REVOLVING LINE OF CREDIT NOTE
$7,500,000.00
Denver, Colorado
September 15, 2005
FOR VALUE
RECEIVED, the undersigned DYNAMIC MATERIALS CORPORATION
("Borrower") promises to pay to the order
of WELLS FARGO BANK, NATIONAL
ASSOCIATION ("Bank") at its office at
Colorado RCBO, 1740 Broadway, 3rd Floor,
Denver, CO 80274, or at such other place as
the holder hereof may designate, in
lawful money of the United States of
America and in immediately available funds,
the principal sum of Seven Million Five
Hundred Thousand Dollars
($7,500,000.00), or so much thereof as may
be advanced and be outstanding, with
interest thereon, to be computed on each
advance from the date of its
disbursement as set forth herein.
I. DEFINITIONS:
As used herein,
the following terms shall have the meanings set forth after
each, and any other term defined in this
Note shall have the meaning set forth
at the place defined. Terms used herein and
defined in the Credit Agreement have
the respective meanings ascribed to them in
the Credit Agreement.
(a) "Adjusted
Euribor Rate" means, for any Interest Rate Determination Date
with respect to a Fixed Rate Term for a
Euro denominated Advance, the rate per
annum obtained by dividing (i) the offered
quotation (rounded upward to the
nearest 1/100th of 1%) by first class banks
in the London interbank market to
Bank for deposits in Euro of amounts in
same day funds comparable to the
principal amount of the Euro-denominated
Advance for which the Adjusted Euribor
Rate is then being determined with
maturities comparable to such Fixed Rate Term
as of approximately 11:00 A.M. (London
time) on such Interest Rate Determination
Date by (ii) a percentage equal to 100%
minus the stated maximum rate of all
reserve requirements (including any
marginal, emergency, supplemental, special
or other reserves) applicable on such
Interest Rate Determination Date to any
member bank of the Federal Reserve System
in respect of "Eurocurrency
liabilities" as defined in Regulation D of
the Federal Reserve Board (or any
successor category of liabilities under
Regulation D).
(b) "Credit
Agreement" means the Credit Agreement dated as of September 15,
2005 by and between Borrower and Bank, as
amended from time to time.
(c) "Fixed Rate
Term" means a period commencing on a Business Day and
continuing for 1, 2 or 3 months, as
designated by Borrower, during which all or
a portion of the outstanding principal
balance of this Note bears interest
determined in relation to (i) with respect
to Dollar-denominated Advances,
LIBOR; or, with respect to Euro-denominated
Advances, the Adjusted Euribor Rate;
provided however, that no Fixed Rate Term
may be selected for a principal amount
less than One Hundred Thousand Dollars
($100,000.00); and provided further, that
no Fixed Rate Term shall extend beyond the
scheduled maturity date hereof. If
any Fixed Rate Term would end on a day
which is not a Business Day, then such
Fixed Rate Term shall be extended to the
next succeeding Business Day, provided,
however, that provided that, if any Fixed
Rate Term applicable to a
Euro-denominated Advance would otherwise
expire on a day that is not a Business
Day but is a day of the month after which
no further Business Day occurs in such
month, such Fixed Rate Term shall expire on
the next preceding Business Day.
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<PAGE>
(d) "Interest
Rate Determination Date" means each date for calculating the
Adjusted Euribor Rate, for purposes of
determining the interest rate in respect
of a Fixed Rate Term. The Interest Rate
Determination Date in respect of
calculating the Adjusted Euribor Rate shall
be the second Business Day prior to
the first day of the related Fixed Rate
Term.
(e) "LIBOR"
means the rate per annum (rounded upward, if necessary, to the
nearest whole 1/8 of 1%) and determined
pursuant to the following formula:
LIBOR =
Base LIBOR
----------------------------------
100% - LIBOR Reserve Percentage
(i) "Base LIBOR"
means the rate per annum for United States dollar deposits
quoted by Bank as the Inter-Bank Market
Offered Rate, with the understanding
that such rate is quoted by Bank for the
purpose of calculating effective rates
of interest for loans making reference
thereto, on the first day of a Fixed Rate
Term for delivery of funds on said date for
a period of time approximately equal
to the number of days in such Fixed Rate
Term and in an amount approximately
equal to the principal amount to which such
Fixed Rate Term applies. Borrower
understands and agrees that Bank may base
its quotation of the Inter-Bank Market
Offered Rate upon such offers or other
market indicators of the Inter-Bank
Market as Bank in its discretion deems
appropriate including, but not limited
to, the rate offered for U.S. dollar
deposits on the London Inter-Bank Market.
(ii) "LIBOR
Reserve Percentage" means the reserve percentage prescribed by
the Board of Governors of the Federal
Reserve System (or any successor) for
"Eurocurrency Liabilities" (as defined in
Regulation D of the Federal Reserve
Board, as amended), adjusted by Bank for
expected changes in such reserve
percentage during the applicable Fixed Rate
Term.
(f) "Prime Rate"
means at any time the rate of interest most recently
announced within Bank at its principal
office as its Prime Rate, with the
understanding that the Prime Rate is one of
Bank's base rates and serves as the
basis upon which effective rates of
interest are calculated for those loans
making reference thereto, and is evidenced
by the recording thereof after its
announcement in such internal publication
or publications as Bank may designate.
II. INTEREST:
(a) Interest.
The outstanding principal balance of Dollar-denominated
Advances shall bear interest (computed on
the basis of a 360-day year, actual
days elapsed) either (i) at a fluctuating
rate per annum one half of one percent
(.50%) below the Prime Rate in effect from
time to time, or (ii) at a fixed rate
per annum determined by Bank to be two
percent (2.00%) above LIBOR in effect on
the first day of the applicable Fixed Rate
Term. The outstanding principal
balance of Euro-denominated Advances shall
bear interest (computed on the basis
of a 360-day year, actual days elapsed) at
a fixed rate per annum determined by
Bank to be two percent (2.00%) above
Adjusted Euribor Rate in effect on the
applicable Interest Rate Determination
Date. When interest is determined in
relation to the Prime Rate, each change in
the rate of interest hereunder shall
become effective on the date each Prime
Rate change is announced within Bank.
With respect to each Fixed Rate Term
selection hereunder, Bank is hereby
authorized to note the date, principal
amount, interest rate and Fixed Rate Term
applicable thereto and any payments made
thereon on Bank's books and records
(either manually or by electronic entry)
and/or on any schedule attached to this
Note, which notations shall be prima facie
evidence of the accuracy of the
information noted.
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<PAGE>
(b) Payment of
Interest. Interest accrued on Dollar-denominated Advances
shall be payable in Dollars on the last day
of each month, commencing September
30, 2005. Interest accrued on
Euro-denominated Advances shall be payable in Euro
on the last day of each applicable Fixed
Rate Term, provided that in the case of
each such Fixed Rate Term exceeding one
month, interest shall be payable in EURO
on the first Business Day of each calendar
month after the commencement of such
Fixed Rate Term.
(c) Selection of
Interest Rate Options - Dollar-denominated Advances. At
any time any portion of this Note bears
interest determined in relation to
LIBOR, it may be continued by Borrower at
the end of the Fixed Rate Term
applicable thereto so that all or a portion
thereof bears interest determined in
relation to the Prime Rate or to LIBOR for
a new Fixed Rate Term designated by
Borrower. At any time any portion of this
Note bears interest determined in
relation to the Prime Rate, Borrower may
convert all or a portion thereof so
that it bears interest determined in
relation to LIBOR for a Fixed Rate Term
designated by Borrower. At such time as
Borrower requests an advance hereunder
or wishes to select a LIBOR option for all
or a portion of the outstanding
principal balance hereof, and at the end of
each Fixed Rate Term, Borrower shall
give Bank notice specifying: (i) the
interest rate option selected by Borrower;
(ii) the principal amount subject thereto;
and (iii) for each LIBOR selection,
the length of the applicable Fixed Rate
Term. Any such notice may be given by
telephone (or such other electronic method
as Bank may permit) so long as, with
respect to each LIBOR selection, (A) if
requested by Bank, Borrower provides to
Bank written confirmation thereof not later
than three (3) Business Days after
such notice is given, and (B) such notice
is given to Bank prior to 10:00 a.m.
(San Francisco time) on the first day of
the Fixed Rate Term, or at a later time
during any Business Day if Bank, at it's
sole option but without obligation to
do so, accepts Borrower's notice and quotes
a fixed rate to Borrower. If
Borrower does not immediately accept a
fixed rate when quoted by Bank, the
quoted rate shall expire and any subsequent
LIBOR request from Borrower shall be
subject to a redetermination by Bank of the
applicable fixed rate. If no
specific designation of interest is made at
the time any advance is requested
hereunder or at the end of any Fixed Rate
Term, Borrower shall be deemed to have
made a Prime Rate interest selection for
such advance or the principal amount to
which such Fixed Rate Term applied.
(d) Continuation
- Euro-denominated Advances.
(i) Subject to
the provisions of Section 3(f)(vi), Borrower shall have the
option upon the expiration of any Fixed
Rate Term applicable to a
Euro-denominated Advance, to continue all
or any portion of such advance as a
Euro-denominated Advance.
(ii) Borrower
shall deliver a Credit Notice to Bank no later than 9:00 A.M.
(San Francisco time) at least four Business
Days in advance of the proposed
continuation date in the case of a
continuation of a Euro-denominated Advance.
(iii) A Credit Notice for
continuation of a Euro-denominated Advance shall
be irrevocable, and Borrower shall be bound
to effect a continuation in
accordance therewith.
(e) Taxes and
Regulatory Costs. Borro
