Exhibit 10.5

 

AMENDMENT NUMBER 5 TO OPTION AGREEMENT

 

THIS AMENDMENT NUMBER 5 TO OPTION AGREEMENT (the “Fifth Amendment”), dated as of
September 17, 2004, is entered into by and between Dynamic Materials
Corporation, a Delaware corporation (“DMC”), and Spin Forge, LLC, a California
limited liability company (“Owner”), with regard to the following:

 

A.                                   Owner owns certain real property and
improvements located in El Segundo, California (the “Property”).

 

B.                                     DMC and Owner entered into that certain
Option Agreement dated March 18, 1998 (the “Option Agreement”), which provides
DMC with an option (the “Option”) to purchase the Property.

 

C.                                     DMC and Owner amended the Option
Agreement on four separate occasions, by Amendment Number 1 to Option Agreement
dated June 2001, Amendment Number 2 to Option Agreement dated May 20, 2002,
Amendment Number 3 to Option Agreement dated March 14, 2003, and Amendment
Number 4 to Option Agreement dated April 22, 2004 (the Option Agreement as so
amended is referred to herein as the “Amended Option Agreement”). Among other
things, the amendments changed the date on which the Option becomes exercisable.

 

D.                                    The parties are executing this Fifth
Amendment in order to again change the date on which Option becomes exercisable
and to make certain other changes.

 

Accordingly, the parties agree as follows:

 

1.                                      AMENDMENT OF AGREEMENT.  The Amended
Option Agreement is amended as follows in this Section 1.

 

1.1                                 SECTION 1. C. OF THE AMENDED OPTION
AGREEMENT IS HEREBY DELETED AND RESTATED IN ITS ENTIRETY AS FOLLOWS:

 

C.                                     Time of Exercise. The Option may be
exercised by DMC beginning after November 1, 2006, and until the expiration of
the Term.

 

1.2                                 Section 2 of the Amended Option Agreement is
hereby deleted and restated in its entirety as follows:

 

2.                                       Purchase Price.  The purchase price for
the Property upon exercise of the Option (the “Purchase Price”) shall be
$2,880,000; provided, however, that if the Option is exercised after January 31,
2007, the Purchase Price shall equal (1) the fair market value of the Property
at the time the Option is exercised (as determined according to the same
procedure set forth in Article 1, Section C of the Operating Lease for the
determination of “Extended Term Base Rent”), or (2) $2,880,000, whichever is
greater; and provided,

 

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further, that if the Option is exercised on or before January 31, 2007, but the
purchase of the Property is not closed on or before January 31, 2007 due to the
default of the Owner, the Purchase Price shall be $2,880,000, provided that the
purchase of the Property is closed within a reasonable time after Owner has
cured such default.

 

2.                                      EFFECTIVE DATE.  This Fifth Amendment
shall be effective as of the first date written above.

 

3.                                      FULL FORCE AND EFFECT.  Except as
amended by this Fifth Amendment, the Amended Option Agreement shall remain in
full force and effect.

 

4.                                      GENERAL PROVISIONS.

 

4.1                                 AMENDMENT AND MODIFICATION.  THIS FIFTH
AMENDMENT MAY NOT BE AMENDED, MODIFIED OR SUPPLEMENTED EXCEPT PURSUANT TO AN
INSTRUMENT IN WRITING SIGNED BY BOTH OF THE PARTIES HERETO.

 

4.2                                 ATTORNEYS’ FEES.  IF EITHER PARTY TO THIS
FIFTH AMENDMENT COMMENCES AN ACTION (INCLUDING ARBITRATION) AGAINST THE OTHER
PARTY TO INTERPRET OR ENFORCE ANY OF THE TERMS OF THIS FIFTH AMENDMENT, OR
BECAUSE OF THE OTHER PARTY’ S BREACH OF ANY PROVISION SET FORTH IN THIS FIFTH
AMENDMENT, THE LOSING PARTY SHALL PAY THE PREVAILING PARTY’S REASONABLE
ATTORNEYS’ FEES, COSTS AND EXPENSES, COURT COSTS AND OTHER COSTS OF ACTION
INCURRED IN CONNECTION WITH THE PROSECUTION OR DEFENSE OF SUCH ACTION, WHETHER
OR NOT THE ACTION IS PROSECUTED TO A FINAL JUDGMENT. IN ADDITION TO THE
FOREGOING AWARD OF ATTORNEYS’ FEES, THE PREVAILING PARTY SHALL BE ENTITLED TO
ITS REASONABLE ATTORNEYS’ FEES INCURRED IN ANY POST JUDGMENT PROCEEDING TO
ENFORCE ANY JUDGMENT IN CONNECTION WITH THIS FIFTH AMENDMENT. THIS PARAGRAPH IS
SEPARATE AND SEVERAL AND SHALL SURVIVE THE MERGER OF THIS PARAGRAPH INTO ANY
JUDGMENT.

 

4.3                                 BINDING EFFECT.  ALL THE TERMS AND
PROVISIONS OF THIS FIFTH AMENDMENT SHALL BE BINDING UPON AND INURE TO THE
BENEFIT OF THE PARTIES HERETO AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS.

 

4.4                                 GOVERNING LAW.  THE VALIDITY AND EFFECT OF
THIS FIFTH AMENDMENT SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF CALIFORNIA (WITHOUT REGARD TO CONFLICTS OR CHOICE OF LAWS PRINCIPLES).

 

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4.5                                 Counterparts.  This Fifth Amendment may be
executed in two or more counterparts, each of which shall be deemed an original,
but together which shall constitute one document.

 

IN WITNESS WHEREOF, both parties have caused this Fifth Amendment to be duly
executed as of the date first written above.

 

 

DMC

 

 

 

Dynamic Materials Corporation,

 

a Delaware corporation

 

 

 

 

 

By:

 

 

 

 

 

Its:

 

 

 

 

 

 

 

OWNER

 

 

 

Spin Forge, LLC,

 

a California limited liability company

 

 

 

 

 

By:

 

 

 

 

 

Its:

 

 

 

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