REGISTRATION RIGHTS AGREEMENT
Dated as of June 14, 2000
between
DYNAMIC MATERIALS CORPORATION
and
SNPE, INC.
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS 1
ARTICLE II REGISTRATION RIGHTS.................................................4
SECTION 2.1. Registration on Demand.........................................4
2.1.1. Demand.........................................................4
2.1.2. Shelf Registration.............................................4
2.1.3. Registration Statement Form....................................4
2.1.4. Effective Registration Statement...............................5
2.1.5. Limitations on Registration on Demand, Shelf Registrations.....5
2.1.6. Holder's Ability to Withdraw Registration Statement............5
2.1.7. Selection of Underwriter.......................................6
2.1.8. Registration of Other Securities...............................6
2.1.9. Suspension.....................................................6
SECTION 2.2. Incidental Registration........................................6
SECTION 2.3. Registration Procedures........................................7
SECTION 2.4. Expenses......................................................11
SECTION 2.5. Marketing Restrictions........................................12
SECTION 2.6. Termination of Rights.........................................13
SECTION 2.7. Rule 144......................................................13
SECTION 2.8. Indemnification...............................................14
ARTICLE III CHANGES IN COMPANY COMMON STOCK...................................18
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY......................19
ARTICLE V BENEFITS OF AGREEMENT...............................................20
ARTICLE VI MISCELLANEOUS......................................................20
SECTION 6.1. Notices......................................................20
SECTION 6.2. Waivers; Amendments..........................................20
SECTION 6.3. Governing Law................................................21
SECTION 6.4. Survival of Agreements; Representations and
Warranties, etc..............................................21
SECTION 6.5. Covenants to Bind Successors and Assigns.....................21
SECTION 6.6. Severability.................................................21
SECTION 6.7. Section Headings.............................................21
SECTION 6.8. Counterparts.................................................21
SECTION 6.9. Termination..................................................22
SECTION 6.10. Complete Agreement...........................................22
SECTION 6.11. No Inconsistent Agreements...................................22
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of June 14,
2000, is made and entered into by and between Dynamic Materials Corporation, a
Delaware corporation (the "Company"), and SNPE, Inc., a Delaware corporation
(the "Holder").
WHEREAS, the Company is issuing to the Holder, on the date hereof,
2,109,091 shares (the "Shares") of Common Company stock of the Company, par
value $.05 per share (the "Company Common Stock" (as defined in the Stock
Purchase Agreement)) pursuant to a Stock Purchase Agreement dated as of January
20, 2000 between the Company and the Holder, as amended by Amendment No. 1 to
the Stock Purchase Agreement, dated as of April 20, 2000 (the "Stock Purchase
Agreement"); and
WHEREAS, concurrently with the issuance of the Shares, the Company is
entering into this Agreement to define the rights that exist among the Holder on
the one hand, and the Company, on the other, with respect to the registration of
the Registrable Securities (as defined herein);
WHEREAS, contemporaneously with the purchase of the Shares under the Stock
Purchase Agreement, the Holder will purchase from the Company a Convertible
Subordinated Note (the "Note") in the aggregate principal amount of $1,200,000,
convertible into additional shares of Company Common Stock ("Additional Shares")
(collectively, the Shares and Additional Shares are the "Company Shares") and
having such other terms as the parties have agreed (collectively, the 2,109,091
Shares of Company Common Stock and the Additional Shares are referred to herein
as the "Shares");
NOW, THEREFORE, in consideration of the mutual premises, agreements and
covenants hereinafter set forth, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement, the following terms shall have the
following respective meanings (each such meaning to be equally applicable to the
singular and plural forms thereof):
"Additional Shares" has the meaning set forth in the third "WHEREAS" clause
of this Agreement.
"Agreement" means this Registration Rights Agreement.
"Commission" shall mean the Securities and Exchange Commission, and any
other similar or successor agency of the United States federal government at the
time administering the Securities Act or the Securities Exchange Act.
"Company" has the meaning assigned such term in the preamble hereto.
"Company Common Stock" has the meaning set forth in the first "WHEREAS"
Clause.
"Company Shares" has the meaning set forth in the third "WHEREAS" clause.
"Demand" has the meaning assigned such term in Section 2.1.1.
"Demand Holder" has the meaning assigned such term in Section 2.1.1.
"Holder" has the meaning assigned such term in the preamble to this
Agreement.
"Holder of Registrable Securities" shall mean a person who owns Registrable
Securities or has the present right to acquire such Registrable Securities,
whether or not such acquisition has actually been effected and disregarding any
legal restrictions upon the exercise of such right.
"NASD" means the National Association of Securities Dealers, Inc.
"Notice Holder" has the meaning assigned such term in Section 2.1.1.
"Prospectus" means the prospectus (including any preliminary prospectus)
included in any Registration Statement, as amended or supplemented by any
prospectus supplement with respect to the terms of the offering, registering for
sale any of the Registrable Securities and all other amendments and supplements
to the Prospectus, including post-effective amendments, and all material
incorporated by reference in such Prospectus.
"Registrable Securities" means the Shares and the Additional Shares
received upon exercise of the option to convert any equity securities into which
such Shares and the Additional Shares may be exchanged after giving effect to
the terms of any reorganization, recapitalization, merger, consolidation or
otherwise by any successor corporation to the Company, and which common stock or
other equity securities have ordinary voting power for the election of directors
(or equivalent); provided, that any security's status as a Registrable Security
shall cease when the registration rights with respect to such security shall
have terminated pursuant to Section 2.6.
"Registration Statement" means any registration statement of the Company
which registers for sale under the Securities Act any of the Registrable
Securities pursuant to the provisions of this Agreement, including the
Prospectus, all amendments and supplements to such Registration Statement,
including post-effective amendments, all exhibits and all documents and
information incorporated by reference in such Registration Statement.
"Requisite Holder" means the holder, at anytime, of the outstanding Company
Shares representing more than 50% of the aggregate number of Registrable
Securities at the time outstanding.
"Rule 144" means Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended, or any
similar United States federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Securities Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Shares" has the meaning set forth in the Third "Whereas" clause of this
Agreement.
"Shelf Demand" has the meaning set forth in Section 2.1.2.
"Shelf Registration" has the meaning set forth in Section 2.1.2.
ARTICLE II
REGISTRATION RIGHTS
SECTION 2.1. Registration on Demand.
2.1.1. Demand. For a period of five years following the date of this
Agreement, upon the written request (a "Demand") of any Holder of Registrable
Securities representing, in the aggregate, at least 50% of the Company Share or
the right to acquire 50% of the Company Share on a fully-diluted basis (the
"Notice Holder") that the Company effect the registration under the Securities
Act of the number or the percentage of Registrable Securities specified by the
Demand Holder, the Company shall deliver notice thereof to all Holders of
Registrable Securities requesting that they specify, by written notice to the
Company delivered within five (5) business days following receipt of such notice
from the Company, the number of Registrable Securities they desire to include in
such registration (each such holder providing such notice a "Demand Holder") and
the Company shall, subject to the provisions hereof, use its best efforts to
effect, as soon as practicable and in any event within 120 days after a Demand
is received from the Notice Holder, the registration under the Securities Act of
the Registrable Securities which the Company has been so requested to register
by the Demand Holder; Thereafter, the Company's obligation hereunder shall be to
use its best efforts to effect the registration of the Registrable Securities;
provided, that the Company shall not have to effect more than two Demands under
this Section 2.1.1.
2.1.2. Shelf Registration. At any time that the Company is eligible to use
a short-form registration statement for registering securities for sale to the
public at large, the Demand Holders may, at their option, request (the "Shelf
Demand") that any registration statement effected pursuant to a Demand be
effected on a delayed or continuous basis, pursuant to Rule 415 under the
Securities Act (the "Shelf Registration"). The Company agrees to keep effective
such registration statement (the "Shelf Registration Statement") until the
earlier of (i) such date as of which all the Registrable Securities under the
Shelf Registration Statement have been disposed of in the manner described in
such registration statement, and (ii) 180 days after the date on which such
Shelf Registration Statement is declared effective.
2.1.3. Registration Statement Form. Registrations under this Section 2.1
shall be on such appropriate registration form of the Commission as shall be
selected by the Company. The Company shall include in any such registration
statement all information which, in the opinion of counsel to the Company, is
required to be included.
2.1.4. Effective Registration Statement. A registration requested pursuant
to this Section 2.1 shall not be deemed to have been effected (i) unless a
registration statement with respect thereto has become effective, (ii) if after
it has become effective, such registration is interfered with by any stop order,
injunction or other order or requirement of the Commission or other governmental
agency or court for any reason not attributable to the Holder and has not
thereafter become effective, or (iii) if the conditions to closing specified in
the underwriting agreement, if any, entered into in connection with such
registration are not satisfied or waived, other than by reason of a failure on
the part of the Holder or (iv) if a Shelf Registration Statement, if such
registration statement has not been kept effective until the earlier of (A) such
date as of which all of the Registrable Securities under such Shelf Registration
Statement have been disposed of in the manner described in such registration
statement and (B) 180 days after the date on which such Shelf Registration
Statement is declared effective.
2.1.5. Limitations on Registration on Demand, Shelf Registrations. The
Company shall not be required to prepare and file a registration statement
pursuant to this Section 2.1 which would become effective within 180 days
following the effective date of a registration statement (other than pursuant to
registrations on Form S-4 or Form S-8 or any successor form or other forms not
available for registering securities for sale to the public at large) filed by
the Company with the Commission pertaining to an underwritten public offering of
convertible debt securities or equity securities for cash and, unless such
registration is solely for the account of the Company, the Holders are afforded
the opportunity to include Registrable Securities in such registration pursuant
to Section 2.2. Notwithstanding anything in this Section 2.1 to the contrary, in
no event shall the Company be required to effect in the aggregate, more than two
long-form demand registrations pursuant to this Section 2.1.
2.1.6. Holder's Ability to Withdraw Registration Statement. The Holder of a
majority of the Registrable Securities to be included in such registration shall
have the right to request that the Company not have a registration statement
filed pursuant to a Demand declared effective. If the Demand Holder elects to
pay or reimburse the Company for the Company's out-of-pocket expenses incurred
in connection with such registration, such withdrawn registration statement
shall not be counted for purposes of the requests for registration to which such
Demanding Holder is entitled pursuant to Section 2.1.5 hereof.
2.1.7. Selection of Underwriter. If a registration under this Section 2.1
is effected in connection with an underwritten offering, the Holder of a
majority of the Registrable Securities to be included in such registration shall
select a managing underwriter or underwriters of recognized national standing
reasonably acceptable to the Company to administer the offering.
2.1.8. Registration of Other Securities. A registration statement filed
pursuant to the request of the Demand Holder may, subject to the provisions of
Section 2.5 hereof, include (i) Registrable Securities of Holder not making a
demand pursuant to this Section 2.1 and (ii) other securities of the Company
with respect to which registration rights have been granted and may include
securities of the Company being sold for the account of the Company.
2.1.9. Suspension. The Company may delay, suspend or withdraw the
registration of the Registrable Securities required pursuant to this Section 2.1
or the preparation or furnishing of a supplemental or amended prospectus
pursuant to Section 2.3(i) for a period not exceeding 120 days if the Company
shall in good faith determine that any such registration would interfere with
any pending financing transaction of the Company or would require the Company to
include disclosure that would reasonably be expected to have a detrimental
effect on any proposal, negotiations or plan by the Company to engage in any
acquisition or disposition of assets or any merger, consolidation, tender offer,
reorganization or similar transaction, or any other material corporate event
contemplated by the Company. In addition, the Company shall not be required to
register Registrable Securities on a date on which, under the general rules and
regulations of the Commission as advised by counsel, the inclusion therein, by
incorporation or by reference, of financial statements of the Company contained
in the annual or quarterly report of the Company most recently filed with the
Commission would not be permitted, provided that this exception shall not permit
delay or suspension of registration beyond the filing of the next required
annual or quarterly filing under the Securities Exchange Act.
SECTION 2.2. Incidental Registration. If the Company, at any time or on any
one or more occasions after the date of this Agreement, proposes to register
(other than pursuant to Section 2.1) any of its equity securities under the
Securities Act for sale to the public, whether for its own account or for the
account of other security holders or both (other than pursuant to registrations
on Form S-4 or Form S-8 or any successor form or other forms not available for
registering securities for sale to the public at large), the Company shall give
not less than 30 days' nor more than 90 days' prior written notice to each
Holder of Registrable Securities of its intention to do so. Upon the written
request of any Holder of Registrable Securities given within 20 days after
receipt of such notice from the Company, the Company will use its best efforts
to cause the Registrable Securities requested to be registered to be so
registered under the Securities Act. A request pursuant to this Section 2.2
shall state the number of Registrable Securities requested to be registered and
the intended method of distribution thereof. In connection with any registration
subject to this Section 2.2, the Holder shall enter into such underwriting,
lock-up and other agreements, and shall execute and complete such questionnaires
and other documents, as are customary in a secondary offering. The Company shall
have the right to terminate or withdraw any registration initiated by it under
this Section 2.2 prior to the effectiveness of such registration whether or not
any Holder has elected to include any securities in such registration.
Notwithstanding any other provision of this Agreement, if the representative of
the underwriters advises the Company in writing that marketing factors require a
limitation on the number of shares to be underwritten, the number of shares to
be included in the underwriting or registration shall be allocated as set forth
in Section 2.5 hereof.
No registration effected under this Section 2.2 shall relieve the Company
of its obligation to effect the registration required under Section 2.1.
SECTION 2.3. Registration Procedures. In connection with the registration
of any Registrable Securities, the Company shall effect such registrations to
permit the sale of such Registrable Securities in accordance with the intended
method or methods of disposition thereof, and pursuant thereto the Company shall
as expeditiously as possible:
(a) prepare and file with the Commission within the time limits
prescribed herein a Registration Statement with respect to such securities
and use its best efforts to cause such Registration Statement to become
effective and remain effective as provided herein;
(b) prepare and file with the Commission such amendments and
post-effective amendments to each Registration Statement as may be
necessary and use its best efforts to keep such Registration Statement
continuously effective; cause the related Prospectus to be supplemented by
any required Prospectus supplement, and as so supplemented to be filed
pursuant to Rule 424 (or any similar provisions then in force) under the
Securities Act; and comply with the provisions of the Securities Act, the
Securities Exchange Act and the rules and regulations of the Commission
promulgated thereunder applicable to it with respect to the disposition of
all securities covered by such Registration Statement as so amended or in
such Prospectus as so supplemented; the Company shall not be deemed to have
used its best efforts to keep a registration statement effective during a
period if it voluntarily takes any action that results in a participating
Holder's not being able to sell such Registrable Securities during such
period, unless such action (i) is required under applicable law or (ii) is
determined in good faith by the Board of Directors of the Company to be in
the Company's best interest;
(c) notify the Holders of Registrable Securities and underwriters, if
any, promptly (but in any event within two business days), and confirm such
notice in writing, (i) when a Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to a
Registration Statement or any post-effective amendment, when the same has
become effective, (ii) of the issuance (or, to the Company's best
knowledge, the threat or contemplation) by the Commission of any stop order
suspending the effectiveness of such Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus or the
initiation of any proceedings for that purpose, and (iii) of the receipt by
the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of a Registration Statement
or any of the Registrable Securities for offer or sale in any jurisdiction,
or the initiation or threatening of any proceeding for such purpose;
(d) use every reasonable effort to prevent the issuance of any order
suspending the effectiveness of a Registration Statement or of any order
preventing or suspending the use of a Prospectus or suspending the
qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, and, if any such order is issued,
to obtain the withdrawal of any such order at the earliest possible moment;
(e) furnish to each seller and to each duly authorized broker or
underwriter of each seller such number of authorized copies of a
Prospectus, including copies of a preliminary Prospectus, in conformity
with the requirements of the Securities Act, and such other customary
documents as such seller, broker or underwriter may reasonably request in
order to facilitate the public sale or other disposition of the Registrable
Securities owned by such seller;
(f) use its best efforts to register or qualify (and to keep each such
registration and qualification effective, including through new filings,
renewals or amendments, during the period such registration statement is
required to be kept effective) the securities covered by such Registration
Statement under such securities or blue sky laws of such jurisdictions as
each seller shall reasonably request, and do any and all other reasonable
acts and things which may be necessary under such securities or blue sky
laws to enable such seller to consummate the public sale or other
disposition in such jurisdictions of the Registrable Securities to be sold
by such seller, except that the Company shall not for any such purpose be
required to qualify to do business as a foreign corporation, or to consent
to the jurisdiction of any court or subject itself to suit in any
jurisdiction wherein it is not qualified;
(g) before filing the Registration Statement or Prospectus or
amendments or supplements thereto, furnish to counsel for each Holder of
Registrable Securities included in such Registration Statement copies of
all such documents proposed to be filed, all of which shall be subject to
the review and comment of such counsel in the exercise of its reasonable
judgment;
(h) use its best efforts to cause such Registrable Securities covered
by such Registration Statement to be registered with or approved by such
other governmental agencies or authorities exercising jurisdiction over the
Company as may be necessary to enable the seller or sellers thereof to
consummate the disposition of such Registrable Securities;
(i) notify each seller of any such Registrable Securities covered by
such Registration Statement, at any time when a Prospectus relating thereto
is required to be delivered under the Securities Act, of the Company's
becoming aware that the Prospectus included in such Registration Statement,
as then in effect, includes an untrue statement of a material fact or omits
to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading, and, at the written request of any such
seller, promptly prepare and furnish to such seller and each underwriter a
reasonable number of copies of a Prospectus supplemented or amended
(whereupon all previous versions of the Prospectus shall not be used by
such seller or underwriter and shall be promptly returned to the Company or
destroyed) so that, as thereafter delivered to the purchasers of such
Registrable Securities, such Prospectus shall not include an 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, in the light
of the circumstances under which they were made, not misleading;
(j) comply with all applicable rules and regulations of the
Commission, and make generally available to its security holders, as soon
as reasonably practicable, an earnings statement covering the period of at
least twelve consecutive months beginning with the first day of the
Company's first calendar quarter after the effective date of the
Registration Statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;
(k) use its best efforts to cause all such Registrable Securities
covered by such Registration Statement to be listed or quoted on the
principal securities exchange (including NASDAQ) on which similar
securities issued by the Company are then listed or quoted, if the listing
or quoting of such Registrable Securities is then permitted under the rules
of such exchange;
(l) provide a transfer agent and registrar for all such Registrable
Securities covered by such Registration Statement not later than the
effective date of such Registration Statement;
(m) cooperate with the selling Holders of Registrable Securities and
the underwriters, if any, to facilitate the timely preparation and delivery
of certificates representing Registrable Securities to be sold, which
certificates shall not bear any restrictive legends; and enable such
Registrable Securities to be issued in such denominations and registered in
such names as the underwriters, if any, or holders may reasonably request
at least two business days prior to any sale of Registrable Securities in a
firm commitment underwritten public offering, or at least ten business days
prior to any other such sale;
(n) enter into such reasonable and customary agreements (including an
underwriting agreement containing, among other things, indemnification
arrangements in customary form) and take such other reasonable and
customary actions as the Requisite Holder shall reasonably request in order
to expedite or facilitate the registration and disposition of such
Registrable Securities;
(o) obtain an opinion from the Company's counsel and a "cold comfort"
letter from the Company's independent public accountants in customary form
and covering such matters as are customarily covered by such opinions and
"cold comfort" letters;
(p) upon execution and delivery of such confidentiality agreements as
the Company shall reasonably request (which agreements shall not restrict
any such person's obligations under applicable securities laws), make
available for inspection by any seller of such Registrable Securities
covered by such Registration Statement, by any underwriter participating in
any disposition to be effected pursuant to such Registration Statement and
by any attorney, accountant or other agent retained by any such seller or
any such underwriter, pertinent financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors and employees to supply all information reasonably
requested by any such seller, underwriter, attorney, accountant or agent in
connection with such Registration Statement, all as necessary to conduct a
reasonable investigation within the meaning of Section 11 of the Securities
Act; and
(q) permit any Holder of Registrable Securities which Holder, in the
sole reasonable judgment of such Holder, exercised in good faith, might be
deemed to be a controlling person of the Company to participate through
counsel in the preparation of such Registration Statement and, if
specifically requested by such counsel, in discussions between the Company
and the Commission or its staff with respect to such Registration
Statement, to require the insertion therein of material, furnished in
writing, which in the written opinion of such counsel is necessary to
include in order to avoid a likelihood of potential liability for any such
Holder of Registrable Securities or such counsel.
If any such Registration Statement refers to any Holder by name or
otherwise as the holder of any securities of the Company, then such Holder shall
have the right to require (i) the insertion therein of language, in form and
substance satisfactory to such Holder, to the effect that the holding by such
Holder of such securities is not to be construed as a recommendation by such
Holder of the investment quality of the Company's securities covered thereby and
that such holding does not imply that such Holder will assist in meeting any
future financial requirements of the Company, or (ii) in the event that such
reference to such Holder by name or otherwise is not in the judgment of the
Company, as advised by counsel, required by the Securities Act or any similar
federal statute or any state "blue sky" or securities law then in force, the
deletion of the reference to such Holder.
SECTION 2.4. Expenses. All expenses incurred in effecting the registrations
(whether or not such registrations are consummated) provided for in this Article
II, including without limitation all registration and filing fees, printing
expenses, fees and disbursements of counsel for the Company, expenses of any
audits incident to or required by any such registration (including the costs of
any comfort letter) and expenses of complying with the securities or blue sky
laws of any jurisdictions pursuant to Subsection 2.3(f) hereof, the costs and
expenses associated with the filing required to be made by the NASD (including,
if applicable, the fees and expenses of any "qualified independent underwriter"
and its counsel as may be required by the rules and regulations of the NASD,
provided such fees and expenses are not paid by the underwriter), transfer
taxes, fees of transfer agents and registrars, costs of insurance (but excluding
underwriting discounts and commissions to the extent they relate to Registrable
Securities), duplicating fees, delivery expenses, and expenses incurred in
connection with the listing of the securities on any securities exchange, shall
be paid by the Company, and the Company shall pay all reasonable fees and
disbursements of one counsel for the Holder of Registrable Securities for the
performance of the normal and customary functions of counsel for selling
shareholders in each such registration.
SECTION 2.5. Marketing Restrictions. If (i) any Holder of Shares or
Registrable Securities requests registration of Registrable Securities under
Section 2.1 or 2.2, (ii) the offering proposed to be made is to be an
underwritten public offering and (iii) the managing underwriters of such public
offering furnish a written opinion that the total amount of securities to be
included in such offering would exceed the maximum amount of securities (the
"Maximum Amount") (as specified in such opinion) which can be marketed at a
price reasonably related to the then current market value of such securities and
without materially and adversely affecting such offering, then the rights of the
Company, the Holder of Registrable Securities and the holders of other
securities having the right to include such securities in such registration to
participate in such offering shall be as follows:
If such registration shall have been proposed (A) by the Company or
(B) by the holders of other securities of the Company exercising demand
registration rights, in the case of (A): (i) the Company shall be entitled
to participate in such registration first; (ii) then the Holders of the
Registrable Securities under this Agreement shall be entitled to
participate; (iii) then the holders of other securities (pro rata based on
the number of securities held by each other security holder) shall be
entitled to participate; and, in the case of (B), (i) if the demand was
proposed by the holders of other securities registrable, holders shall have
the first priority to participate in such registration, (ii) then the
Holders of the Registrable Securities under this Agreement, and (iii) then
the other security holders of the Company (in each case, pro rata within
each such group of security holders, based on the number of securities held
by each such security holder). If such registration shall have been
requested by the Demand Holder of Registrable Securities pursuant to
Section 2.1 hereof, (i) such Holder of Registrable Securities shall be
entitled to participate in such registration (ii) then the holders of other
registrable Securities shall be entitled to participate in such
registration (pro rata based on the number of securities held by each such
security holder); and then (iii) the Company shall be entitled to
participate in such registration, in each case with further pro rata
allocations to the extent any such person has requested registration of
fewer securities than such person is entitled to have registered so that
the number of securities to be included in such registration will not
exceed the Maximum Amount;
and no securities (issued or unissued) other than those registered and included
in the underwritten offering shall be offered for sale or other disposition in a
transaction which would require registration under the Securities Act (but
excluding any issuance of shares pursuant to registrations on Form S-4 or Form
S-8 or any successor form or other forms not available for registering capital
stock for sale to the public at large) until the expiration of 90 days after the
effective date of the Registration Statement in which Registrable Securities
were included pursuant to Section 2.2 or such shorter period as may be
acceptable to the Company and the Holder of the Registrable Securities
SECTION 2.6. Termination of Rights. Notwithstanding the foregoing
provisions of this Article II, the rights to registration shall terminate as to
any particular Registrable Securities when (a) a Registration Statement covering
such Registrable Securities has been declared effective and such Registrable
Securities have been disposed of in accordance with such effective Registration
Statement, (b) written opinion(s), to the effect that such Registrable
Securities may be sold without registration under the Securities Act or
applicable state law and without restriction as to the volume and timing of such
sale, shall have been received from counsel for the Company reasonably
acceptable to the Holder of a majority of such Registrable Securities, (c) after
five years from the date of this Agreement or (d) such Registrable Securities
have been sold through a broker, dealer or underwriter in a public distribution
or a public securities transaction in which the transferee receives a
certificate without a restrictive legend.
SECTION 2.7. Rule 144. The Company shall file the reports required to be
filed by it under the Securities Act and the Securities Exchange Act and the
rules and regulations promulgated thereunder and so long as the Company is
obligated to file periodic reports under the Securities Exchange Act, will take
such further actions as any Holder of Registrable Securities may reasonably
request, all to the extent required from time to time to enable such Holder to
sell Registrable Securities without registration under the Securities Act within
the limitations of the exemption provided by Rule 144. Upon the request of any
Holder of Registrable Securities, the Company shall deliver to such Holder a
written statement as to whether it has complied with such requirements.
SECTION 2.8. Indemnification. In the event of any registration of any
Registrable Securities under the Securities Act pursuant to this Agreement, the
Company will, and hereby does, indemnify and hold harmless, to the fullest
extent permitted by law, the seller of any Registrable Securities covered by
such Registration Statement, its directors and officers or general and limited
partners (and the directors and officers thereof) and each other person, if any,
who controls such seller within the meaning of the Securities Act (each, a
"Person"), against any and all losses, claims, damages or liabilities, joint or
several, and expenses (including fees of counsel and any amounts paid in any
settlement approved by the Company (which approval shall not be unreasonably
withheld or delayed)) to which such Person may become subject under the
Securities Act, common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof), or expenses arise out of or are based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement under which such securities were registered under the
Securities Act or the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, (ii) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary, final or summary Prospectus
(together with the documents incorporated by reference therein or filed with the
Commission in connection therewith) and any amendment thereof or supplement
thereto, or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading or (iii) any violation by the Company of any federal or state law,
rule or regulation applicable to the Company and relating to action required of
or inaction by the Company in connection with any such registration, and the
Company will reimburse such Person on demand for any legal or any other expenses
incurred by it in connection with investigating or defending any such loss,
claim, liability, action or proceeding; provided that the Company shall not be
liable to any such Person in any such case to the extent that any such loss,
claim, damage, liability (or action or proceeding, whether commenced or
threatened, in respect thereof) or expense arises out of or is based upon (i)
any untrue statement or alleged untrue statement or omission or alleged omission
made in such Registration Statement or amendment thereof or supplement thereto
or in any such preliminary, final or summary Prospectus in reliance upon and in
conformity with information furnished to the Company in writing by or on behalf
of any such seller or any such director, officer, general or limited partner,
underwriter, independent underwriter, director or officer or partner of such
underwriter or independent underwriter or controlling person, expressly for use
in the preparation thereof or (ii) the failure of any such seller or any such
director, officer, general or limited partner, underwriter, independent
underwriter or controlling person, to comply with any legal requirement
applicable to it to deliver a copy of a Prospectus or any supplements or
amendments thereto after the Company has made such documents available to such
Persons. Such indemnity and reimbursement of expenses shall remain in full force
and effect following the transfer of such securities by such seller.
(a) The Company, as a condition to including any Registrable
Securities in any Registration Statement filed in accordance with this
Agreement, shall have received an undertaking reasonably satisfactory to it
from the prospective seller of such Registrable Securities and any
underwriter or independent underwriter, to indemnify and hold harmless (in
the same manner and to the same extent as set forth in paragraph (a) of
this Section 2.8) the Company and its directors and officers and all other
prospective sellers and their directors, officers, general and limited
partners and respective controlling Persons (within the meaning of the
Securities Act) with respect to any statement or alleged statement in or
omission or alleged omission from such Registration Statement, any
preliminary, final or summary Prospectus contained therein, or any
amendment or supplement thereto, if such statement or alleged statement or
omission or information has been furnished in writing to the Company or its
representative by or on behalf of such seller or underwriter expressly for
use in the preparation of such Registration Statement, preliminary, final
or summary Prospectus or amendment or supplement; provided, however, that
the aggregate amount which any such seller or prospective seller shall be
required to pay pursuant to such undertaking shall be limited to the amount
of the net proceeds received by such Person upon the sale of the
Registrable Securities pursuant to the Registration Statement giving rise
to such claim. Such indemnity shall remain in full force and effect
following the transfer of such securities by such seller.
(b) As soon as possible after receipt by an indemnified party
hereunder of written notice of the commencement of any action or proceeding
with respect to which a claim for indemnification may be made pursuant to
this Section 2.8, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party, give written notice to
the latter of the commencement of such action; provided that the failure of
any indemnified party to give notice as provided herein shall not relieve
the indemnifying party of its obligations under the preceding paragraphs of
this Section 2.8, except to the extent that the indemnifying party is
actually prejudiced by such failure to give notice. If any such claim or
action shall be brought against an indemnified party, and it shall notify
the indemnifying party thereof, the indemnifying party shall be entitled to
participate therein, and, to the extent that it wishes, jointly with any
other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party; provided
that the indemnifying party shall not be entitled to so participate or so
assume the defense if, in the indemnified party's reasonable judgment, a
conflict of interest between the indemnified party and the indemnifying
party exists or may exist in respect of such claim. After notice from the
indemnifying party to such indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable
to the indemnified party under this Section 2.8 for any legal or other
expenses subsequently incurred by the indemnified party in connection with
the defense thereof unless the indemnifying party has failed to assume the
defense of such claim or to employ counsel reasonably satisfactory to such
indemnified party; provided that the indemnified parties shall have the
right to employ one counsel (in each case together with appropriate local
counsel) (such counsel to be selected by the Holder of a majority of the
Registrable Securities included in such registration) to represent such
indemnified parties if, in such indemnified parties' reasonable judgment, a
conflict of interest between the indemnified parties and the indemnifying
parties exists or may exist in respect of such claim, and in that event the
fees and expenses of such separate counsel shall be paid as incurred by the
indemnifying party; and provided, further, that if, in the reasonable
judgment of any of the indemnified parties, a conflict of interest between
such indemnified parties, and any other indemnified parties exists in
respect of such claim, such indemnified parties shall be entitled to
additional counsel or counsels and the indemnifying party shall be
obligated to pay the fees and expenses of such additional counsel or
counsels. No indemnifying party will consent to entry of any judgment or
enter into any settlement which does not include as an unconditional term
thereof the giving by the claimants or plaintiffs to such indemnified party
of an unconditional release from all liability in respect to such claim or
litigation. No indemnifying party will be liable for any settlement
effected without its prior written consent, which consent will not be
unreasonably withheld or delayed.
(c) Indemnification similar to that specified in the preceding
paragraphs of this Section 2.8 (with appropriate modifications) shall be
given by the Company and each seller of Registrable Securities with respect
to any required registration or other qualification of securities under any
state securities and "blue sky" laws.
(d) If the indemnification provided for in this Section 2.8 is
unavailable or insufficient to hold harmless an indemnified party under
Section 2.8(a) or (b) of this Agreement, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a
result of the losses, claims, damages or liabilities referred to in Section
2.8(a) or (b) in such proportion as is appropriate to reflect the relative
fault of the indemnifying party on the one hand and the indemnified party
on the other hand in connection with statements or omissions which resulted
in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or other omission or alleged omission to state
a material fact relates to information supplied by the indemnifying party
or the indemnified party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statements or omission. The parties hereto agree that it would not be just
and equitable if contributions pursuant to this Section 2.8(d) were to be
determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to in
the first sentence of this Section 2.8(d). The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this Section 2.8(d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim
(which shall be limited as provided in Section 2.8(c) if the indemnifying
party has assumed the defense of any such action in accordance with the
provisions thereof) which is the subject of this Section 2.8(d). 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. Promptly after
receipt by an indemnified party under this Section 2.8(d) of notice of the
commencement of any action against such party in respect of which a claim
for contribution may be made against an indemnifying party under this
Section 2.8(d), such indemnified party shall notify the indemnifying party
in writing of the commencement thereof if the notice specified in Section
2.8(c) has not been given with respect to such action; provided that the
omission so to notify the indemnifying party shall not relieve the
indemnifying party from any liability which it may have to any indemnified
party otherwise under this Section 2.8(d), except to the extent that the
indemnifying party is actually prejudiced by such failure to give notice.
Notwithstanding anything in this Section 2.8(d) to the contrary, no
indemnifying party (other than the Company) shall be required pursuant to
this Section 2.8(d) to contribute any amount in excess of the proceeds
received by such indemnifying party from the sale of Registrable Securities
in the offering to which the losses, claims, damages or liabilities of the
indemnified parties relate.
(e) The provisions of this Section 2.8 shall be in addition to any
other rights to indemnification or contribution which any indemnified party
may have pursuant to law or contract and shall remain in full force and
effect following the transfer of the Registrable Securities by any such
party.
ARTICLE III
CHANGES IN COMPANY COMMON STOCK
If, and as often as, there is any change in the Company Common Stock or of
any other securities into which such Company Common Stock has been converted or
changed or by way of a combination or reclassification, or through a merger,
consolidation, reorganization or recapitalization, or by any other means,
appropriate adjustment shall be made in the provisions hereof so that the rights
and privileges granted hereby to the Holder shall continue with respect to the
Registrable Securities as so changed.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Holder of the Registrable
Securities as of the date of this Agreement as follows:
(a) Due Authorization. The execution, delivery and performance of this
Agreement by the Company has been duly authorized by all requisite action.
(b) Binding Obligation. This Agreement has been duly executed and delivered
by the Company and constitutes the legal, valid and binding obligation of the
Company.
(c) No Violation. The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated herein by the Company do
not violate any provision of law, any order of any court or other agency of
government, any organizational document of the Company or any provision of any
material indenture, agreement or other instrument to which the Company or any of
its properties or assets is bound, or conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any such
indenture, agreement or other instrument or result in the creation or imposition
of any lien, charge or encumbrance of any nature whatsoever upon any of the
properties or assets of the Company which violation, conflict, breach or default
or lien, charge, restriction or encumbrance would have a material adverse effect
on the business, condition (financial or otherwise) or results of operations of
the Company taken as a whole.
(d) Government Action. No action has been taken and no statute, rule or
regulation or order has been enacted, no injunction, restraining order or order
of any nature has been issued by a federal or state court of competent
jurisdiction and no action, suit or proceeding is pending against or affecting
or threatened against, the Company before any court or arbitrator or any
governmental body, agency or official which, if adversely determined, would in
any manner draw into question the validity of this Agreement. Other than filings
required with the Commission and under state securities laws, no action or
approval by, or filing or registration with, any court or governmental agency or
body is required for the consummation of the transactions contemplated by this
Agreement by the Company.
ARTICLE V
BENEFITS OF AGREEMENT
The obligations of the Company under this Agreement shall inure to the
benefit of, and be enforceable by, the Holder and its successors and assigns
without any further action on the part of any party hereto.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1. Notices. All notices, requests, consents and other
communications provided for herein shall be in writing and shall be effective
upon delivery in person, faxed or telecopied, or mailed by certified or
registered mail, return receipt requested, postage pre-paid, addressed as
follows:
(i) if to the Company, to Dynamic Materials Corporation, 000 Xxxxx
Xxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Secretary, fax: (303)
000-0000; with a copy to Xxxx XxXxxx, Esq., Xxxxx, Xxxxxx & Xxxxxx LLP,
0000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000, fax: (303)
000-0000;
(ii) if to the Holder or any other Holder of Registrable Securities,
at such address as may have been furnished to the Company in writing by
such Holder;
or, in any case, at such other address or addresses as shall have been furnished
in writing to the Company (in the case of a Holder of Registrable Securities) or
to the Holder of Registrable Securities (in the case of the Company) in
accordance with the provisions of this paragraph.
SECTION 6.2. Waivers; Amendments. No failure or delay of any Holder of
Registrable Securities or the Company in exercising any power or right hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of such Holder
and the Company are cumulative and not exclusive of any rights or remedies which
it would otherwise have. The provisions of this Agreement may be amended,
modified or waived with (and only with) the written consent of the Company and a
majority of the Holders of Registrable Securities outstanding (exclusive of
Registrable Securities then owned by the Company or any subsidiary thereof). No
notice or demand on the Company in any case shall entitle the Company to any
other or further notice or demand in similar or other circumstances. The
foregoing notwithstanding, this Agreement may not be amended in a manner adverse
to the rights of any Holder without the consent of such Holder.
SECTION 6.3. Governing Law. This Agreement shall be construed in accordance
with and governed by the laws of the State of Delaware without regard to
principles of conflicts of law.
SECTION 6.4. Survival of Agreements; Representations and Warranties, etc.
All warranties, representations and covenants made by the Company herein or in
any certificate or other instrument delivered by it or on its behalf in
connection with this Agreement shall be considered to have been relied upon by
the Holder of Registrable Securities and shall continue in full force and effect
so long as this Agreement is in effect regardless of any investigation made by
such Holder. All statements in any such certificate or other instrument shall
constitute representations and warranties hereunder.
SECTION 6.5. Covenants to Bind Successors and Assigns. All the covenants,
stipulations, promises and agreements in this Agreement contained by or on
behalf of the parties hereto shall bind their successors and assigns, whether so
expressed or not.
SECTION 6.6. Severability. In case any one or more of the provisions
contained in this Agreement shall be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein and therein shall not in any way be affected or impaired
thereby. The parties shall endeavor in good faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
SECTION 6.7. Section Headings. The section headings used herein are for
convenience of reference only, are not part of this Agreement and are not to
affect the construction of or be taken into consideration in interpreting this
Agreement.
SECTION 6.8. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SECTION 6.9. Termination. The obligations of the Company to register the
Registrable Securities hereunder shall terminate in accordance with the terms of
this Agreement.
SECTION 6.10. Complete Agreement. This document and the documents referred
to herein contain the complete agreement between the parties and supersede any
prior understandings, agreements or representations by or between the parties,
written or oral, which may have related to the subject matter hereof in any way,
and any other agreements or understandings as to securities registration or
similar rights among the parties hereto are hereby terminated.
SECTION 6.11. No Inconsistent Agreements. The Company has not previously,
and will not hereafter, enter into any agreement with respect to its securities
with any person which grants such person rights that are inconsistent with or
superior to the rights granted to the Holder in this Agreement.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as
of the date first set forth above.
DYNAMIC MATERIALS CORPORATION
By: /s/ Xxxxxx Xxxxxxx
-------------------------
Name: Xxxxxx Xxxxxxx
Title: President
SNPE, Inc. WITNESS
SNPE, S.A.
By: /s/ Xxxxxxx Xxxxxxx By: /s/ Xxxxxx Xxxxxxxx
------------------------- ----------------------------
Name: Xxxxxxx Xxxxxxx Name: Xxxxxx Xxxxxxxx
Title: President Title: Senior Vice President
of Financial and
Legal Affairs
