Document:

Document

Exhibit 1.01

DMC Global Inc.
Conflict Minerals Report
For The Year Ended December 31, 2020

Introduction

DMC Global Inc. ("DMC") has included this Conflict Minerals Report as an exhibit to our Form SD for the period January 1 to December 31, 2020 as required by Rule 13p-1 under the Securities Exchange Act of 1934, as amended, and Form SD (collectively, the "Conflict Minerals Rule"). 

Unless the context indicates otherwise, the terms "we," "its," "us" and "our" refer to DMC and its consolidated subsidiaries.

In 2010, the United States enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”). Section 1502 of the Act relates to conflict minerals and requires companies subject to the Act to file a Form SD annually with the United States Securities and Exchange Commission (“SEC”) to disclose whether the tungsten, tantalum, tin, and gold (referred to collectively as “3TG”) used in their products benefited, directly or indirectly, armed groups in the Democratic Republic of the Congo ("DRC") and adjoining countries (collectively, the “Covered Countries”). This Report, which is an exhibit to our Form SD, describes the design and implementation of our conflict minerals due diligence measures undertaken in 2020, including a description of how these measures were designed to determine, to our knowledge, the source mines, countries of origin, and processing facilities for 3TG contained in components used in DMC’s products.

Forward-Looking Statements

Certain statements in this report relate to future events and expectations, and as such constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “may,” “will,” “continue,” “project,” “forecast,” and similar expressions, as well as statements in the future tense, identify forward-looking statements. All statements that reflect DMC's expectations, assumptions, or projections about the future, other than statements of historical fact, are forward-looking statements, including, without limitation, statements concerning the additional steps that DMC intends to take to mitigate the risk that its 3TG finances or benefits armed groups in the Covered Countries.

Forward-looking statements are subject to risks and uncertainties that could cause actual actions or performance to differ materially from those expressed in the forward-looking statements. These risks and uncertainties may include, but are not limited to, (1) the continued implementation of satisfactory traceability and other compliance measures by our direct and indirect suppliers on a timely basis or at all, (2) whether smelters and refiners and other market participants responsibly source 3TG, and (3) political and regulatory developments, whether in the DRC region, the United States or elsewhere and (4) the other risk factors summarized in DMC's Form 10-K for the year ended December 31, 2020 and other reports filed with the Securities and Exchange Commission (the “SEC”). DMC disclaims any obligation to update publicly any forward-looking statements, whether in response to new information, future events or otherwise, except as required by applicable law.

Background and Covered Products

DMC is a diversified holding company. Today, DMC’s portfolio consists of DynaEnergetics and NobelClad, which collectively address the energy, industrial processing and transportation markets. DynaEnergetics designs, manufactures and distributes products utilized by the global oil and gas industry principally for the perforation of oil and gas wells. NobelClad is a leader in the production of explosion-welded clad metal plates for use in the construction of corrosion resistant industrial processing equipment and specialized transition joints. Both DynaEnergetics and NobelClad operate globally through an international network of manufacturing, distribution and sales facilities.

We are subject to the Conflict Minerals Rule because some products manufactured by our segments contain 3TG that are necessary to the functionality or production of the products. Specifically, some of the clad plates manufactured by NobelClad may include tantalum, which is the only instance where a significant amount of any 3TG is used. Other DMC products may have trace amounts of 3TG, such as in a metal alloy or in weld wire residual which remains in the clad plates produced by NobelClad or in liners, explosive powders, and pastes in products sold by DynaEnergetics. 

Our Conflict Minerals Policy

We previously adopted a conflict mineral policy regarding sourcing of 3TG contained in materials and components supplied to us and communicated this policy to suppliers and members of the public by publishing the policy on our website at https://www.dmcglobal.com/investors/governance. Our policy supports the goal of the Act, which seeks to prevent armed groups engaged in human rights abuses in the Covered Countries from benefiting from the sourcing of 3TG from that region. To further that goal, we request information from our suppliers regarding the source and chain of custody of 3TG contained in the materials and components supplied to us. DMC will endeavor not to use 3TG from mines in the DRC Region where the products do support armed conflict in our products.

Reasonable Country of Origin Inquiry Information

In accordance with the Conflict Minerals Rule, DMC determined that 3TG is necessary to the functionality or production of certain of its products and, accordingly, undertook a reasonable country of origin inquiry (“RCOI”). Our RCOI consisted principally of submitting to suppliers, other than customers, of product components that contain 3TG ("Suppliers") the conflict minerals reporting template (the “Survey”) prepared by the Responsible Minerals Initiative (“RMI”). DMC submitted the Survey to all of its Suppliers and then reviewed all responses for completeness, reasonableness, and consistency, and followed up for corrections and clarifications as DMC determined appropriate.

Due Diligence Program Design

Design Framework

DMC’s due diligence measures were designed to conform, in all material respects, with the framework in the Organisation for Economic Co-operation and Development Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. The objectives of our diligence initiative were to determine, to the best of our ability, the source and chain of custody of the 3TG necessary for the functionality and/or production of our products; whether any such 3TG originated in the Covered Countries; and where such 3TG were determined to have originated in Covered Countries, whether armed groups directly or indirectly benefited from such 3TG.

Elements of Design Framework

Elements of our program design are discussed below. Selected due diligence measures that we took with respect to 2020 are discussed under "Due Diligence Program Execution."

1.Internal Operating Processes. We have internal operating processes to determine the source and chain of custody for the 3TG used in our products. The processes involve the identification of Suppliers, communication with and inquiries made of the Suppliers and reporting the results of Supplier communication and inquiries to certain members of DMC senior leadership. We also have an internal team charged with compliance with the Conflict Minerals Rule including operations personnel at each of the affected segments, as well as accounting, legal and management personnel. This team is responsible for collecting and reviewing information from Suppliers and preparing our filing.

2.Risk Assessment & Risk Mitigation. As part of our internal operating processes relating to 3TG compliance, our segments handle relationships with Suppliers on an individual basis given the different types of products they manufacture. Suppliers respond using the Survey and/or explanatory letters. Responses to these inquiries are reviewed and retained for at least five (5) years as part of our internal operating procedures. In certain cases, our internal team members follow up with Suppliers who do not initially provide sufficient information.

3.Smelter/Refiner Due Diligence Practices. We do not directly source 3TG from mines, smelters or refiners, and we further believe that we are many levels removed from these market participants. Given our positioning in the supply chain, we do not perform direct audits of mines, smelters or refiners and we rely on cross industry initiatives such as the RMI for such due diligence.

4.Annual Reporting on Supply Chain Due Diligence. This Conflict Minerals Report is our annual report on supply chain 3TG due diligence.

5.Due Diligence Program Execution. In furtherance of our 3TG due diligence, we performed the following due diligence measures with respect to the 2020 compliance period:
a.We sent requests to Suppliers to provide us with information, through the completion the Survey or a response letter, concerning the potential usage and source of 3TG in the parts, materials or components that they sell to us.
b.We followed up by email or phone with certain Suppliers that did not provide a response within the specified time frame.
c.We reviewed the completed responses received from the Suppliers based on our internal review criteria to identify incomplete responses, potential errors and inaccuracies.

Product Status and Information

We endeavored to determine the mine, smelter or refiner location of origin of the 3TG contained in our products by requesting that the Suppliers provide us with a completed response to our written inquiry and through the other efforts described in this Conflict Minerals Report. However, most Suppliers that responded that their products contained 3TG provided data only with respect to that individual Supplier’s overall 3TG sourcing and not with respect to the products they supplied directly to us.

For 2020, based on the information we received, we could not conclude definitively whether any of our products were "DRC conflict free."

Future Risk Mitigation Efforts

We intend to take the following steps in 2021 to mitigate the risk that the necessary 3TG in our products finance or benefit armed groups in the Covered Countries:

1.Continue to engage with Suppliers that provided incomplete responses or that did not provide responses for previous years to help ensure that they provide requested information for 2021.

2.Monitor and encourage the continuing development and progress of traceability measures at Suppliers that indicated for this year and prior years that the source of 3TG was unknown or indeterminable.Exhibit 4.1

    

    

    

    

    AGREEMENT OF RESIGNATION, APPOINTMENT
        AND ACCEPTANCE (this “Acceptance Agreement”), dated as of May 25, 2021, by and among WFN Credit Company, LLC, a Delaware limited liability company (the “Company”),
      U.S. Bank Trust National Association, a national banking association (the “Resigning Trustee”) and Citicorp Trust Delaware, National Association, a national
      banking association duly organized and existing under the laws of the United States of America (the “Successor Trustee”).  Terms used and not defined herein
      are used as incorporated in the Trust Agreement referenced below, or if not defined therein, in Annex A to the Master Indenture, dated as of August 1, 2001 (as amended, supplemented and otherwise modified to date, the “Indenture”), between World Financial Network Credit Card Master Note Trust, as issuer, and MUFG Union Bank, N.A., as indenture trustee (the “Indenture Trustee”).

    

    

    WHEREAS, the Company and the
      Resigning Trustee are parties to a Trust Agreement, dated as of July 27, 2001 and amended and restated as of August 1, 2001 (as so amended and restated, the “Trust
          Agreement”), of World Financial Network Credit Card Master Note Trust (the “Issuer”);

    

    

    WHEREAS, the Issuer has
      previously issued certain series of securities under the Indenture, of which the series listed on Exhibit A hereto remain outstanding as of the date hereof,
      and may from time to time hereafter issue additional series of securities;

    

    

    WHEREAS, the Company appointed
      the Resigning Trustee as Owner Trustee under the Trust Agreement;

    

    

    WHEREAS, Section 9.2 of the Trust Agreement provides that the Owner Trustee may at any time resign with respect to its role by giving written notice of such resignation to the Company,
      effective upon the acceptance by a successor Owner Trustee of its appointment as successor Owner Trustee;

    

    

    WHEREAS, Section 9.2 of the Trust Agreement provides that, if the Owner Trustee shall resign, the Company shall promptly appoint a successor.

    

    

    WHEREAS, Section 9.3 of the Trust Agreement provides that any successor Owner Trustee shall deliver a written acceptance of its appointment to the Resigning Trustee and to the Company, and
      thereupon the resignation of the Resigning Trustee shall become effective, and the successor Owner Trustee shall have all of the rights, powers and duties of the Owner Trustee under such Trust Agreement.

    
      

      
        

      

    

    

    

    WHEREAS, the Resigning Trustee
      desires to resign as Owner Trustee under the Trust Agreement;

    

    

    WHEREAS, the Company desires to
      appoint Successor Trustee as successor owner trustee to succeed the Resigning Trustee in such capacity under the Trust Agreement; and

    

    

    WHEREAS, Successor Trustee is
      willing to accept such appointment as successor owner trustee under the Trust Agreement;

    

    

    NOW, THEREFORE, the Company, the
      Resigning Trustee and the Successor Trustee, for and in consideration of the premises and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, hereby consent and agree as follows:

    

      

      1. THE RESIGNING TRUSTEE:

    

    

    1.1     Pursuant to Section 9.2 of the Trust Agreement, on the date hereof, Resigning Trustee hereby notifies the Company that Resigning
      Trustee is resigning as Owner Trustee under the Trust Agreement.

    

    

    1.2     Resigning Trustee hereby represents and warrants to Successor Trustee that:

    

    

    	

          	(a)	
            It has performed and fulfilled prior to the date hereof, each of its duties, obligations and responsibilities required of the Resigning Trustee, in its capacity as
              owner trustee under the Trust Agreement.

          

    

    

    	

          	(b)	
            No covenant or condition contained in the Trust Agreement has been waived by Resigning Trustee.

          

    

    

    	

          	(c)	
            There is no action, suit or proceeding pending or, to the best knowledge of responsible officers of Resigning Trustee, threatened against Resigning Trustee before any
              court or any governmental authority arising out of any act or omission of Resigning Trustee as Owner Trustee under the Trust Agreement.

          

    
      

      
        

      

    

    

    

    	

          	(d)	
            As of the effective date of this Acceptance Agreement, Resigning Trustee will hold no moneys or property under the Trust Agreement.

          

    

    

    	

          	(e)	
            As of the effective date of this Acceptance Agreement, Resigning Trustee has not executed, authenticated or delivered any certificate representing a beneficial interest
              in the Issuer.

          

    

    

    	

          	(f)	
            This Acceptance Agreement has been duly authorized, executed and delivered on behalf of Resigning Trustee and constitutes its legal, valid and binding obligation,
              enforceable in accordance with its terms.

          

    

    

    	

          	(g)	
            To the best knowledge of responsible officers of the Resigning Trustee, no event has occurred and is continuing which is, or after notice or lapse of time or both would
              become an Event of Default under the Indenture.

          

    

    

    1.3     Resigning Trustee hereby assigns, transfers, delivers and confirms to Successor Trustee all right, title and interest of the
      Resigning Trustee in and to the trust under the Trust Agreement and all rights, powers and trusts of the Owner Trustee (except for fees and expenses of the Owner Trustee collected prior to the date hereof) under the Trust Agreement.  Resigning
      Trustee shall execute and deliver such further instruments and shall do such other things as Successor Trustee may reasonably require so as to more fully and certainly vest and confirm in Successor Trustee all the rights, powers and trusts hereby
      assigned, transferred, delivered and confirmed to the Owner Trustee as Owner Trustee under the Trust Agreement.

    

    

    1.4.     Any fees and expenses (including without limitation, fees and expenses of counsel) incurred by the Resigning Trustee in
      complying with the requirements set forth in Section 1.3 above of the Successor Trustee shall be invoiced to, and paid by, the Company on or prior to the date hereof.

    

    

    1.5     Notwithstanding this Acceptance Agreement and the resignation of the Resigning Trustee, the Resigning Trustee shall retain all
      rights and entitlements relating to its service as Owner Trustee under the Trust Agreement arising or accruing on or before the effective date of this Acceptance Agreement, including without limitation, all entitlements to the payment of its fees and
      reimbursement of its expenses (including without limitation, fees and expenses of counsel), regardless of when such amounts become payable or are paid.

    
      

      
        

      

    

    

    

    2. THE COMPANY:

    

    

    2.1    The Company hereby accepts the resignation of Resigning Trustee as Owner Trustee under the Trust Agreement and waives the
      requirement of advance notice thereof set forth in Section 9.2 the Trust Agreement.

    

    

    2.2     The Company hereby certifies that it has duly authorized certain officers or other representatives to: (a) accept Resigning
      Trustee’s resignation as Owner Trustee under the Trust Agreement; (b) appoint Successor Trustee as Owner Trustee under the Trust Agreement; and (c) amend, execute and deliver such agreements and other instruments as may be necessary or desirable to
      effectuate the succession of Successor Trustee as Owner Trustee under the Trust Agreement.

    

    

    2.3     The Company hereby appoints Successor Trustee as Owner Trustee under the Trust Agreement to succeed to, and hereby vests
      Successor Trustee with, all the rights, powers, duties and obligations of Resigning Trustee under the Trust Agreement with like effect as if originally named as Owner Trustee in the Trust Agreement.

    

    

    2.4     The Company hereby represents and warrants to Resigning Trustee and Successor Trustee that:

    

    

    	

          	(a)	
            It is an organization duly and validly organized and existing pursuant to the laws of its jurisdiction of organization.

          

    

    

    	

          	(b)	
            The Trust Agreement was validly and lawfully executed and delivered by it.

          

    

    

    	

          	(c)	
            It has performed or fulfilled prior to the date hereof, and will continue to perform and fulfill after the date hereof, each of its covenants, agreements, conditions,
              obligations and responsibilities under the Trust Agreement.

          

    

    

    	

          	(d)	
            Other than as set forth in Section 2.1, no covenant or condition contained
              in the Trust Agreement has been waived by the Company.

          

    
      

      
        

      

    

    

    

    	

          	(e)	
            There is no action, suit or proceeding pending or, to the best of its knowledge, threatened against the Company before any court or any governmental authority arising
              out of any act or omission by it under the Trust Agreement.

          

    

    

    	

          	(f)	
            This Acceptance Agreement has been duly authorized, executed and delivered on behalf of the Company and constitutes its legal, valid and binding obligation, enforceable
              in accordance with its terms.

          

    

    

    	

          	(g)	
            All conditions precedent relating to the appointment of Citicorp Trust Delaware, National Association as Successor Trustee under the Trust Agreement have been complied
              with by it.

          

    

    

    3. THE SUCCESSOR TRUSTEE:

    

    

    3.1     Successor Trustee hereby represents and warrants to Resigning Trustee and to the Company that:

    

    

    	

          	(a)	
            It is a national banking association duly organized and validly existing in good standing under the federal laws of the United States, and it has all requisite
              corporate power and authority to execute, deliver and perform its obligations under this Acceptance Agreement.

          

    

    

    	

          	(b)	
            This Acceptance Agreement has been duly authorized, executed and delivered on its behalf and will constitute its legal, valid and binding obligation, enforceable in
              accordance with its terms, except as the same may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally and by general principles of equity and except for any
              other limitations or qualifications customarily set out in legal opinions of recognized and reputable counsel in the relevant jurisdiction with respect to the enforceability of agreements of this nature.

          

    

    

    3.2     Successor Trustee hereby accepts its appointment as successor owner trustee under the Trust Agreement and accepts the rights,
      powers, duties and obligations of Resigning Trustee as Owner Trustee under the Trust Agreement, upon the terms and conditions set forth therein, with like effect as if originally named as Owner Trustee under the Trust Agreement.

    
      

      
        

      

    

    

    

    3.3     Successor Trustee is eligible under the provisions of Section
          9.1 of the Trust Agreement to act as Owner Trustee under the Trust Agreement.

    

    

    4. MISCELLANEOUS:

    

    

    4.1     This Acceptance Agreement and the resignation, appointment and acceptance effected hereby shall be effective as of May 25, 2021.

    

    

    4.2     Resigning Trustee hereby acknowledges receipt of payment in full of compensation for all services rendered by Resigning Trustee
      in its capacity as Owner Trustee under the Trust Agreement and reimbursement in full of the expenses, disbursements and advances incurred or made by Resigning Trustee in its capacity as Owner Trustee in accordance with the provisions of the Trust
      Agreement.  Resigning Trustee acknowledges that it relinquishes any lien it may have upon all property or funds held or collected by it to secure any amounts due it.  The Company acknowledges its obligation set forth in Section 7.1 of the Trust Agreement to indemnify Resigning Trustee for, and to hold Resigning Trustee harmless against, any loss, liability or expense incurred without gross negligence,
      bad faith or willful misconduct on the part of Resigning Trustee and arising out of or in connection with the Trust Agreement (which obligation shall survive the execution hereof).

    

    

    4.3     The parties hereto agree that the Successor
        Trustee shall have no liability for any actions taken or omitted to be taken by the Resigning Trustee while it served as the Owner Trustee under the Trust Agreement or any other event or action related to the Trust Agreement that occurred prior to
        the date hereof.

    

    

    4.4     This Acceptance Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without
      regard to conflicts of laws principles thereof that would result in the application of laws of any other jurisdiction.

    

    

    4.5     This Acceptance Agreement may be executed in any number of counterparts each of which shall be an original, but such
      counterparts shall together constitute but one and the same instrument.

    

    

    4.6     No party hereto shall at any time institute against the Company, or solicit or join or cooperate with or encourage any
      institution against the Company of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any United States federal or state bankruptcy or similar law in connection with any obligation relating
      to this Acceptance Agreement or the Trust Agreement.

    
      

      
        

      

    

    IN WITNESS WHEREOF, the parties
      hereto have caused this Acceptance Agreement of Resignation, Appointment and Acceptance to be duly executed, all as of the day and year first above written.

    

    

    	 	
            WFN CREDIT COMPANY, LLC

          
	 	 
	 	
            By:  /s/ Michael Blackham

          
	 	
            Name: Michael Blackham

          
	 	
            Title:   Treasurer

          
	 	 
	 	 
	 	 
	 	
            U.S. BANK TRUST NATIONAL

            ASSOCIATION, as Resigning Trustee

          
	 	 
	 	
            By:  /s/ Jessica J. Elliot

          
	 	
            Name: Jessica J. Elliot

          
	 	
            Title:   Vice President

          
	 	 
	 	 
	 	 
	 	
            CITICORP TRUST DELAWARE,

            NATIONAL ASSOCIATION,

          
	 	
            as Successor Trustee

          
	 	 
	 	
            By: /s/ Jason Concavage

          
	 	
            Name: Jason Concavage

          
	 	
            Title:   Senior Vice President

          

    

    

    
      

      
        

      
        

        

      

    

    EXHIBIT A

    

    

    	

          	1.	
            Series 2009-VFN, issued pursuant to that certain Fourth Amended and Restated Series 2009-VFN Indenture Supplement, dated as of February 8, 2014, between Issuer and the
              Indenture Trustee

          

    

    

    	

          	2.	
            Series 2016-A, issued pursuant to that certain Indenture Supplement, dated as of July 27, 2016, between Issuer and the Indenture Trustee

          

    

    

    	

          	3.	
            Series 2018-B, issued pursuant to that certain Indenture Supplement, dated as of September 27, 2018, between Issuer and the Indenture Trustee

          

    

    

    	

          	4.	
            Series 2018-C, issued pursuant to that certain Indenture Supplement, dated as of November 7, 2018, between Issuer and the Indenture Trustee

          

    

    

    	

          	5.	
            Series 2019-A issued pursuant to that certain Indenture Supplement, dated as of February 20, 2019, between Issuer and the Indenture Trustee

          

    

    

    	

          	6.	
            Series 2019-B issued pursuant to that certain Indenture Supplement, dated as of June 26, 2019, between Issuer and the Indenture Trustee

          

    

    

    	

          	7.	
            Series 2019-C issued pursuant to that certain Indenture Supplement, dated as of September 26, 2019, between Issuer and the Indenture Trustee

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