiaries, taken as a whole, or any judgment, order or decree
of any governmental body, agency or court having jurisdiction
over the Company or any Subsidiary, and no consent, approval,
authorization or order of, or qualification with, any
governmental body or agency is required for the performance by
the Company of its obligations under this Agreement, except such
as may be required by the securities or Blue Sky laws of the
various states and foreign jurisdictions in connection with the
offer and sale of the Shares.
(j) There has not occurred any material adverse change, or
any development involving a prospective material adverse change,
in the condition, financial or otherwise, or in the earnings,
business or operations of the Company and the Subsidiaries, taken
as a whole, from that set forth in the Prospectus (exclusive of
any amendments or supplements thereto subsequent to the date of
this Agreement).
(k) Each of the Company and the Subsidiaries has all
necessary consents, authorizations, approvals, orders,
certificates and permits of and from, and has made all
declarations and filings with, all federal, state, local, foreign
and other governmental
5
<PAGE>
authorities, all self-regulatory organizations and all courts and
other tribunals, to own, lease, license and use its properties and
assets and to conduct its business in the manner described in the
Prospectus, except to the extent that the failure to obtain, declare
or file would not, singly or in the aggregate, have a material
adverse effect on the Company and the Subsidiaries, taken as a
whole.
(l) There are no legal or governmental proceedings pending
or, to the Company's knowledge, threatened to which the Company
or any of the Subsidiaries is a party or to which any of the
properties of the Company or any of the Subsidiaries is subject
that are required to be described in the Registration Statement
or the Prospectus and are not so described in all material
respects or any statutes, regulations, contracts or other
documents that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described in all material
respects or filed as required.
(m) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the
Securities Act, complied when so filed in all material respects
with the Securities Act and the applicable rules and regulations
of the Commission thereunder.
(n) The Company is not and, after giving effect to the
offering and sale of the Shares and the application of the
proceeds as described in the Prospectus, will not be an
"INVESTMENT COMPANY" as such term is defined in the Investment
Company Act of 1940, as amended.
(o) The Company and the Subsidiaries (i) are in compliance
with any and all applicable foreign, federal, state and local
laws and regulations relating to the protection of human health
and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS"), (ii)
have received all permits, licenses or other approvals required
of them under applicable Environmental Laws to conduct their
respective businesses and (iii) are in compliance with all terms
and conditions of any such permit, license or approval, except
where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure
to comply with the terms and conditions of such permits, licenses
or
6
<PAGE>
approvals would not, singly or in the aggregate, have a material
adverse effect on the Company and the Subsidiaries, taken as a
whole.
(p) In the ordinary course of its business, the Company
conducts a periodic review of the effect of Environmental Laws on
the business, operations and properties of the Company and the
Subsidiaries, in the course of which it identifies and evaluates
associated costs and liabilities (including, without limitation,
any capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental Laws or
any permit, license or approval, any related constraints on
operating activities and any potential liabilities to third
parties). On the basis of the last such review so completed, the
Company has reasonably concluded that such associated costs and
liabilities would not, singly or in the aggregate, have a
material adverse effect on the Company and the Subsidiaries,
taken as a whole, except as described in the Registration
Statement or Prospectus.
(q) Each of the Company and the Subsidiaries owns or
possesses adequate licenses or other rights to use all patents,
patent rights, inventions, trade secrets, technology, know-how,
trademarks, service marks, trade names and copyrights which are
necessary to conduct its businesses as described in the
Registration Statement and Prospectus, and the expiration of any
patents, patent rights, trade secrets, trademarks, service marks,
trade names or copyrights would not have a material adverse
effect on the Company and the Subsidiaries, taken as a whole.
The Company has not received any notice of, and has no knowledge
of, any infringement of or conflict with asserted rights of
others with respect to, any patents, patent rights, inventions,
trade secrets, technology, know-how, trademarks, service marks,
trade names which, singly or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, might have a material
adverse effect on the Company and the Subsidiaries, taken as a
whole.
(r) There are no contracts, agreements or understandings
between the Company and any person granting such person the right
to require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company or
to require the Company to include such securities with the Shares
registered pursuant to the Registration Statement
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other than the rights of DCEO and its assignees as described in the
Prospectus.
2. REPRESENTATIONS AND WARRANTIES OF DCEO AND DUPONT. DCEO and
DuPont, jointly and severally represent and warrant to and agree with each
of the Underwriters that:
(a) This Agreement has been duly authorized, executed and
delivered by or on behalf of each of DCEO and DuPont.
(b) The execution and delivery by each of DCEO and DuPont of,
and the performance by DCEO and DuPont of their respective
obligations under, this Agreement will not contravene any
provision of applicable law, or the certificate of incorporation
or by-laws of DCEO or DuPont (if such entity is a corporation),
or any agreement or other instrument binding upon DCEO or DuPont
or any judgment, order or decree of any governmental body, agency
or court having jurisdiction over DCEO or DuPont, and no consent,
approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by
DCEO or DuPont of their respective obligations under this
Agreement, except such as may be required by the securities or
Blue Sky laws of the various states in connection with the offer
and sale of the Shares.
(c) DCEO has, and on the Closing Date will have, valid title
to the Shares to be sold by it and the legal right and power, and
all authorization and approval required by law, to enter into
this Agreement, and to sell, transfer and deliver the Shares to
be sold by it.
(d) The Shares to be sold by DCEO pursuant to this Agreement
have been duly authorized by the Company and are validly issued,
fully paid and non-assessable.
(e) Assuming the Underwriters have no notice of any adverse
claim, delivery of the Shares to be sold by DCEO pursuant to this
Agreement will pass title to such Shares free and clear of any
security interests, claims, liens, equities and other
encumbrances.
3. AGREEMENTS TO SELL AND PURCHASE. Each Seller, severally and not
jointly, hereby agrees to sell to the several Underwriters, and each
Underwriter, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agrees,
severally and not jointly, to purchase from such Seller at $______ a
share (the "PURCHASE PRICE") the respective
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number of Firm Shares (subject to such adjustments to eliminate fractional
shares as you may determine) that bears the same proportion to the number
of Firm Shares to be sold by such Seller as the number of Firm Shares set
forth in Schedules I and II hereto opposite the name of such Underwriter
bears to the total number of Firm Shares.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees
to issue and sell to the U.S. Underwriters up to 105,000 Additional
Shares, DCEO agrees to sell to the U.S. Underwriters up to 300,000
Additional Shares and the U.S. Underwriters shall have a one-time right
to purchase, severally and not jointly, up to an aggregate of 405,000
Additional Shares at the Purchase Price. If the U.S. Representatives,
on behalf of the U.S. Underwriters, elect to exercise such option, the
U.S. Representatives shall so notify the Sellers in writing not later
than 30 days after the date of this Agreement, which notice shall
specify the number of Additional Shares to be purchased by the U.S.
Underwriters and the date on which such shares are to be purchased.
Such date may be the same as the Closing Date (as defined below) but not
earlier than the Closing Date nor later than ten business days after the
date of such notice. Additional Shares may be purchased as provided in
Section 5 hereof solely for the purpose of covering over-allotments made
in connection with the offering of the Firm Shares. If any Additional
Shares are to be purchased, (i) each Seller agrees, severally and not
jointly, to sell to the U.S. Underwriters the Additional Shares pro rata
in proportion to the maximum number of Additional Shares such Seller has
agreed to sell (subject to such adjustments to eliminate fractional
shares as the U.S. Representatives may determine), and (ii) each U.S.
Underwriter agrees, severally and not jointly, to purchase from each
Seller the number of Additional Shares (subject to such adjustments to
eliminate fractional shares as the U.S. Representatives may determine)
that bears the same proportion to the total number of Additional Shares
to be sold by such Seller as the number of U.S. Firm Shares set forth in
Schedule I hereto opposite the name of such U.S. Underwriter bears to
the total number of U.S. Firm Shares.
Each of the Company, DCEO and DuPont hereby agrees that, without the
prior written consent of Morgan Stanley & Co. Incorporated on behalf of
the Underwriters, it will not, during the period ending 90 days after
the date of the Prospectus, (i) offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, lend or
otherwise transfer or dispose of, directly or indirectly, any shares of
Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (ii) enter into any swap or other
agreement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether any such
transaction described in
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clause (i) or (ii) above is to be settled by delivery of Common Stock or
such other securities, in cash or otherwise. The foregoing sentence shall
not apply to (A) the Shares to be sold hereunder, (B) the issuance by
the Company of any shares of Common Stock upon the exercise of an option
or warrant or the conversion of a security outstanding on the date
hereof of which the Underwriters have been advised in writing, (C)
transactions by any person other than the Company relating to shares of
Common Stock or other securities acquired in open market transactions
after the completion of the offering of the Shares or (D) the grant by
the Company of options to purchase shares of Common Stock or the
issuance by the Company of shares of Common Stock under the Company's
1997 Stock Option and Restricted Stock Plan or Amended Bonus Plan. In
addition, each of DCEO and DuPont agrees that, without the prior written
consent of Morgan Stanley & Co. Incorporated on behalf of the
Underwriters, it will not, during the period ending 90 days after the
date of the Prospectus, make any demand for, or exercise any right with
respect to, the registration of any shares of Common Stock or any
security convertible into or exercisable or exchangeable for Common
Stock.
4. TERMS OF PUBLIC OFFERING. The Sellers are advised by you that
the Underwriters propose to make a public offering of their respective
portions of the Shares as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable. The
Sellers are further advised by you that the Shares are to be offered to
the public initially at $_____ a share (the "PUBLIC OFFERING PRICE") and
to certain dealers selected by you at a price that represents a
concession not in excess of $____ a share under the Public Offering
Price, and that any Underwriter may allow, and such dealers may reallow,
a concession, not in excess of $____ a share, to any Underwriter or to
certain other dealers.
5. PAYMENT AND DELIVERY. Payment for the Firm Shares to be sold
by each Seller shall be made to such Seller in Federal or other funds
immediately available in New York City against delivery of such Firm
Shares for the respective accounts of the several Underwriters at the
office of Davis Polk & Wardwell, 450 Lexington Avenue, New York, New
York at 10:00 A.M., local time, on June __, 1998, or at such other time
on the same or such other date, not later than June __, 1998, as shall
be designated in writing by you. The time and date of such payment are
hereinafter referred to as the "CLOSING DATE."
Payment for any Additional Shares shall be made by certified or
official bank check or checks payable to the order of the Company in
Federal or other funds immediately available in New York City at the
office of Davis Polk & Wardwell, 450 Lexington Avenue, New York, New
York at 10:00 A.M., local time, on the date specified in the notice
described in Section 3 or on such other
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<PAGE>
date, in any event not later than July __, 1998, as shall be designated
in writing by the U.S. Representatives. The time and date of such payment
are hereinafter referred to as the "OPTION CLOSING DATE."
Certificates for the Firm Shares and Additional Shares shall be in
definitive form and registered in such names and in such denominations
as you shall request in writing not later than one full business day
prior to the Closing Date or the Option Closing Date, as the case may
be. The certificates evidencing the Firm Shares and Additional Shares
shall be delivered to you on the Closing Date or the Option Closing
Date, as the case may be, for the respective accounts of the several
Underwriters, with any transfer taxes payable in connection with the
transfer of the Shares to the Underwriters duly paid, against payment of
the Purchase Price therefor.
6. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS. The obligations
of the Sellers to sell the Shares to the Underwriters and the several
obligations of the Underwriters to purchase and pay for the Shares on
the Closing Date are subject to the condition that the Registration
Statement shall have become effective not later than 5:00 p.m. (New York
time) on the date hereof.
The several obligations of the Underwriters are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date:
(i) if applicable, there shall not have occurred any
downgrading, nor shall any notice have been given of any
intended or potential downgrading or of any review for a
possible change that does not indicate the direction of the
possible change, in the rating accorded any of the Company's
securities by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule
436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations of the Company and the Subsidiaries, taken as a
whole, from that set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of
this Agreement) that, in your judgment, is material and
adverse and that makes it, in
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<PAGE>
your judgment, impracticable to market the Shares on the terms
and in the manner contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer
of the Company, to the effect set forth in clause (a)(i) above and to
the effect that the representations and warranties of the Company
contained in this Agreement are true and correct as of the Closing
Date and that the Company has complied with all of the agreements and
satisfied all of the conditions on its part to be performed or
satisfied hereunder on or before the Closing Date.
The officer signing and delivering such certificate may rely upon
the best of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date an
opinion of Brobeck, Phleger & Harrison LLP, counsel for the Company,
dated the Closing Date, to the effect that:
(i) the Company is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation,
has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in the
states of Texas and California;
(ii) each Subsidiary of the Company that is a "significant
subsidiary" for purposes of Rule 1-02 of Regulation S-X of the
Securities Act (collectively, the "SIGNIFICANT SUBSIDIARIES") is
validly existing as a corporation or partnership in good standing
under the laws of the jurisdiction of its incorporation or
organization, as the case may be, has the power and authority to
own its property and to conduct its business and is duly
qualified to transact business and is in good standing in such
jurisdiction;
(iii) the authorized capital stock of the Company conforms as
to legal matters in all material respects to the description
thereof contained in the Prospectus;
(iv) the shares of Common Stock (including the Shares to be
sold by DCEO) outstanding prior to the issuance of
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<PAGE>
the Shares to be sold by the Company have been duly authorized
and are validly issued, fully paid and non-assessable;
(v) the Shares to be sold by the Company have been duly
authorized and, when issued and delivered in accordance with
the terms of this Agreement, will be validly issued, fully paid
and non-assessable, and the issuance of such Shares will not be
subject to any statutory preemptive or similar rights;
(vi) this Agreement has been duly authorized, executed and
delivered by the Company;
(vii) the statements (A) in the Prospectus under the
captions "Risk Factors--Potential Effect of Shares Eligible for
Future Sale; Registration Rights", "Management's Discussion and
Analysis of Financial Condition and Results of Operations--
Liquidity and Capital Resources," (but only with respect to the
second, third, fourth and sixth sentences of the fourth paragraph
thereof), "Patents, Copyrights, Trademarks and Licenses --
Corporate Trade Name and Trademark Agreement," "Transactions
and Relationships Between the Company and DuPont," "Certain U.
S. Federal Income Tax Considerations for Non-U.S. Holders of
Common Stock", "Description of Capital Stock," and
"Underwriters" and (B) in the Registration Statement in Item
15, in each case insofar as such statements constitute
summaries of the legal matters, documents or proceedings
referred to therein, fairly present in all material respects
the information called for with respect to such legal matters,
documents and proceedings and fairly summarize in all material
respects the matters referred to therein;
(viii) such counsel does not know of any legal or
governmental proceedings pending or threatened to which the
Company or any of the Subsidiaries is a party or to which any of
the properties of the Company or any of the Subsidiaries is
subject that are required to be described in the Registration
Statement or the Prospectus and are not so described or of any
statutes, regulations, contracts or other documents that are
required to be described in the
13
<PAGE>
Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not so
described or filed as required;
(ix) the Company is not and, after giving effect to the
offering and sale of the Shares and the application of the
proceeds as described in the Prospectus, will not be an
"INVESTMENT COMPANY" as such term is defined in the Investment
Company Act of 1940, as amended;
(x) such counsel (A) is of the opinion that the Registration
Statement and Prospectus (except for financial statements and
schedules and other financial or statistical data included
therein as to which such counsel need not express any opinion)
comply as to form in all material respects with the Securities
Act and the applicable rules and regulations of the Commission
thereunder, (B) has no reason to believe that (except for
financial statements and schedules and other financial or
statistical data included therein as to which such counsel need
not express any belief) the Registration Statement and the
prospectus included therein at the time the Registration
Statement became effective contained any untrue statement of a
material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein
not misleading and (C) has no reason to believe that (except
for financial statements and schedules and other financial or
statistical data included therein as to which such counsel
need not express any belief) the Prospectus contains any
untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading; and
(xi) the execution and delivery by the Company of, and the
performance by the Company of its obligations under this
Agreement will not contravene any provision of the laws of the
States of Texas or California or the General Corporation Law of
the State of Delaware, or the certificate of incorporation or
by-laws of the Company or, to the best of such counsel's
knowledge, any agreement filed as an exhibit to the Registration
Statement.
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With respect to the opinions set forth in subsection (ii) above, to
the extent such opinions address questions of law other than those of the
State of Texas, the State of California, or the General Corporation Law
of the State of Delaware, such counsel may deliver opinions of local
counsel as to such matters.
(d) The Underwriters shall have received on the Closing Date an
opinion of John M. Lynn, Esq., Executive Vice President, General
Counsel and Secretary of the Company, dated the Closing Date, to the
effect that:
(i) the Company has been duly incorporated and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be
in good standing would not have a material adverse effect on
the Company and the Subsidiaries, taken as a whole;
(ii) each Significant Subsidiary of the Company has been
duly incorporated or organized, is validly existing as a
corporation or partnership in good standing under the laws of
the jurisdiction of its incorporation or organization, as the
case may be, has the power and authority to own its property
and to conduct its business as described in the Prospectus and
is duly qualified to transact business and is in good standing
in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material
adverse effect on the Company and the Subsidiaries, taken as a
whole; the Company does not own or control, directly or
indirectly, any corporation, association, partnership or other
entity, and is not a participant in any joint venture, other
than the Subsidiaries;
(iii) such counsel (A) is of the opinion that each
document, if any, filed pursuant to the Exchange Act and
incorporated by reference in the Registration Statement and
the Prospectus (except for financial statements and schedules
and other financial and statistical data as to which such
counsel need not express any opinion) complied when so filed
as to form in all material respects with the Exchange Act and
the rules and regulations of the Commission thereunder, (B) is
of the opinion that the Registration Statement and Prospectus
(except for financial statements and
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<PAGE>
schedules and other financial and statistical data included
therein as to which such counsel need not express any opinion)
comply as to form in all material respects with the Securities
Act and the applicable rules and regulations of the Commission
thereunder, (C) has no reason to believe that (except for
financial statements and schedules and other financial and
statistical data as to which such counsel need not express any
belief) the Registration Statement and the prospectus included
therein at the time the Registration Statement became effective
contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary
to make the statements therein not misleading and (D) has no
reason to believe that (except for financial statements and
schedules as to which such counsel need not express any
belief) the Prospectus contains any untrue statement of a
material fact or omits to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(iv) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this
Agreement will not contravene any provision of applicable law
or the certificate of incorporation or by-laws of the Company
or, to the best of such counsel's knowledge, any agreement or
other instrument binding upon the Company or any of the
Subsidiaries that is material to the Company and the
Subsidiaries, taken as a whole, or, any judgment, order or
decree of any governmental body, agency or court known to such
counsel having jurisdiction over the Company or any
Subsidiary, and to such counsel's knowledge no consent,
approval, authorization or order of, or qualification with,
any governmental body or agency is required for the
performance by the Company of its obligations under this
Agreement, except such as may be required by the securities or
Blue Sky laws of the various states and foreign jurisdictions
in connection with the offer and sale of the Shares;
(v) each of the Company and the Significant Subsidiaries
has all necessary consents, authorizations, approvals, orders,
certificates and permits of and from, and has made all
declarations and filings with, all federal, state, local,
foreign and other governmental authorities, all
self-regulatory organizations and all courts and other
tribunals, to own, lease, license and use its properties and
assets and to conduct its business, except to the extent that
the failure to obtain or file would not, singly or in the
16
<PAGE>
aggregate, have a material adverse effect on the Company and
the Subsidiaries, taken as a whole;
(vi) the Company and the Significant Subsidiaries (A)
are in compliance with any and all applicable Environmental
Laws, (B) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws
to conduct their respective businesses and (C) are in
compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals
would not, singly or in the aggregate, have a material adverse
effect on the Company and the Significant Subsidiaries, taken
as a whole; and
(vii) each of the Company and the Significant Subsidiaries
owns or possesses adequate licenses or other rights to use all
patents, patent rights, inventions, trade secrets, technology,
know-how, trademarks, service marks, trade names and
copyrights which are necessary to conduct its businesses as
described in the Registration Statement and Prospectus; after
due inquiry, such counsel does not know of any notice received
by the Company of any infringement of or conflict with
asserted rights of others with respect to, any patents, patent
rights, inventions, trade secrets, technology, know-how,
trademarks, service marks, trade names which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling
or finding, might have a material adverse effect on the
Company and the Subsidiaries, taken as a whole.
With respect to the opinions set forth in subsection (ii) above, to
the extent such opinions address questions of law other than those of the
State of Texas, the State of California, or the General Corporation Law of
the State of Delaware, such counsel may deliver opinions of local counsel
as to such matters.
(e) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive
officer of DuPont, to the effect that the representations and
warranties of DuPont and DCEO contained in this Agreement are true
and correct as of the Closing Date and that the each of DuPont and
DCEO has complied in all material respects with all of the
agreements and satisfied all of the conditions on its part to be
performed or satisfied hereunder on or before the Closing Date.
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(f) The Underwriters shall have received on the Closing Date an
opinion of Donald P. McAviney, Senior Counsel for DuPont on behalf
of DCEO and DuPont, dated the Closing Date, to the effect that:
(i) this Agreement has been duly authorized, executed and
delivered by or on behalf of each of DCEO and DuPont;
(ii) the execution and delivery by each of DCEO and DuPont
of, and the performance by DCEO and DuPont of their respective
obligations under, this Agreement will not contravene any
provision of applicable law, or the certificate of
incorporation or by-laws of DCEO or DuPont, or, to the best of
such counsel's knowledge, any agreement or other instrument
binding upon DCEO or DuPont or, to the best of such counsel's
knowledge, any judgment, order or decree of any governmental
body, agency or court having jurisdiction over DCEO or DuPont,
and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is
required for the performance by DCEO or DuPont of their
respective obligations under this Agreement, except such as
may be required by the securities or Blue Sky laws of the
various states in connection with offer and sale of the Shares;
(iii) DCEO has valid title to the Shares to be sold by it
and the legal right and power, and all authorization and
approval required by law, to enter into this Agreement and to
sell, transfer and deliver the Shares to be sold by it; and
(iv) delivery of the Shares to be sold by DCEO pursuant to
this Agreement will pass title to such Shares free and clear
of any security interests, claims, liens, equities and other
encumbrances, assuming that the Underwriters do not have
notice of any adverse claim.
(g) The Underwriters shall have received on the Closing Date
an opinion of Davis Polk & Wardwell, counsel for the Underwriters,
dated the Closing Date, covering the matters referred to in
Sections 6(c)(v), 6(c)(vi), 6(c)(vii) (but only as to the
statements in the Prospectus under "UNDERWRITERS") and 6(c)(x)
above.
With respect to Section 6(c)(x) above, Brobeck, Phleger & Harrison LLP
may state that their opinion and belief are based upon their participation
in the preparation of the Registration Statement and
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Prospectus and any amendments or supplements thereto and documents
incorporated therein by reference and review and discussion of the contents
thereof, but is without independent check or verification except as
specified. With respect to clauses (B), (C) and (D) of Section 6(c)(x)
above, Davis Polk & Wardwell may state that their opinion and belief are
based upon their participation in the preparation of the Registration
Statement and Prospectus and any amendments or supplements thereto (other
than the documents incorporated by reference) and review and discussion
of the contents thereof (including documents incorporated therein by
reference), but are without independent check or verification except as
specified.
The opinion of Brobeck, Phleger & Harrison LLP, John M. Lynn, Esq. and
Donald P. McAviney described in Sections 6(c), 6(d) and 6(f) above shall be
rendered to the Underwriters at the request of the Company or DuPont, as
the case may be and shall so state therein.
(h) The Underwriters shall have received, on each of the date
hereof and the Closing Date, a letter dated the date hereof or the
Closing Date, as the case may be, in form and substance
satisfactory to the Underwriters, from Price Waterhouse LLP,
independent accountants, containing statements and information of
the type ordinarily included in accountants' "COMFORT LETTERS" to
underwriters with respect to the financial statements and certain
financial information contained in the Registration Statement and
the Prospectus; PROVIDED that the letter delivered on the Closing
Date shall use a "CUT-OFF DATE" not earlier than the date hereof.
(i) The "LOCK-UP" agreements, each substantially in the form of
Exhibit A hereto, between you and executive officers and directors
of the Company relating to sales and certain other dispositions of
shares of Common Stock or certain other securities, delivered to
you on or before the date hereof, shall be in full force and effect
on the Closing Date.
The several obligations of the U.S. Underwriters to purchase
Additional Shares hereunder are subject to the delivery to the U.S.
Representatives on the Option Closing Date of such documents as they may
reasonably request with respect to the good standing of the Company, the
due authorization and issuance of the Additional Shares and other matters
related to the issuance of the Additional Shares.
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7. COVENANTS OF THE COMPANY AND DUPONT. In further consideration of
the agreements of the Underwriters herein contained, the Company and, with
respect to Section 7(f) below, DuPont, covenants with each Underwriter as
follows:
(a) To furnish to you, without charge, a signed copy of the
Registration Statement (including exhibits thereto and documents
incorporated therein by reference) and for delivery to each other
Underwriter a conformed copy of the Registration Statement (without
exhibits thereto and including documents incorporated therein by
reference) and to furnish to you in New York City, without charge,
prior to 5:00 P.M. local time on the business day following the
date of this Agreement and during the period mentioned in Section
7(c) below, as many copies of the Prospectus and any supplements
and amendments thereto or to the Registration Statement as you may
reasonably request.
(b) Before amending or supplementing the Registration Statement
or the Prospectus, to furnish to you a copy of each such proposed
amendment or supplement and not to file any such proposed amendment
or supplement to which you reasonably object in writing, subject
however, to compliance with the Securities Act, the Exchange Act,
and the rules and regulations thereunder, and to file with the
Commission within the applicable period specified in Rule 424(b)
under the Securities Act any prospectus required to be filed
pursuant to such Rule.
(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall
occur or condition exist as a result of which it is necessary to
amend or supplement the Prospectus in order to make the statements
therein, in the light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading, or if, in the opinion of
counsel for the Underwriters, it is necessary to amend or
supplement the Prospectus to comply with applicable law, forthwith
to prepare, file with the Commission and furnish, at its own
expense, to the Underwriters and to the dealers (whose names and
addresses you will furnish to the Company) to which Shares may have
been sold by you on behalf of the Underwriters and to any other
dealers upon request, either amendments or supplements to the
Prospectus so that the statements in the Prospectus as so
20
<PAGE>
amended or supplemented will not, in the light of the circumstances
when the Prospectus is delivered to a purchaser, be misleading or
so that the Prospectus, as amended or supplemented, will comply
with law.
(d) To endeavor to qualify the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request.
(e) To make generally available to the Company's security
holders and to you as soon as practicable an earning statement
covering the twelve-month period ending June 30, 1999 that satisfies
the provisions of Section 11(a) of the Securities Act and the rules
and regulations of the Commission thereunder.
(f) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay
or cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including: (i) the fees,
disbursements and expenses of the Company's counsel, the Company's
accountants and counsel for DCEO and DuPont in connection with the
registration and delivery of the Shares under the Securities Act
and all other fees or expenses in connection with the preparation
and filing of the Registration Statement, any preliminary
prospectus, the Prospectus and amendments and supplements to any of
the foregoing, including all printing costs associated therewith,
and the mailing and delivering of copies thereof to the
Underwriters and dealers, in the quantities hereinabove specified,
(ii) all costs and expenses related to the transfer and delivery of
the Shares to the Underwriters, including any transfer or other
taxes payable thereon, (iii) the cost of printing or producing any
Blue Sky or Legal Investment memorandum in connection with the
offer and sale of the Shares under state securities laws and all
expenses in connection with the qualification of the Shares for
offer and sale under state securities laws as provided in Section
7(d) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection with
such qualification and in connection with the Blue Sky or Legal
Investment memorandum, (iv) all filing fees and reasonable fees and
disbursements of counsel to the Underwriters incurred in connection
with the review and qualification of the offering of the Shares by
the National Association of Securities Dealers, Inc., (v) all
expenses in
21
<PAGE>
connection with the offer and sale of the Shares outside the United
States, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection with
offers and sales outside the United States, (vi) all costs and
expenses incident to listing the Shares on the Nasdaq National
Market, (vii) the cost of printing certificates representing the
Shares, (viii) the costs and charges of any transfer agent,
registrar or depositary, (ix) the costs and expenses of the Company
relating to investor presentations on any "ROAD SHOW" undertaken in
connection with the marketing of the offering of the Shares,
including, without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of
any consultants engaged in connection with the road show
presentations with the prior approval of the Company, travel and
lodging expenses of the representatives and officers of the Company
and any such consultants, and the cost of any aircraft chartered in
connection with the road show, and (x) all other costs and expenses
incident to the performance of the obligations of the Company
hereunder for which provision is not otherwise made in this
Section. It is understood, however, that except as provided in
this Section, Section 8 entitled "INDEMNITY AND CONTRIBUTION", and
the last paragraph of Section 10 below, the Underwriters will pay
all of their costs and expenses, including fees and disbursements
of their counsel, stock transfer taxes payable on resale of any of
the Shares by them, and any advertising expenses connected with any
offers they may make.
The provisions of this Section shall not supercede or otherwise affect
any agreement that the Sellers may otherwise have for the allocation of
such expenses among themselves.
8. INDEMNITY AND CONTRIBUTION. (a) The Company and DuPont, jointly
and severally, agree to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange
Act, from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or
any amendment thereof, any preliminary prospectus or the Prospectus (as
amended or supplemented if the Company shall have furnished any
amendments or supplements thereto), or caused by any omission or alleged
omission to state therein a material fact required to be stated therein
or necessary
22
<PAGE>
to make the statements therein not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished to the Company in
writing by such Underwriter through you expressly for use therein;
PROVIDED that the foregoing indemnity agreement with respect to any
preliminary prospectus shall not inure to the benefit of any Underwriter
from whom the person asserting any such losses, claims, damages or
liabilities purchased Shares, or any person controlling such
Underwriter, if a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such
Underwriter to such person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of the
Shares to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such losses,
claims, damages or liabilities, unless such failure is the result of
noncompliance by the Company with Section 7(a) hereof.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, the directors of the Company, the
officers of the Company who sign the Registration Statement, and DuPont,
and each person, if any, who controls the Company or DuPont within the
meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the
Company and DuPont to such Underwriter but only with reference to
information relating to such Underwriter furnished to the Company in
writing by such Underwriter through you expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or
any amendments or supplements thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity
may be sought pursuant to Section 8(a) or 8(b), such person (the
"INDEMNIFIED PARTY") shall promptly notify the person against whom such
indemnity may be sought (the "INDEMNIFYING PARTY") in writing and the
indemnifying party, upon request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to represent
the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the reasonable fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the indemnifying party and
the indemnified party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such proceeding (including
any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing
23
<PAGE>
interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for (i) all
Underwriters and all persons, if any, who control any Underwriter within
the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act and (ii) the Company, its directors, its officers who
sign the Registration Statement, DuPont and each person, if any, who
controls the Company or DuPont within the meaning of either such Section
and that all such fees and expenses shall be reimbursed as they are
incurred. In the case of any such separate firm for the Underwriters
and such control persons of the Underwriters, such firm shall be
designated in writing by Morgan Stanley & Co. Incorporated. In the case
of any such separate firm for the Company and such directors, officers
and control persons of the Company such firm shall be designated in
writing by the Company. In the case of any such separate firm for
DuPont, and such directors, officers and control persons of DuPont, such
firm shall be designated in writing by DuPont. The indemnifying party
shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party
agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for
fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall
be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30 days
after receipt by such indemnifying party of the aforesaid request and
(ii) such indemnifying party shall not have reimbursed the indemnified
party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending
or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder
by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on
claims that are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in Section 8(a) or
8(b) is unavailable to an indemnified party or insufficient in respect
of any losses, claims, damages or liabilities referred to therein, then
each indemnifying party under such paragraph, in lieu of indemnifying
such indemnified party thereunder, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to
reflect the relative benefits received by the indemnifying party or
parties on the one hand and the indemnified party or
24
<PAGE>
parties on the other hand from the offering of the Shares or (ii) if the
allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative
fault of the indemnifying party or parties on the one hand and of the
indemnified party or parties on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations.
The relative benefits received by the Company and DuPont on the one hand
and the Underwriters on the other hand in connection with the offering
of the Shares shall be deemed to be in the same respective proportions
as the net proceeds from the offering of the Shares (before deducting
expenses) received by the Company and DCEO and the total underwriting
discounts and commissions received by the Underwriters, in each case as
set forth in the table on the cover of the Prospectus, bear to the
aggregate Public Offering Price of the Shares. The relative fault of
the Company and DuPont on the one hand and the Underwriters on the other
hand shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company or DuPont or by the Underwriters and
the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
Underwriters' respective obligations to contribute pursuant to this
Section 8 are several in proportion to the respective number of Shares
they have purchased hereunder, and not joint.
(e) The Company, DuPont and the Underwriters agree that it would not
be just or equitable if contribution pursuant to this Section 8 were
determined by PRO RATA allocation (even if the Underwriters were treated
as one entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations referred to
in Section 8(d). The amount paid or payable by an indemnified party as
a result of the losses, claims, damages and liabilities referred to in
the immediately preceding paragraph shall be deemed to include, subject
to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding
the provisions of this Section 8, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price
at which the Shares underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
remedies provided for in this
25
<PAGE>
Section 8 are not exclusive and shall not limit any rights or remedies
which may otherwise be available to any indemnified party at law or in
equity.
(f) The indemnity and contribution provisions contained in this
Section 8 and the representations, warranties and other statements of
the Company, DCEO and DuPont contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any termination
of this Agreement, (ii) any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter, or the Company,
its officers or directors or any person controlling the Company or
DuPont, its officers or directors or any person controlling DuPont and
(iii) acceptance of and payment for any of the Shares.
9. TERMINATION. This Agreement shall be subject to termination by
notice given by you to the Company, if (a) after the execution and
delivery of this Agreement and prior to the Closing Date (i) trading
generally shall have been suspended or materially limited on or by, as
the case may be, any of the New York Stock Exchange, the American Stock
Exchange, the National Association of Securities Dealers, Inc., the
Chicago Board of Options Exchange, the Chicago Mercantile Exchange or
the Chicago Board of Trade, (ii) trading of any securities of the
Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial
banking activities in New York shall have been declared by either
Federal or New York State authorities or (iv) there shall have occurred
any outbreak or escalation of hostilities or any change in financial
markets or any calamity or crisis that, in your judgment, is material
and adverse and (b) in the case of any of the events specified in
clauses 9(a)(i) through 9(a)(iv), such event, singly or together with
any other such event, makes it, in your judgment, impracticable to
market the Shares on the terms and in the manner contemplated in the
Prospectus.
10. EFFECTIVENESS; DEFAULTING UNDERWRITERS. This Agreement shall
become effective upon the execution and delivery hereof by the parties
hereto.
If, on the Closing Date or the Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase
Shares that it has or they have agreed to purchase hereunder on such
date, and the aggregate number of Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is
not more than one-tenth of the aggregate number of the Shares to be
purchased on such date, the other Underwriters shall be obligated
severally in the proportions that the number of Firm Shares set forth
opposite their respective names in Schedule I or Schedule II bears to
the aggregate number of Firm Shares set forth opposite the names of all
such non-defaulting Underwriters, or in such other proportions as you
may specify, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or
26
<PAGE>
refused to purchase on such date; PROVIDED that in no event shall the
number of Shares that any Underwriter has agreed to purchase pursuant to
this Agreement be increased pursuant to this Section 10 by an amount in
excess of one-ninth of such number of Shares without the written consent
of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Firm Shares and the
aggregate number of Firm Shares with respect to which such default
occurs is more than one-tenth of the aggregate number of Firm Shares to
be purchased, and arrangements satisfactory to you, the Company and DCEO
for the purchase of such Firm Shares are not made within 36 hours after
such default, this Agreement shall terminate without liability on the
part of any non-defaulting Underwriter, the Company or DCEO. In any such
case either you, the Company or DCEO shall have the right to postpone
the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement and in
the Prospectus or in any other documents or arrangements may be
effected. If, on the Option Closing Date, any U.S. Underwriter or U.S.
Underwriters shall fail or refuse to purchase Additional Shares and the
aggregate number of Additional Shares with respect to which such default
occurs is more than one-tenth of the aggregate number of Additional
Shares to be purchased, the non-defaulting U.S. Underwriters shall have
the option to (i) terminate their obligation hereunder to purchase
Additional Shares or (ii) purchase not less than the number of
Additional Shares that such non-defaulting U.S. Underwriters would have
been obligated to purchase in the absence of such default. Any action
taken under this paragraph shall not relieve any defaulting Underwriter
from liability in respect of any default of such Underwriter under this
Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company, DCEO
or DuPont to comply with the terms or to fulfill any of the conditions
of this Agreement, or if for any reason the Company, DCEO or DuPont
shall be unable to perform its obligations under this Agreement, the
Company, DCEO or DuPont will reimburse the Underwriters or such
Underwriters as have so terminated this Agreement with respect to
themselves, severally, for all out-of-pocket expenses (including the
fees and disbursements of their counsel) reasonably incurred by such
Underwriters in connection with this Agreement or the offering
contemplated hereunder.
11. COUNTERPARTS. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
12. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
27
<PAGE>
13. HEADINGS. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed
a part of this Agreement.
28
<PAGE>
Very truly yours,
DUPONT PHOTOMASKS, INC.
By: ________________________________
David S. Gino
Executive Vice President - Finance and
Chief Financial Officer
E.I. DU PONT DE NEMOURS AND COMPANY
By: ________________________________
Name:
Title:
DU PONT CHEMICAL AND ENERGY
OPERATIONS, INC.
By: ________________________________
Name:
Title:
<PAGE>
Accepted as of the date hereof.
MORGAN STANLEY & CO. INCORPORATED
DEUTSCHE MORGAN GRENFELL INC.
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
NATIONSBANC MONTGOMERY SECURITIES LLC
NEEDHAM & COMPANY, INC.
Acting severally on behalf of themselves and
several U.S. Underwriters named in
Schedule I hereto.
By: Morgan Stanley & Co. Incorporated
By: ______________________________
Name:
Title:
MORGAN STANLEY & CO. INTERNATIONAL LIMITED
DEUTSCHE BANK AG LONDON
DONALDSON, LUFKIN & JENRETTE INTERNATIONAL
NATIONSBANC MONTGOMERY SECURITIES LLC
NEEDHAM & COMPANY, INC.
Acting severally on behalf of themselves
and the several International Underwriters
named in Schedule II hereto.
By: Morgan Stanley & Co. International Limited
By: ____________________________
Name:
Title:
<PAGE>
SCHEDULE I
U.S. UNDERWRITERS
NUMBER OF FIRM SHARES
UNDERWRITERS TO BE PURCHASED
------------------------------------------------ -------------------------
Morgan Stanley & Co. Incorporated . . . . . .
Deutsche Morgan Grenfell Inc. . . . . . . . .
Donaldson, Lufkin & Jenrette
Securities Corporation . . . . . . . . . . .
NationsBanc Montgomery Securities LLC . . .
Needham & Company, Inc. . . . . . . . . . . .
-----------------------
Total U.S. Firm Shares . . . . . . . . 2,160,000
------------
------------
<PAGE>
SCHEDULE II
INTERNATIONAL UNDERWRITERS
NUMBER OF FIRM SHARES
UNDERWRITERS TO BE PURCHASED
---------------------------------------------- ------------------------
Morgan Stanley & Co. International Limited .
Deutsche Bank AG London. . . . . . . . . . .
Donaldson, Lufkin & Jenrette International .
NationsBanc Montgomery Securities LLC . . . .
Needham & Company, Inc. . . . . . . . . . . .
----------------------
Total International Firm Shares . . . . 540,000
----------
----------
<PAGE>
EXHIBIT A
[FORM OF LOCK-UP LETTER]
____________, 1998
Morgan Stanley & Co. Incorporated
Deutsche Morgan Grenfell Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
NationsBanc Montgomery Securities LLC
Needham & Company, Inc.
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, NY 10036
Morgan Stanley & Co. International Limited
Deutsche Bank AG London
Donaldson, Lufkin & Jenrette International
NationsBanc Montgomery Securities LLC
Needham & Company, Inc.
c/o Morgan Stanley & Co. International Limited
25 Cabot Square
Canary Wharf
London E14 4QA
England
Dear Sirs and Mesdames:
The undersigned understands that Morgan Stanley & Co. Incorporated ("MORGAN
STANLEY") and Morgan Stanley & Co. International Limited ("MSIL") propose to
enter into an Underwriting Agreement (the "UNDERWRITING AGREEMENT") with
DuPont Photomasks, Inc., a Delaware corporation (the "COMPANY"), DuPont
Chemical and Energy Operations, Inc., a Delaware corporation, and E.I. du
Pont de Nemours and Company, a Delaware corporation, providing for the public
offering (the "PUBLIC OFFERING") by the several Underwriters, including
Morgan Stanley and MSIL (the "UNDERWRITERS") of 2,700,000 shares (the
"SHARES") of the Common Stock, par value $.01 per share, of the Company (the
"COMMON STOCK").
<PAGE>
To induce the Underwriters that may participate in the Public Offering to
continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of Morgan
Stanley on behalf of the Underwriters, it will not, during the period
commencing on the date hereof and ending 90 days after the date of the final
prospectus relating to the Public Offering of the Shares (the "PROSPECTUS"),
(1) offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, lend or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, or (2) enter into any swap or
other agreement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise. The
foregoing sentence shall not apply to transactions relating to shares of
Common Stock or other securities acquired in open market transactions after
the completion of the Public Offering. In addition, the undersigned agrees
that, without the prior written consent of Morgan Stanley on behalf of the
Underwriters, it will not, during the period commencing on the date hereof
and ending 90 days after the date of the Prospectus, make any demand for or
exercise any right with respect to, the registration of any shares of Common
Stock or any security convertible into or exercisable or exchangeable for
Common Stock.
Whether or not the Public Offering actually occurs depends on a number of
factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
Very truly yours,
_____________________________
Name
_____________________________
Address
