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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): DECEMBER 30, 1999
DYNAMIC MATERIALS CORPORATION
(Exact Name of Registrant as Specified in Charter)
Delaware 08328 84-0608431
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
551 ASPEN RIDGE DRIVE, LAFAYETTE, COLORADO 80026
(Address of principal executive offices, zip code)
Registrant's telephone number, including area code: (303) 665-5700
NOT APPLICABLE
Former Name or Former Address if Changed Since Last Report
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<PAGE>
ITEM 5. OTHER EVENTS
The Company entered into a First Amendment to the Deferral and Waiver
Agreement by and between Keybank National Association and Dynamic Materials
Corporation, dated as of December 30, 1999, pursuant to which (i) certain
principal payments were deferred until March 30, 2000 and (ii) covenant defaults
were waived until March 30, 2000. The First Amendment is attached hereto as
Exhibit 99.1.
On January 10, 2000 the company issued a press release wherein it disclosed
discussions with SNPE, Inc. regarding possible business combinations. The Press
Release dated January 10, 2000 is attached hereto as Exhibit 99.2.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DYNAMIC MATERIALS CORPORATION
(Registrant)
Date: January 10, 2000 By:/s/ Richard A. Santa
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Vice President-Finance, and
Chief Financial Officer
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EXHIBIT INDEX
99.1 FIRST AMENDMENT TO DEFERRAL AND WAIVER AGREEMENT, dated as of December 30,
1999 by and between KEYBANK NATIONAL ASSOCIATION, a national banking
association (Lender) and DYNAMIC MATERIALS CORPORATION, a Delaware
corporation (the Company).
99.2 Press Release dated January 10, 2000
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EXHIBIT 99.1
FIRST AMENDMENT TO DEFERRAL AND WAIVER AGREEMENT
THIS FIRST AMENDMENT TO DEFERRAL AND WAIVER AGREEMENT is made and entered
into this 30th day of DECEMBER, 1999, by and between KEYBANK NATIONAL
ASSOCIATION, a national banking association ("LENDER") and DYNAMIC MATERIALS
CORPORATION, a Delaware corporation (the "COMPANY").
RECITALS
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A. On December 31, 1998, the Company and Lender entered into a First
Amendment to Amended and Restated Credit Facility and Security Agreement ("FIRST
AMENDMENT"), which amended the terms of a November 30, 1998 Amended and Restated
Credit Facility and Security Agreement (the First Amendment and the Amended and
Restated Credit Facility and Security Agreement shall be hereinafter
collectively referred to as the ("CREDIT AGREEMENT"). Pursuant to the terms of
the First Amendment, Lender agreed to provide credit facilities to the Company
in an aggregate principal amount of up to $14,000,000, consisting of an
Acquisition Line with a maximum credit limit of $5,700,000, an Accommodation
Line with a maximum credit limit of $2,300,000, and a Working Capital Credit
Line with a maximum credit limit of $6,000,000.
B. By letter dated July 21, 1999, Lender waived for the period ended
September 30, 1999 certain of the Company's covenant defaults under the Credit
Agreement and under that certain Reimbursement Agreement between the parties
dated as of September 1, 1998, executed in connection with Lender's issuance of
a letter of credit to support principal and interest payments under certain
industrial development revenue bonds (the Credit Agreement and the Reimbursement
Agreement are sometimes hereinafter collectively referred to as the ("LOAN
DOCUMENTS"). In addition, by letter dated September 30, 1999, Lender deferred
until October 15, 1999 certain principal payments that were required to be made
by the Company on September 30, 1999.
C. On or about October 15, 1999, Company and Lender executed a Deferral and
Waiver Agreement, pursuant to which Lender agreed, conditioned upon certain
undertakings and covenants of Company, to forbear from declaring any further
defaults under the Loan Documents, to accelerate amounts due thereunder, or to
otherwise exercise its rights and remedies under the Loan Documents for the
period from October 16, 1999 through December 30, 1999 (the "INITIAL DEFERRAL
PERIOD").
D. Company has requested that Lender enter into this First Amendment to
Deferral and Waiver Agreement in order to give the Company additional time to
undertake diligent efforts to develop and implement a business plan that will
bring it into compliance with its obligations under the Loan Documents or to
otherwise provide for a refinancing or infusion of equity that will permit the
obligations under the Loan Documents to be satisfied.
E. Lender is willing to enter into this First Amendment to Deferral and
Waiver Agreement, but only upon the terms and conditions set forth herein.
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NOW, THEREFORE, in consideration of the above Recitals and for other good
and valuable consideration, the receipt and adequacy of which are hereby
mutually acknowledged, the parties do hereby agree as follows:
1. AFFIRMATION OF RECITALS. The Recitals set forth above are true and
correct and are incorporated herein by this reference.
2. ACKNOWLEDGMENT OF INDEBTEDNESS. Company acknowledges that as of the date
hereof, the following loan balances are outstanding from Company to Lender:
Principal amount outstanding under Acquisition Line $5,700,000.00
Principal amount outstanding under Accommodation Line $2,300,000.00
Of the foregoing amounts, Company further acknowledges that the
following amounts are due and owing to Lender as of the date hereof (the
"Current Principal Loan Payments"):
<TABLE>
<S> <C>
Current Principal Loan Payment due under Acquisition Line $518,181.82
Current Principal Loan Payment due under Accommodation Line $460,000.00
</TABLE>
3. LENDER'S FORBEARANCE. Provided that Company is not in default under the
terms of this First Amendment to Deferral and Waiver Agreement, Lender agrees
not to declare any further defaults under the Loan Documents, to accelerate the
amounts due under the Loan Documents, or to otherwise exercise its other rights
and remedies under the Loan Documents for the period from December 31, 1999 to
March 30, 2000 (the "FIRST AMENDED DEFERRAL PERIOD"). The Current Principal Loan
Payments referred to in paragraph 2 above, together with accrued interest (as
calculated pursuant to paragraphs 4 and 5 below), shall be due and payable on
March 30, 2000.
4. INTEREST RATE ON ACCOMMODATION LINE. From and after the date hereof,
interest on the unpaid principal due with respect to the Accommodation Line
shall accrue and be payable at the Prime Rate (as defined in the First
Amendment) PLUS two hundred twenty five (225) basis points.
5. INTEREST RATE ON ACQUISITION LINE AND WORKING CAPITAL CREDIT LINE. From
and after the date hereof, interest on the unpaid principal due with respect to
the Acquisition Line and the Working Capital Credit Line shall accrue and be
payable at the Prime Rate (as defined in the First Amendment) plus one hundred
(100) basis points.
6. REDUCTION OF WORKING CAPITAL CREDIT LINE. Effective as of the date
hereof, the maximum credit limit under the Working Capital Credit Line shall be
and is hereby reduced from $6,000,000 to $5,000,000.
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7. WAIVER OF COVENANT VIOLATIONS. Provided that the Company is not in
default hereunder, Lender agrees, during the First Amended Deferral Period, to
waive the Company's Covenant Defaults under the Loan Documents.
8. NO DEFENSES, WAIVERS. As of the date of this First Amendment to Deferral
and Waiver Agreement, the Principal Loan Payments set forth in paragraph 2 above
are due and payable by the Company to Lender, and the Company acknowledges that
it has no defense, offset, or counterclaims to any of Company's obligations
under the Loan Documents. To the extent that any such defenses, claims or
offsets exist as of the date hereof, they are hereby waived and released in
consideration of Lender's execution of this First Amendment to Deferral and
Waiver Agreement. Company has duly authorized, executed and delivered this First
Amendment to Deferral and Waiver Agreement to Lender, and the Company
acknowledges that the Loan Documents are valid and enforceable in accordance
with their terms against the Company.
9. DEFAULTS. The occurrence of any one or more of the following shall
constitute a default under this First Amendment to Deferral and Waiver
Agreement:
(i) the untruth of any representation or warranty contained in this
First Amendment to Deferral and Waiver Agreement, or the existence of a
misrepresentation of fact or fraud contained in any document or information
heretofore or hereafter submitted or communicated to Lender in support of this
First Amendment to Deferral and Waiver Agreement;
(ii) breach or violation of any terms, covenant or condition
contained in this First Amendment to Deferral and Waiver Agreement;
(iii) any other default (other than non-payment of principal
acknowledged in paragraph 2 above and the Company's Covenant Defaults referred
to in paragraph 7 above) under any of the Loan Documents;
(iv) any variation by Two Hundred and Fifty Thousand Dollars
($250,000) or more (on a cumulative basis) between (i) the pro forma cash flow
summary (September 21, 1999 update) and monthly income statement summary
(September 21, 1999 update) which have been submitted by the Company to Lender
in accordance with the Loan Documents and (ii) the actual cash flow and
operating income of the Company calculated and submitted to Lender within twenty
(20) days following the end of each calendar month during the First Amended
Deferral Period.
10. TERMINATION; REMEDIES. Immediately following the occurrence of any
default under this First Amendment to Deferral and Waiver Agreement, Lender may,
at its option, (i) terminate its obligations to waive Covenant Defaults and
defer payments as contained herein without notice or demand to the Company and
(ii) pursue any other remedies available to it under the Loan Documents or
otherwise. If not sooner terminated, Lender's obligation to waive Covenant
Defaults and defer payments as set forth herein shall terminate automatically
and without notice to or action by Company on March 30, 2000.
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11. NO WAIVER OF REMEDIES. Lender expressly reserves any and all rights and
remedies available to it under this First Amendment to Deferral and Waiver
Agreement and the Loan Documents, at law or in equity in the event the Company
defaults under this First Amendment to Deferral and Waiver Agreement. No failure
to exercise, or delay by Lender in exercising, any right, power or privilege
hereunder shall preclude any other or further exercise thereof, or the exercise
of any other right, power or privilege. The rights and remedies provided in this
First Amendment to Deferral and Waiver Agreement and the Loan Documents are
cumulative and not exclusive of each other or of any right or remedy provided by
law or in equity. Except as expressly provided in the Loan Documents, no notice
to or demand upon the Company in any instance shall, in itself, entitle the
Company to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the right of Lender to any other or
further action in any circumstances without notice or demand.
12. EXPENSES; ATTORNEYS' FEES. In addition to all other amounts that are
now due or may hereafter become due to Lender under the Loan Documents or this
First Amendment to Deferral and Waiver Agreement, the Company shall reimburse
Lender for all amounts reasonably incurred by or on behalf of Lender for
attorneys' fees, recording expenses, title insurance fees, UCC searches, and all
other reasonable expenses incurred by or on behalf of Lender by reason of the
matters specified herein and for the preparation of this First Amendment to
Deferral and Waiver Agreement and all other documents necessary and required to
effectuate the provisions hereof including, without limitation, all reasonable
costs and expenses with respect to the Company's compliance with the terms and
conditions hereof and Lender's enforcement thereof. In the event any dispute
shall arise concerning the subject matter of this First Amendment to Deferral
and Waiver Agreement, Lender shall be entitled to recover from the Company its
reasonable attorneys' fees and costs incurred in the enforcement of any of the
provisions set forth herein. The rights and remedies of Lender contained in this
paragraph shall be in addition to, and not in lieu of, the rights and remedies
contained in the Loan Documents and as provided by law.
13. GOVERNING LAW. This First Amendment to Deferral and Waiver Agreement
shall be construed in accordance with the laws of the State of Colorado, without
regard to its conflict of laws principles.
14. CONSTRUCTION. This First Amendment to Deferral and Waiver Agreement
shall not be construed more strictly against Lender merely by virtue of the fact
that the same has been prepared by Lender or its counsel, it being recognized
that the Company and Lender have contributed substantially and materially to the
preparation of this First Amendment to Deferral and Waiver Agreement, and the
Company and Lender each acknowledge and waive any claim contesting the existence
and the adequacy of the consideration given by any of the other parties hereto
in entering into this First Amendment to Deferral and Waiver Agreement.
15. ENTIRE AGREEMENT. Company and Lender each acknowledge that there are no
other agreements or representations, either oral or written, express or implied,
not embodied in this First Amendment to Deferral and Waiver Agreement and the
Loan Documents, which, together, represent a complete integration of all prior
and contemporaneous agreements and understandings of the Company and Lender, and
the provisions of the Loan Documents are hereby ratified and confirmed.
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16. BENEFIT. Except as provided herein, this First Amendment to Deferral
and Waiver Agreement shall be binding upon and shall inure to the benefit of the
Company and Lender, and their respective successors and assigns.
17. RATIFICATION. The Loan Documents shall remain in full force and effect,
and all of the terms and provisions of the Loan Documents, as herein modified,
are hereby ratified and reaffirmed.
18. CONSENT TO AGREEMENT. Company acknowledges that it has thoroughly read
and reviewed the terms and provisions of this First Amendment to Deferral and
Waiver Agreement and is familiar with the same, that the terms and provisions
contained herein are clearly understood by it and have been fully and
unconditionally consented to by it and that the Company has had the full benefit
and advice of counsel of its own selection, or the opportunity to obtain the
benefit and advice of counsel of its own selection, in regard to understanding
the terms, meaning and effect of this First Amendment to Deferral and Waiver
Agreement and that this First Amendment to Deferral and Waiver Agreement has
been entered into by the Company freely, voluntarily, with full knowledge, and
without duress, and that in executing this First Amendment to Deferral and
Waiver Agreement, the Company is relying on no other representations either
written or oral, express or implied, made to the Company by any other party
hereto, and that the consideration received by the Company hereunder has been
actual and adequate.
19. RELEASE. As additional consideration for Lender entering into this
First Amendment to Deferral and Waiver Agreement, the Company hereby fully and
unconditionally releases and forever discharges Lender, its agents, servants,
employees, directors, officers, attorneys, branches, affiliates, subsidiaries,
successors and assigns and all persons, firms, corporations, and organizations
acting in its behalf of and from all damage, loss, claims, demands, liabilities,
obligations, actions and causes of action whatsoever which the Company may now
have or claim to have against Lender as of the date of this First Amendment to
Deferral and Waiver Agreement, whether presently known or unknown, and of every
nature and extent whatsoever on account of or in any way affecting, concerning,
arising out of or founded upon the Loan Documents including, but not limited to,
all such loss or damage of any kind heretofore sustained, or that may arise as a
consequence of the dealings between the parties up to and including the date of
this First Amendment to Deferral and Waiver Agreement.
20. COUNTERPARTS. It is understood and agreed that this First Amendment to
Deferral and Waiver Agreement may be executed in several counterparts, each of
which shall, for all purposes, be deemed an original and all of such
counterparts, taken together, shall constitute one and the same First Amendment
to Deferral and Waiver Agreement, even though all of the parties hereto may not
have executed the same counterpart of this First Amendment to Deferral and
Waiver Agreement.
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21. LENDER NOT LIABLE FOR EXPENSES. Nothing in this First Amendment to
Deferral and Waiver Agreement shall be intended or construed to hold Lender
liable or responsible for any expenses, disbursement, liability or obligation of
any kind or nature whatsoever including, but not limited to, wages, salaries,
payroll taxes, deposits, withholding, benefits or other amounts payable to or on
behalf of the Company.
22. COMPANY REMAINS IN CONTROL. Company and Lender agree that the Company
remains in control of the Company, that it determines the business plan for, and
employment, management and operating directions and decisions for Company.
23. MISCELLANEOUS. This First Amendment to Deferral and Waiver Agreement is
made for the sole protection of Lender and the Company and their respective
successors and assigns. No other person shall have any right whatsoever
hereunder. Notices to parties hereunder may be given to them at the addresses
and in the manner provided in the Loan Documents. Time shall be of the strictest
essence in the performance of each and every one of the Company's obligations
hereunder. If any provision of this First Amendment to Deferral and Waiver
Agreement is held to be invalid or unenforceable, the remaining provisions shall
remain in effect without impairment.
IN WITNESS WHEREOF, this First Amendment to Deferral and Waiver Agreement
has been executed by the parties hereto in manner and form sufficient to bind
them, as of the day and year first above written.
KEYBANK NATIONAL ASSOCIATION
a national banking association
By: /s/ H. Daniel Willetts
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Name: H. Daniel Willetts
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Its: Vice President
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DYNAMIC MATERIALS CORPORATION,
a Delaware corporation
By: /s/ Richard A. Santa
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Name: Richard A. Santa
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Its: Vice President-Finance and
----------------------------------------
Chief Financial Officer
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EXHIBIT 99.2
FOR IMMEDIATE RELEASE
CONTACT: Mark W. Jarman Richard A. Santa
VP of Corporate Development Chief Financial Officer
Dynamic Materials Corporation Dynamic Materials Corporation
303-604-3923 303-604-3938
DMC ANNOUNCES DISCUSSIONS WITH SNPE, INC.
(Lafayette, CO - January 10, 2000) Dynamic Materials Corporation, (Nasdaq:
BOOM), 'DMC', today announced that it is discussing with SNPE, Inc., currently a
14.37% shareholder of the Company, the possible issuance for cash of common
stock of the Company and a note convertible into common stock. The parties have
not reached a definitive agreement and discussions are ongoing.
This news release contains forward-looking statements that involve risks and
uncertainties, including, but not limited to, whether the Company and SNPE, Inc.
will reach a definitive agreement and other risks detailed from time to time in
the Company's SEC reports, including the Company's report on Form 10-K for the
year ended December 31, 1998, and reports on Form 10-Q for the quarters ending
March 31, June 30 and September 30, 1999.
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