FIRST AMENDMENT TO RIGHTS AGREEMENT
This FIRST AMENDMENT TO RIGHTS AGREEMENT, dated as of June 13, 2000,
between DYNAMIC MATERIALS CORPORATION, a Delaware corporation (the "Company"),
and XXXXXX TRUST & SAVINGS BANK, an Illinois banking corporation, as rights
agent (the "Rights Agent") (the Company and the Rights Agent are herein
collectively referred to as the "Parties").
RECITALS
The Company and the Rights Agent are parties to that certain Rights
Agreement, dated as of January 8, 1999 (the "Rights Agreement").
The Company and SNPE, Inc., a Delaware corporation ("SNPE"), are parties to
that certain Stock Purchase Agreement, dated as of January 20, 2000 (the "Stock
Purchase Agreement"), under which (i) SNPE has agreed to purchase and the
Company has agreed to sell 2,109,091 shares of the Company's common stock and
(ii) the Company has agreed to issue a promissory note to the order of SNPE in
the amount of $1,200,000, which note is convertible into shares of the Company's
common stock.
Pursuant to Section 7.8 of the Stock Purchase Agreement, the Company has
agreed to amend the Rights Agreement to provide that the transactions
contemplated by the Stock Purchase Agreement and other acquisitions of the
Company's common stock contemplated by the Stock Purchase Agreement will not
cause the Rights (as defined in the Rights Agreement) to become exercisable.
Pursuant to Section 27 of the Rights Agreement, the Company has delivered
to the Rights Agent a certificate executed by an appropriate officer of the
Company stating that this Amendment is in compliance with the terms thereof, and
the Rights Agent has determined that it will not require the delivery of an
opinion of counsel as set forth in the penultimate sentence of Section 27, prior
to granting its consent to this Amendment.
Pursuant to the authority granted under Section 27 of the Rights Agreement,
the Parties agree to amend the Rights Agreement as set forth hereinbelow.
AGREEMENT
In consideration of the premises and covenants herein contained and for
good and valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the Parties hereby agree as follows:
1. Acquiring Person. Section 1(a) of the Rights Agreement is hereby amended
as follows:
A. A new Section 1(a)(ii) is added as follows:
(ii) SNPE, Inc., a Delaware corporation ("SNPE") (and any
successor thereto, but no purchaser or assignee thereof or purchaser
or assignee of any Common Shares of the Company held by SNPE), with
regard to (v) the Common Shares of the Company owned by SNPE
immediately prior to the closing of the Stock Purchase Agreement, (w)
2,109,091 Common Shares of the Company issued to SNPE pursuant to the
Stock Purchase Agreement, (x) the convertible subordinated note
pursuant to the Stock Purchase Agreement made by the Company to the
order of SNPE, dated as of June 14, 2000 (the "Note"), which Note is
convertible into 200,000 Common Shares of the Company at a conversion
price of $6.00 per share, subject to adjustment, (y) the issuance of
Common Shares of the Company pursuant to the conversion of the Note,
and (z) the purchase of any Common Shares of the Company by SNPE that
SNPE deems necessary to maintain SNPE's Beneficial Ownership of the
Common Shares in an amount not less than 50.1% of the Common Shares of
the Company then outstanding (excluding for purposes of such
calculation the number of Common Shares of the Company which SNPE
shall be entitled to receive upon conversion of the Note), (shares
acquired by SNPE as described in subparagraphs (v), (w), (x), (y) and
(z) above being referred to collectively as the "Permitted Shares").
Notwithstanding the foregoing, SNPE shall not become an "Acquiring
Person" as the result of an acquisition of Common Shares by the
Company which, by reducing the number of shares outstanding, increases
the proportionate number of shares beneficially owned by SNPE to more
than 50.1% of the Common Shares of the Company then outstanding;
provided, however, that if SNPE shall become the Beneficial Owner of
50.1% or more of the Common Shares of the Company then outstanding by
reason of share purchases by the Company, and shall, after such share
purchases by the Company, become the Beneficial Owner of any
additional Common Shares of the Company other than Permitted Shares,
then SNPE shall be deemed an "Acquiring Person." If the Board of
Directors of the Company determines in good faith that SNPE has
inadvertently acquired Common Shares of the Company in excess of the
Permitted Shares and if SNPE divests itself as promptly as practical
of beneficial ownership of a sufficient number of Common Shares so
that SNPE would no longer be an Acquiring Person, then SNPE shall not
be deemed to have become an Acquiring Person for any purpose in this
Agreement.
B. The subsection currently numbered Section 1(a)(ii) is hereby
renumbered as subsection Section 1(a)(iii), and all references thereto are
changed accordingly.
2. Distribution Date. Section 3(a) of the Rights Agreement is hereby
amended as follows:
A. Each reference in Section 3(a) of the Rights Agreement to "an
Exempt Person or Heartland" shall be deleted and replaced with the following:
"an Exempt Person, Heartland, or SNPE."
-2-
B. Section 3(a)(iii) is hereby deleted in its entirety. The comma
after the term "Acquisition Date" at the end of Section 3(a)(i) is hereby
deleted and replaced with the word "or," and the word "or" at the end of Section
3(a)(ii) is deleted and replaced with a period after the phrase "then
outstanding."
3. Counterparts. This Amendment may be executed in two or more
counterparts, each of which shall be deemed to be an original, and such
counterparts shall together constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties have executed this First Amendment to
Rights Agreement as of the date first written above.
DYNAMIC MATERIALS CORPORATION,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
XXXXXX TRUST & SAVINGS BANK,
an Illinois banking corporation,
as Rights Agent
By: /s/ Xxxxxxxx Xxxxx-Xxxx
--------------------------------------
Name: Xxxxxxxx Xxxxx-Xxxx
Title: Trust Officer
-3-
