**Exhibit 10.2**

 

**SUBLEASE**

 

THIS SUBLEASE (the“Sublease”), entered into as of this 16th day of December, 2000, is by andbetween Mypodiamond, Inc., a Delaware corporation, having its principal officeand place of business at 200 North Repauno Ave., Gibbstown, New Jersey 08027(“SUBLANDLORD”), and Dynamic Materials Corporation, a Delaware corporation,having its principal office and place of business at 551 Aspen Ridge Drive,Lafayette, Colorado 80026 (“SUBTENANT”).

 

**BACKGROUND**

 

(a)           OnMarch 31, 1999, SUBLANDLORD purchased the assets of the polycrystalineindustrial diamond business (the “Business”) from E.I. Dupont de Nemours &Company (“Dupont”);

 

(b)           Dupontis a tenant with respect to a lease dated October 19, 1985 (the “Owner Lease”)with the Daniel Harper Estate as fee simple owners (“Owners”) of anapproximately 378 acre tract of land situate in Fayette County, Pennsylvania(the “Dunbar Facility”), of which approximately 27 acres (which includes theright to use the Blue Stone Mine (“Blue Stone Mine”) located thereon(collectively with the Blue Stone Mine the “Leased Premises”) is used in theBusiness;

 

(b)           OnJuly 22, 1996, Dupont sold its explosion bonding clad metal business(“Explosion Business”) to SUBTENANT and entered into a sublease with SUBTENANTfor the Leased Premises (the “Dupont Sublease”);

 

(c)           Dupontand Owners have terminated the Owner Lease as of December 16, 2000;

 

----

 

(d)           SUBLANDLORDentered into a new lease with Owners effective December 16, 2000 (“MasterLease”) for the Dunbar Facility.

 

(e)           SUBLANDLORDwishes to enter into a new sublease with the SUBTENANT.

 

Therefore, it isthe intent of the parties hereto that SUBLANDLORD shall sublease the LeasedPremises to SUBTENANT upon and subject to the conditions and limitationsherein.

 

NOW, THEREFORE,incorporating the foregoing Background herein by this reference, the partieshereto, intending to be legally bound, agree as follows:

 

### 1.             MASTERLEASE. By the MASTER LEASE dated as of September 21, 2000 and effective onDecember 16, 2000 (the “Effective Date”) by and between the Owners andSUBLANDLORD, as tenant, Owners have leased to SUBLANDLORD the Dunbar Facility. ThisSublease is made subject to the MASTER LEASE except where the provisions of theMASTER LEASE are inconsistent with the provisions of this Sublease, in whichcase the provisions of this Sublease will control. Where in the MASTER LEASEthere are duties owed by Owners to SUBLANDLORD which are necessary for theproper enjoyment of this Sublease, SUBLANDLORD will make all commercially reasonableefforts to obtain the performance of such duties by Owners in favor ofSUBTENANT, but SUBLANDLORD shall not be liable for the failure of Owners underthe terms of MASTER LEASE to perform said duties nor for the result of suchfailure. If Owners are in default of its obligations and SUBLANDLORD isunsuccessful in obtaining Owners’ performance, then upon SUBTENANT’s writtenrequest, SUBLANDLORD shall assign to SUBTENANT its rights to enforce suchdefaulted obligations of the MASTER LEASE against Owners. SUBTENANT herebyagrees to faithfully and 

 

2

----

 

### promptly perform all ofthe obligations and duties of SUBLANDLORD to Owners under the MASTER LEASE withrespect only to the Leased Premises except the obligation of SUBLANDLORD to payrent, which obligation SUBLANDLORD agrees to continue to perform during theterm hereof.

###  

### 2.             LEASEDPREMISES. SUBLANDLORD, for and in consideration of the rents, covenants andagreements hereinafter reserved, mentioned and contained on the part ofSUBTENANT, its successors and permitted assigns, does hereby lease, rent anddemise unto SUBTENANT, and SUBTENANT does hereby take and hire, upon andsubject to the conditions and limitations hereinafter expressed, a portion ofthe Dunbar Facility .

###  

The DunbarFacility comprises the tract of land described as follows:

 

ALL THAT CERTAIN TRACT ORPARCEL OF LAND situate in the Township of Dunbar, County of Fayette andCommonwealth of Pennsylvania, containing approximately 378 acres, more or less;said tract is as shown on the Mine Survey of the former New Castle Lime &Stone Company Mine, prepared by Sucevic Engineering, Hopwood, PA, in September1979 (the “Plan”) attached hereto, made a part hereof and marked Exhibit “A-1.”

 

The Leased Premisesis the portion of the Dunbar Facility containing approximately 27 acres shownon the Plan attached hereto as Exhibit “A-2” and described as follows:  the surface land bounded by (a) a 2,700 footlength of the Dunbar-Ohiopyle Road (L.R. 26047) (at its centerline) to theSouthwest; (b) a line extending from the intersection of the mine access roadand Dunbar-Ohiopyle Road approximately 800 feet to the edge of the mine face;(c) the mine face starting from the edge of the mine face and extending along themine face to a point beyond the explosives magazine that is approximately 600feet from the centerline of the easternmost mine portal; and (d) a line fromthe mine face (as extended) traveling approximately 700 feet to theDunbar-Ohiopyle Road (L.R. 26047).

 

3

----

 

In addition,SUBLANDLORD hereby leases, rents and demises unto SUBTENANT as part of theLeased Premises the right to enter and use certain of the underground passagesof the Blue Stone Mine, such passages being shown on the Plan attached asExhibit “A-2,” upon and subject to the limitations hereinafter expressed. ThePlan is marked to show the primary access and operating areas, the emergencyaccess areas, and the areas for explosions (the “Explosion Areas”). Except as expressly provided herein,SUBTENANT shall have no right to the surface portion of the Blue Stone Mine orto the underground passages which are not a part of the Leased Premises.

 

The LeasedPremises are subleased subject to the following, in addition to the MASTERLEASE:

 

##### (1)           allmatters of record concerning use of the Leased Premises and any state of factsthat an inspection or survey of the Leased Premises would disclose;

#####  

##### (2)           presentand future zoning laws, ordinances, resolutions, and regulations of all boards,bureaus, or commissions and bodies of any municipal, county, state, or federalsovereign now or hereafter having or acquiring jurisdiction of the LeasedPremises and the use and improvements thereof;

#####  

##### (3)           theeffect of all present and future laws and ordinances relating to SUBTENANT’suse of the Leased Premises;

#####  

##### (4)           violationsof laws and ordinances that might be disclosed by an examination and inspectionor search of the Leased Premises as of the date first above written;

 

4

----

 

##### (5)           exceptas set forth in Section 12, the condition and state of repair of the LeasedPremises as the same may be on the Effective Date;

#####  

##### (6)           alltaxes, assessments, water meter, and water charges, sewer rents commencing asof the Effective Date.

#####  

##### (7)           existingoil and gas leases on the Leased Premises, under which SUBTENANT is notpermitted to drill within the area actually occupied by the hereinbeforereferred to Blue Stone Mine; and

#####  

##### (8)           theright of the Owners to enter on the surfaceland of Leased Premises to cut andremove timber (provided however that SUBLANDLORD AND SUBTENANT agree that eachwill use reasonable efforts to prevent such activities within the LeasedPremises).

#####  

### 3.             TOLLMANUFACTURING AGREEMENT. Pursuant to an assignment from Dupont dated as ofMarch 31, 2000, SUBLANDLORD was assigned the Tolling/Services Agreement forIndustrial Diamonds dated as of July 22, 1996 between Dupont and the SUBTENANT(the “Tolling Agreement”), pursuant to which SUBTENANT has agreed to performcertain services for the Business supplied originally by Dupont and now bySUBTENANT, involving detonating materials on the Leased Premises to makeindustrial diamonds with each party acknowledges is in full force and effect asof the date of this Sublease..

###  

### 4.             REQUIREMENTSOF PUBLIC AUTHORITY. During the term of this Sublease, SUBTENANT, at itsown cost and expense, shall promptly observe and comply with all present andfuture laws, ordinances, requirements, orders, directives, rules, andregulations of the Federal, State, County, Town, Village, and City Governments,and of all other governmental authorities affecting the Leased Premises or anypart thereof whether the same are in force at the 

 

5

----

 

### commencement of the termof this Sublease or may in the future be passed, enacted or directed, and,except as set forth in Section 12 herein, SUBTENANT shall pay all costs,expenses, liabilities, losses, damages, fines, penalties, claims, and demands,including reasonable counsel fees, that may in any manner arise out of or beimposed upon SUBLANDLORD because of the failure of SUBTENANT to comply with thecovenants of this Paragraph. Without limiting the foregoing, SUBTENANT, atSUBTENANT’s cost and expense, shall obtain and maintain all licenses, permitsand approvals necessary to perform explosion bonding operations and servicesunder the Tolling Agreement and SUBLANDLORD shall take all reasonable actions(so long as no out-of-pocket costs are incurred on its part) to assistSUBTENANT in obtaining the same.

###  

### 5.             TERM.Unless sooner terminated as provided herein, the term of this Sublease shallcommence on December 16, 2000, said date being hereinafter referred to as the“Commencement Date,” and shall expire at 11:59 p.m., eastern standard time, onDecember 15, 2005, provided, however, that assuming there is no Event ofDefault existing, or with the passage of time would exist, the term of thisSublease may be extended at SUBTENANT’S option as follows:  for a firstadditional term of five (5) years from December 16, 2005 to expire at 11:59p.m., eastern standard time, on December 15, 2010; for a second additional termof five (5) years from December 16, 2010 to expire at 11:59 p.m., easternstandard time on December 15, 2015; for a third additional five (5) year termfrom December 16, 2015 to expire at 11:59 eastern standard time on December 15,2020;,for a forth additional term from December 16, 2020 to expire at 11:59eastern standard time on December 15, 2025; and for a fifth four(4) year termto commence on December 16, 2025 to expire at 11:59 p.m. eastern standard timeon December 15, 2029 in each case by SUBTENANT giving SUBLANDLORD writtennotice of the exercise of such extension option prior to August 1stof the year prior to the year of expiration.

 

6

----

 

### 6.             RENT.The rent for the Leased Premises shall be as follows: From and after theCommencement Date and to the expiration or earlier termination of thisSublease, SUBTENANT shall pay monthly, in advance, the following sums:  From the date hereof to December 15, 2001,the yearly rental shall be SEVENTY-EIGHT THOUSAND SEVEN HUNDRED AND FIFTY and00/100 ($78,750.00) DOLLARS to be paid in twelve equal monthly installmentscommencing on December 16, 2000 and continuing thereafter as provided herein. Thisrental rate is referred to as the “Annual Rent” and is subject to increase asprovided herein. As used in this Section:

 

(a)           “Index”shall mean the “Consumer Price Index for Urban Wage Earners and ClericalWorkers” “(1967=100)” specified for “All Items”, relating to PA-NJ-DE-MD andissued by the Bureau of Labor Statistics of the United States Department ofLabor. In the event the Index shall hereafter be converted to a differentstandard reference base or otherwise revised, the determination of thePercentage Increase (defined below) shall be made with the use of suchconversion factor, formula or table for converting the Index as may be publishedby the Bureau of Labor Statistics or, if said Bureau shall not publish thesame, then with the use of such conversion factor, formula or table as may bepublished by Prentice Hall, Inc., or, failing such publication, by any othernationally recognized publisher of similar statistical information. In theevent the Index shall cease to be published, then there shall be substitutedfor the Index such other index as SUBLANDLORD and SUBTENANT shall agree upon,and, if they are unable to agree within ninety (90) days after the Index ceasesto be published, such matter shall be determined in Philadelphia, Pennsylvaniaby arbitration in accordance with the Rules of the American ArbitrationAssociation.

 

7

----

 

(b)           “NewIndex” shall mean the Index reported for the November immediately precedingeach Anniversary Date.

 

(c)           “CurrentIndex” shall mean the index derived for the November of the year immediatelypreceding the year in which a New Index is derived.

 

(d)           “AnniversaryDate” shall mean December 16, 2001 and each successive December 16thduring the term of this Sublease.

 

(e)           “PercentageIncrease” shall mean the percentage equal to the fraction, the numerator ofwhich shall be the New Index less the Current Index, and the denominator ofwhich shall be the Current Index.

 

The Annual Rentshall be increased on each Anniversary Date by the Percentage Increase, if any,as provided above. It is the intention of the parties that increases in theAnnual Rent shall be determined based upon applying the Percentage Increase tothe Annual Rent as adjusted in this Section 6. All other sums, charges oramounts which SUBTENANT has agreed to pay to SUBLANDLORD pursuant to thisSublease shall be hereinafter referred to as “Additional Rent,” and shall becollectible as rent. The Annual Rent and Additional Rent shall be payable atthe office of SUBLANDLORD at the address herein contained or at such otherplace or places as SUBLANDLORD shall from time to time give SUBTENANT writtennotice. In the event that the New Index is not available by the AnniversaryDate, SUBTENANT shall pay the Annual Rent at the then current rate until suchNew Index is available, and shall, with the next scheduled payment thereafter,pay all amounts that would have otherwise been due had the New Index beenavailable.

 

8

----

 

### 7.             USE.

###  

#### (a)           TheLeased Premises shall be used only for (i) the operation of the ExplosionBusiness, including the explosion bonding of clad metals, and (ii) performanceof services pursuant to the Tolling Agreement (together, the “Permitted Use”). SUBTENANTshall not use or occupy the Leased Premises, or permit the same to be used oroccupied, for any purpose other than the Permitted Use. In particular, SUBTENANTshall have no rights to mine or extract minerals from any portion of the LeasedPremises. Only the Explosion Areas may be used for explosions.

####  

#### (b)           Inthe event SUBTENANT’s operations within the limestone mine situated on theLeased Premises result in necessary removal of rocks from the Blue Stone Mine,SUBTENANT shall pile said rocks so removed in a nearby place to be designatedby SUBLANDLORD for disposal by Owners. SUBTENANT shall have no right to therock thus removed nor to the proceeds therefrom. Owners and SUBLANDLORD shallhave the right of egress and ingress in order to remove such rocks at their ownrisk.

####  

#### (c)           SUBTENANTacknowledges that the Blue Stone Mine can become damaged by overuse or improperuse, in which case the Blue Stone Mine may be required to be closed or thefrequency of explosions performed in the Blue Stone Mine may be required to belimited. In order to prolong the life of the Blue Stone Mine, SUBTENANT agreesto use no more than 17,500 lbs. of Explosive (as hereinafter defined) perdetonation. As used in this Sublease, “Explosive” means the ammonium nitrateexplosive material produced by SUBTENANT or such other materials that areapproved by SUBLANDLORD from time to time in accordance with the operatingprocedures used by SUBTENANT, as amended from time to time by SUBTENANT inconsultation with and approval from SUBLANDLORD which 

 

9

----

 

#### approval shall not beunreasonably withheld (the “Procedures”). SUBTENANT shall not manufacture,test, use, or destroy any chemical or explosive materials on the LeasedPremises, other than the Explosive identified in the Procedures, without theexpress written consent of SUBLANDLORD, which consent shall not be unreasonablywithheld. SUBTENANT agrees to use and maintain the Blue Stone Mine in such acondition that maintains and maximally prolongs its integrity and useful life,provided, however, that SUBTENANT shall have no responsibility to SUBLANDLORDfor adverse effects to the integrity or useful life of the Blue Stone Minecaused by (i) SUBTENANT’s use of Explosives as specified in this paragraph, or(ii) SUBTENANT’s operations according to the Procedures. SUBTENANT agrees topromptly notify SUBLANDLORD of any actions which it knows or reasonablybelieves may result in, or is likely to have resulted in, soil or groundwatercontamination. In addition, SUBTENANT agrees to periodically inspect and repairthe Blue Stone Mine, including without limitation the underhangs in the BlueStone Mine, so that the Blue Stone Mine is (i) maintained in a safe, lawfulcondition during the term of this Sublease, and (ii) in substantially the samecondition at the end of the term of this Sublease as it was at the commencementdate of the DuPont Sublease, subject to normal wear and tear.

####  

#### (d)           SUBTENANTacknowledges that hazards may be involved in conducting explosions in the BlueStone Mine, including providing the services under the Tolling Agreement. Accordingly,SUBTENANT agrees to perform all work at the Leased Premises in a careful andworkmanlike manner and to take all reasonably necessary precautions in theprocessing, handling, transportation, and disposal of Explosives, to avoiddamage to property or pollution and in compliance with all applicable laws,rules and regulations. In that 

 

10

----

 

#### regard, SUBTENANT shallprovide security precautions reasonably required by SUBLANDLORD or Owners tosafely process, handle, transport, and dispose of the Explosives.

####  

#### (e)           SUBLANDLORDshall have the right to immediately require the suspension of the explosions onthe Leased Premises upon written notice to SUBTENANT, without liability on thepart of SUBLANDLORD to SUBTENANT, if at any time SUBLANDLORD in its reasonablejudgment determines that SUBTENANT has materially violated any materialprovision of this Section 7. The right to conduct explosions should remainsuspended until SUBTENANT corrects such violation; provided that SUBTENANTshall have a right of access to the Leased Premises to correct such violations.If SUBTENANT fails to correct any such violation within the time periods setforth in Section 13(a)(iii), an Event of Default shall exist.

####  

### 8.             TAXESAND ASSESSMENTS.

###  

#### (a)           Forthe purpose of this Sublease, the term “Taxes” shall mean all real estate taxesand assessments, including substitutes therefor or supplements thereto,assessed upon, levied against or imposed on the Leased Premises and anyimprovements, fixtures, and equipment located thereon.

####  

#### (b)           Duringthe term of this Sublease, SUBTENANT shall pay to SUBLANDLORD, as AdditionalRent, for each year during the term of this Sublease, any increase in the realestate taxes levied against the Dunbar Facility over and above the amount ofsaid real estate taxes for the year 1995. Such payment shall be made toSUBLANDLORD, who shall pay such increase in real estate taxes to Owners. It isunderstood that, because this Sublease is not on a calendar year basis,SUBTENANT’s payment of any increase in real estate 

 

11

----

 

#### taxes levied against theDunbar Facility over and above the 1995 taxes will be made on a prorata basis.

####  

#### (c)           SUBTENANTshall pay any and all taxes on its personal property located on Leased Premisesdirectly to the taxing authority.

####  

### 9.             REPAIRAND MAINTENANCE. SUBTENANT shall have the right to construct, operate, andmaintain on the Leased Premises any and all improvements deemed necessary orconvenient in connection with the Permitted Use, and shall have the further rightat any time to remove any improvements, buildings or other structures of likenature. Facilities, such as protective fencing and gates permanently installed,electrical wiring and air-flow baffle walls are to be left in place at thetermination of this Sublease or removed by SUBTENANT at its expense, atSUBLANDLORD’s option.

###  

SUBTENANT agreesthat, at its sole cost and expense, it shall keep and maintain the surface areaof the Leased Premises (located adjacent to the entrance of the Blue StoneMine), including all improvements constructed thereon by SUBTENANT, in goodrepair, replacement, and appearance during the term of this Sublease and willwith reasonable promptness make all structural and nonstructural, foreseen andunforeseen, and ordinary and extraordinary changes and repairs of every kindand nature which may be required to be made upon or in connection with LeasedPremises or any part thereof in order to keep and maintain Leased Premises insuch good repair, replacement and appearance, so that the Leased Premises arein substantially the same condition at the end of the term of this Sublease asthey were at the commencement of this Sublease, subject to normal wear and tear.Except as may be required pursuant to Section 12 herein, SUBLANDLORD shall notbe required to maintain, repair, or rebuild, or to make any alterations,replacements, or renewals of any nature or description to 

 

12

----

 

Leased Premises or any part thereof, whether ordinaryor extraordinary, structural or nonstructural, foreseen or unforeseen or tomaintain Leased Premises or any part thereof in any way, and except as may berequired pursuant to Section 12 herein, SUBTENANT hereby expressly waives anyright to make repairs or replacements at the expense of SUBLANDLORD which maybe provided for in any statute or law in effect at the time of the execution ofthis Sublease or any statute or law which may thereafter be enacted.

 

### 10.           ACCESS-LEASEDPREMISES, RECORDS AND INSPECTIONS. SUBLANDLORD or SUBLANDLORD’s agents anddesignees, upon notice to SUBTENANT, shall have the right to enter upon theLeased Premises, including without limitation, the underground passages of theBlue Stone Mine, at all reasonable times with reasonable advance notice toSUBTENANT, to examine same or to perform any obligation it may have hereunderor with SUBLANDLORD, including without limitation, cleanup of residue from theunderground passages of the Blue Stone Mine as provided in Section 12.5; or forany reasons pursuant to any rights under the Tolling Agreement; provided suchaccess rights shall not interfere unreasonably with SUBTENANT’s operation ofthe Leased Premises or performance of its obligations under the TollingAgreement.

###  

SUBTENANT agreesto maintain a record of all explosions performed at the Leased Premises in suchform and content as SUBLANDLORD reasonably determines from time to time bynotice to SUBTENANT. Such records shall include, without limitation, (a) thetype and quantity of explosives, and (b) the results of inspections of theLeased Premises and scaling operations inside the Blue Stone Mine. SUBLANDLORDor its designee shall have the right from time to time, at SUBLANDLORD’s cost,to inspect and verify the records kept by SUBTENANT in connection with thisSublease.

 

13

----

 

### 11.           REPRESENTATIONSAND WARRANTIES. Except as expressly provided in this Sublease, SUBLANDLORDmakes no representations, warranties, or guarantees to SUBTENANT, eitherexpressed or implied, with respect to the subject matter of this Sublease. SUBLANDLORDmakes no representations or warranties as to the condition of the undergroundpassages that are not part of the Leased Premises. SUBLANDLORD warrants andrepresents (a) that the MASTER LEASE is subsisting and is in full force andeffect, (b) SUBLANDLORD is not in default under the MASTER LEASE, (c) all rentsand charges due thereunder are and shall be paid in accordance with the termsthereof, and (d) that SUBLANDLORD has full right, power and authority to enterinto this Sublease. SUBLANDLORD is aware of no reason why the Leased Premisescannot be used by SUBTENANT for the Permitted Use. SUBLANDLORD covenants that,so long as SUBTENANT is not in breach of the terms and conditions of thisSublease, SUBTENANT shall peaceably and quietly have, hold, and enjoy theLeased Premises for the term hereof and any extensions to the term. Except asexpressly provided herein, SUBLANDLORD covenants and agrees faithfully toobserve and perform all of the terms, covenants, and conditions of the MASTERLEASE on the part of SUBLANDLORD to be performed with respect to the LeasedPremises (except as required to be performed by SUBTENANT hereunder), andneither to do nor cause to be done, nor suffer, nor permit any act or thing tobe done which would or might cause the MASTER LEASE TO BE canceled, terminated,forfeited, or surrendered or which shall make SUBLANDLORD liable for anydamages, claims, or penalties under the provisions of the MASTER LEASE. SUBLANDLORDcovenants and agrees to keep the MASTER LEASE in good standing for the termhereof and any extension hereof.

 

14

----

 

### **EACHPARTY DISCLAIMS AND WAIVES ALL OTHER WARRANTIES NOT EXPRESSLY SET FORTH HEREININCLUDING ANY IMPLIED WARRANTIES AND WARRANTIES IMPOSED BY LAW, INCLUDINGWARRANTIES OF MERCHANTABILITY, AND WARRANTIES OF FITNESS FOR A PARTICULARPURPOSE.**

###  

The partiesacknowledge that the MASTER LEASE has not been signed by all Owners of theDunbar Facility. SUBLANDLORD has no reason to believe that any of such Ownerswill disturb SUBTENANT’s use or adversely affect SUBTENANT’s peaceful, quietenjoyment and possession of the Leased Premises. In the event that any of suchOwners’ attempt to disturb SUBTENANT’s use of the Leased Premises or adverselyimpact SUBTENANT’s peaceful, quiet enjoyment and possession of the LeasedPremises, SUBLANDLORD and SUBTENANT shall cooperate to promptly seek todiscontinue the acts of such Owners.

 

### 12.           INDEMNIFICATIONAND LIMITATION OF LIABILY. The following indemnification and limitations ofliability shall apply:

###  

###### 12.1         (a)           SUBTENANTagrees to defend, indemnify and hold harmless SUBLANDLORD (including, itsofficers, directors, employees, subcontractors and agents) from and against anyand all liability, claims, injuries (including death resulting therefrom),property damage, fine, penalty or assessment by any public agency, cost orexpense (including costs of defense, settlement and reasonable attorneys’fees), which (1) except as provided in Section 12.2 below, are solely anddirectly caused by the SUBTENANT’s acts including without limitation, acts ofnegligence, gross negligence or willful misconduct of SUBTENANT, its agents,employees or subcontractors associated with, or arising out of the use of theLeased Premises under this Sublease or the Dupont Sublease, or the performanceof this 

 

15

----

 

###### Sublease or the DupontSublease, including any failure to comply with any pertinent Federal, State orlocal law, statute, regulation, rule, or (2) are caused jointly by acts ofSUBTENANT including without limitation, negligence, gross negligence or willfulmisconduct by SUBTENANT, its agents, employees or subcontractors and any actsby any third party or parties. The term “liability” employed in the precedingsentence, and SUBTENANT’s indemnification obligation, includes any strictliability imposed at law, asserted against SUBLANDLORD. SUBTENANT’s obligationsunder this Section 12.1(a) shall survive the expiration or termination of theDupont Sublease or this Sublease.

######  

(b)           SUBLANDLORDagrees to defend, indemnify and hold harmless SUBTENANT (including itsofficers, directors, employees and agents) from and against any and allliability, claim, injury (including death resulting therefrom), propertydamage, fine, penalty or assessment by any public agency, cost or expense(including costs of defense, settlement and reasonable attorneys’ fees), which(1) are solely and directly caused by the negligence, gross negligence ofwillful misconduct of SUBLANDLORD, its agents, employees or subcontractorsassociated with, or arising from SUBLANDLORD’s obligations under thisAgreement, or (2) are caused jointly by acts of SUBLANDLORD including withoutlimitation negligence, gross negligence or willful misconduct by SUBLANDLORD,its agents, employees or subcontractors and any acts by any third party orparties. The term “liabilities” employed in the preceding sentence, andSUBLANDLORD’s indemnification obligation, includes any strict liability imposedat law asserted against SUBTENANT.

 

(c)           Where actsor omissions of the nature referred to in paragraphs 12.1(a) and (b) by bothSUBTENANT and SUBLANDLORD (including their respective officers, directors,employees, subcontractors or agents) have caused any liabilities, 

 

16

----

 

damages, fines, penalties, costs, claims, demands andexpenses, whether or not a third party’s acts or omissions also were causal(other than those arising out of or relating to any date prior to the date ofthis Sublease), SUBTENANT and SUBLANDLORD shall contribute to their commonliability a pro rata share based upon the relative degree of fault of each. Insuch a case the parties shall share all costs equally until (i) there is afinal court judgment allocating fault between the parties, or (ii) the partiesagree to such an allocation.

 

SUBLANDLORD’s indemnity shall not extend to acts oromissions of SUBLANDLORD or any third party with respect to the undergroundpassages of the Blue Stone Mine that are not part of the Leased Premises.

 

(d)           Theprovisions of this paragraph 12 shall survive the termination of this Sublease.

 

###### 12.2         Notwithstandingparagraph 12.1, with respect to any environmental issue (e.g., anyenvironmental contamination, hazardous wastes or substances, or compliance withany environmental law, regulation, and/or ordinance), the followingindemnifications shall apply:

######  

(a)  Except asexpressly provided in this Agreement, SUBTENANT agrees to defend, indemnify andhold harmless SUBLANDLORD (including, its officers, directors, employees andagents) from and against all liabilities (including third party liabilities)losses, claims, damages, property damage, demands, judgments, fines orpenalties insofar as not prohibited by law, costs and expenses (including,without limitation, clean-up costs and reasonable attorneys’ fees anddisbursements) which arise, or are alleged to arise from and after July 22,1996, from or in connection with (1) SUBTENANT’s violation of, or SUBTENANT’snon-compliance with, any federal, state or local environmental law relating to 

 

17

----

 

or arising out ofSUBTENANT’s operation of the Explosion Business or operations under the TollingAgreement at the Leased Premises. The foregoing shall survive the expiration ortermination of this Sublease.

 

(b)  Except asprovided for in Section 12.5, SUBLANDLORD agrees to defend, indemnify and holdharmless SUBTENANT (including its officers, directors, employees, agents andpartners, and the respective officers, directors, employees and agents of saidpartners) from and against all liabilities (including third party liabilities),losses, claims, damages, property damage, demands, judgments, fines orpenalties insofar as not prohibited by law, costs and expenses (including,without limitation, clean-up costs and reasonable attorneys’ fees anddisbursements) which arise, or are alleged to arise after the date hereof andfrom or in connection with (1) SUBLANDLORD’s violation of any federal, state orlocal environmental law, or (2) SUBLANDLORD’s non-compliance with any federal,state or local environmental law relating to the Leased Premises.

 

###### 12.3         Notwithstandingany other provisions in this Sublease to the contrary, neither party nor itsshareholders, partners, agents, contractors, vendors or their employees, shallbe liable to the other for consequential or indirect loss or damage, includingloss of profit, loss of use, loss of operating time, loss of revenue, increasedcosts of producing revenues, cost of capital, or loss of goodwill, even if suchparty has been advised of the possibility of such damages. The parties furtheragree that the waivers and disclaimers of liability, indemnities, releases fromliability, sole remedy provisions and limitations on liability expressed inthis Sublease shall survive termination or expiration of this Sublease, andshall apply (unless otherwise expressly indicated), whether in contract,equity, tort or otherwise, even in the event of the fault, negligence,including sole negligence, strict liability, or breach of 

 

18

----

 

###### warranty of the partyindemnified, released or whose liabilities are limited, and shall extend to thepartners, contractors, subcontractors, suppliers, directors, officers andemployees, agents and related or affiliated entities of such party, and theirpartners, directors, officers and employees.

######  

###### 12.4         Ifthe expiration or earlier termination of this Sublease activates anyenvironmental law requiring audits and/or filings, (except as provided inParagraph 12.5 and 12.6 below) SUBTENANT shall bear the cost of any such auditsand filings required by such laws insofar as they effect the Leased Premisesunless such termination is due to the fault of the SUBLANDLORD.

######  

###### 12.5         SUBLANDLORDand SUBTENANT acknowledge and agree that Dupont has been conducting explosiveoperations in the underground passages of the Leased Premises for thirty (30)years prior to the date of the Dupont Sublease, and that such undergroundpassages contain residue resulting from the detonation of Explosives or otherexplosive materials (the “Explosive Residue”). Dupont has agreed to remove anddispose of the Explosive Residue at a reasonable time prior to expiration ortermination of the MASTER LEASE, or as required by law, whichever is earlier. Dupontshall in consultation with SUBTENANT prepare a plan for removal and disposal ofthe Explosive Residue. Dupont and SUBTENANT agree to share the costs andexpenses of removal and disposal of the Explosive Residue pro rata based on thenumber of years that the parties have been operating at the Leased Premises. Theparties acknowledge that SUBTENANT may, at SUBTENANT’s option and atSUBTENANT’s cost and expense, partially remove and dispose of the ExplosiveResidue in order to facilitate operations of the Permitted Use at the LeasedPremises. SUBLANDLORD shall have no responsibility for (a) the presence of theExplosive Residue in the underground passages of the Leased Premises, or (b)any removal and disposal of Explosive Residue. 

 

19

----

 

###### SUBTENANT shall indemnifySUBLANDLORD for SUBTENANT’s obligation with respect to the foregoing to thefull extent set forth in Section 12.1.

######  

### 13.           DEFAULT.

###  

#### (a)           Anyof the following occurrences, conditions or acts shall constitute an “Event ofDefault” under this Sublease:

####  

(i)            IfSUBTENANT defaults in making payment when due of any installment of Annual Rent,Additional Rent or other amount payable hereunder by SUBTENANT to SUBLANDLORD,and such default continues for a period of fifteen (15) days after SUBLANDLORDshall have given notice to SUBTENANT specifying such default;

 

(ii)           IfSUBTENANT makes an assignment of this Sublease or sublets all or a portion ofthe Leased Premises, except as is provided in Paragraph 17 herein; or

 

(iii)          IfSUBTENANT defaults in the observance or performance of any provision of thisSublease (other than those provisions referenced hereinabove under subparagraph(a)(i) and (ii)), or fails to take the action required by Section 7, and suchdefault continues for a period of thirty (30) days after SUBLANDLORD shall havegiven notice to SUBTENANT specifying such default; provided, however, if suchdefault cannot be wholly cured within such thirty (30) day period, thenSUBTENANT shall not be deemed to be in default so long as SUBTENANT hascommenced the cure of such default within said thirty (30) day period andcontinues, with due diligence, to prosecute said cure;

 

#### (b)           Ifan Event of Default shall occur, the following provisions shall apply andSUBLANDLORD shall have, in addition to all other rights and remedies availableat law or in equity, the rights and remedies set forth therein, which rightsand remedies may be exercised upon or at any time following the occurrence ofan Event of Default unless, prior to 

 

20

----

 

#### such exercise,SUBLANDLORD shall agree in writing with SUBTENANT that the Event(s) of Defaulthas been cured by SUBTENANT in all respects.

####  

(i)            Acceleration of Rent.By notice to SUBTENANT, SUBLANDLORD shall have the right to accelerate allAnnual Rent and any other amount due hereunder and otherwise payable ininstallments over the remainder of the Term, and, at SUBLANDLORD’s option, anyother Additional Rent to the extent that such Additional Rent can be determinedand calculated to a fixed sum; and the amount of accelerated rent to thetermination date, without further notice or demand for payment, shall be dueand payable by SUBTENANT within five (5) days after SUBLANDLORD has so notifiedSUBTENANT, such amount collected from SUBTENANT shall be discounted to presentvalue using an interest rate of six percent (6%) per annum. Additional Rentwhich has not been included, in whole or in part, in accelerated rent, shall bedue and payable by SUBTENANT during the remainder of the Term, in the amountsand at the times otherwise provided for in this Sublease.

 

Notwithstandingthe foregoing or the application of any rule of law based on election ofremedies or otherwise, if SUBTENANT fails to pay the accelerated rent in fullwhen due, SUBLANDLORD thereafter shall have the right by notice to SUBTENANT,(i) to terminate SUBTENANT’s further right to possession of the Leased Premisesand (ii) to terminate this Sublease under subparagraph (b) below; and ifSUBTENANT shall have paid part but not all of the accelerated rent, the portionthereof attributable to the period equivalent to the part of the Term remainingafter SUBLANDLORD’s termination of possession or termination of this Subleaseshall be applied by SUBLANDLORD against SUBTENANT’s obligations owing toSUBLANDLORD, as determined by the applicable provisions of subparagraphs (c) and(d) below.

 

21

----

 

(ii)           Termination of Sublease.By notice to SUBTENANT, SUBLANDLORD shall have the right to terminate thisSublease as of a date specified in the notice of termination and in such case,SUBTENANT’s rights, including any based on any option to renew, to the possessionand use of the Leased Premises shall end absolutely as of the termination date;and this Sublease shall also terminate in all respects except for theprovisions hereof regarding SUBLANDLORD’s damages and SUBTENANT’s liabilitiesarising prior to, out of and following the Event of Default and the ensuingtermination.

 

Followingsuch termination and the notice of same provided above (as well as upon anyother termination of this Sublease by expiration of the Term or otherwise)SUBLANDLORD immediately shall have the right to recover possession of theLeased Premises; and to that end, SUBLANDLORD may enter the Leased Premises andtake possession, without the necessity of giving SUBTENANT any notice to quitor any other further notice, with or without legal process or proceedings, andin so doing SUBLANDLORD may remove SUBTENANT’s property (including anyimprovements or additions to the Leased Premises which SUBTENANT made, unlessmade with SUBLANDLORD’s consent which expressly permitted SUBTENANT to notremove the same upon expiration of the Term), as well as the property of othersas may be in the Leased Premises, and make disposition thereof in such manneras SUBLANDLORD may deem to be commercially reasonable and necessary under thecircumstances.

 

#### (c)           Subtenant’s Continuing Obligations/Sublandlord’s RelettingRights.

####  

(i)            Unlessand until SUBLANDLORD shall have terminated this Sublease under subparagraph(b) above, SUBTENANT shall remain fully liable and responsible to perform allof the covenants and to observe all the conditions of this Sublease 

 

22

----

 

throughout theremainder of the Term to the early termination date; and, in addition,SUBTENANT shall pay to SUBLANDLORD, upon demand and as Additional Rent, thetotal sum of all damages in (d) below, as SUBLANDLORD incurs, because of anyEvent of Default having occurred.

 

(ii)           IfSUBLANDLORD either terminates SUBTENANT’s right to possession withoutterminating this Sublease or terminates this Sublease and SUBTENANT’s leaseholdestate as above provided, then, subject to the provisions below, SUBLANDLORDshall have the unrestricted right to relet the Leased Premises or any part(s)thereof to such tenant(s) on such provisions and for such period(s) as SUBLANDLORDmay deem appropriate. If SUBLANDLORD relets the Leased Premises after such adefault, the costs recovered from SUBTENANT shall be reallocated to take intoconsideration any additional rent which SUBLANDLORD receives from the newtenant which is in excess to that which was owed by SUBTENANT.

 

#### (d)           Sublandlord’s Damages.

####  

(i)            Uponthe occurrence of an Event of Default, the damages which SUBLANDLORD shall beentitled to recover from SUBTENANT shall be the sum of:

 

(A)          allAnnual Rent and Additional Rent accrued and unpaid as of the termination date;and

 

(B)           (1)  all costs andexpenses incurred by SUBLANDLORD in recovering possession of the LeasedPremises, including removal and storage of SUBTENANT’s property, (2) the costsand expenses of restoring the Leased Premises to the condition in which thesame were to have been surrendered by SUBTENANT as of the expiration of theTerm, and (3) the costs of reletting commissions; and

 

23

----

 

(C)           allAnnual Rent and Additional Rent (to the extent that the amount(s) of AdditionalRent has been then determined) otherwise payable by SUBTENANT over theremainder of the Term as reduced to present value.

 

Less deductingfrom the total determined under subparagraphs (A), (B) and (C) all Annual Rentand all other Additional Rent to the extent determinable as aforesaid, (to theextent that like charges would have been payable by SUBTENANT) whichSUBLANDLORD receives from other tenant(s) by reason of the leasing of theLeased Premises or part during or attributable to any period falling within theotherwise remainder of the Term.

 

(ii)           Thedamage sums payable by SUBTENANT under the preceding provisions of thisparagraph (d) shall be payable on demand from time to time as the amounts aredetermined; and if from SUBLANDLORD’s subsequent receipt of rent as aforesaidfrom reletting, there be any excess payment(s) by SUBTENANT by reason of thecrediting of such rent thereafter received, the excess payment(s) shall berefunded by SUBLANDLORD to SUBTENANT, without interest.

 

(iii)          SUBLANDLORDmay enforce and protect the rights of SUBLANDLORD hereunder by a suit or suitsin equity or at law for the specific performance of any covenant or agreementcontained herein, and for the enforcement of any other appropriate legal orequitable remedy, including, without limitation, injunctive relief, and forrecovery of all moneys due or to become due from SUBTENANT under any of theprovisions of this Sublease.

 

#### (e)           Sublandlord’sRight to Cure. Without limiting the generality of the foregoing, ifSUBTENANT shall be in default in the performance of any of its obligationshereunder, SUBLANDLORD, without being required to give SUBTENANT any notice oropportunity to cure, may (but shall not be obligated to do so), in addition toany other rights it 

 

24

----

 

#### may have in law or inequity, cure such default on behalf of SUBTENANT, and SUBTENANT shall reimburseSUBLANDLORD upon demand for any sums paid or costs incurred by SUBLANDLORD incuring such default, including reasonable attorneys’ fees and other legalexpenses, together with interest at 10% per annum Rate from the dates ofSUBLANDLORD’s incurring of costs or expenses.

####  

SUBTENANTfurther waives the right to any notices to quit as may be specified in theSUBLANDLORD and SUBTENANT Act of Pennsylvania, Act of April 6, 1951, asamended, or any similar or successor provision of law, and agrees that five (5)days notice shall be sufficient in any case where a longer period may bestatutorily specified.

 

(i)            AdditionalRemedies. In addition to, and not in lieu of any of the foregoing rightsgranted to SUBLANDLORD:**WHEN THIS SUBLEASE ORTENANT’S RIGHT OF POSSESSION SHALL BE TERMINATED BY COVENANT OR CONDITIONBROKEN, OR FOR ANY OTHER REASON, EITHER DURING THE TERM OF THIS SUBLEASE OR ANYRENEWAL OR EXTENSION THEREOF, AND ALSO WHEN AND AS SOON AS THE TERM HEREBYCREATED OR ANY EXTENSION THEREOF SHALL HAVE EXPIRED, IT SHALL BE LAWFUL FOR ANYATTORNEY AS ATTORNEY FOR TENANT TO FILE AN AGREEMENT FOR ENTERING IN ANYCOMPETENT COURT AN ACTION TO CONFESS JUDGMENT IN EJECTMENT AGAINST TENANT ANDALL PERSONS CLAIMING UNDER SUBTENANT, WHEREUPON, IF SUBLANDLORD SO DESIRES, AWRIT OF EXECUTION OR OF POSSESSION MAY ISSUE FORTHWITH, WITHOUT ANY PRIOR WRITOF PROCEEDINGS, WHATSOEVER, AND PROVIDED THAT IF FOR ANY REASON AFTER SUCHACTION SHALL HAVE BEEN COMMENCED THE**

 

25

----

 

**SAMESHALL BE DETERMINED AND THE POSSESSION OF THE PREMISES HEREBY DEMISED REMAIN INOR BE RESTORED TO SUBTENANT, SUBLANDLORD SHALL HAVE THE RIGHT UPON ANYSUBSEQUENT DEFAULT OR DEFAULTS, OR UPON THE TERMINATION OF THIS SUBLEASE ASHEREINBEFORE SET FORTH, TO BRING ONE OR MORE ACTION OR ACTIONS AS HEREINBEFORESET FORTH TO RECOVER POSSESSION OF THE SAID PREMISES.**

 

In anyaction to confess judgment in ejectment, SUBLANDLORD shall first cause to befiled in such action an affidavit made by it or someone acting for it settingforth the facts necessary to authorize the entry of judgment, of which factssuch affidavit shall be conclusive evidence, and if a true copy of thisSublease (and of the truth of the copy such affidavit shall be sufficientevidence) be filed in such action, it shall not be necessary to file theoriginal as a warrant of attorney, any rule of Court, custom or practice to thecontrary notwithstanding.

 

**                    (INITIAL).SUBTENANT WAIVER. SUBTENANT SPECIFICALLY ACKNOWLEDGES THAT SUBTENANT HASVOLUNTARILY, KNOWINGLY AND INTELLIGENTLY WAIVED CERTAIN DUE PROCESS RIGHTS TO APREJUDGMENT HEARING BY AGREEING TO THE TERMS OF THE FOREGOING PARAGRAPHSREGARDING CONFESSION OF JUDGMENT IN EJECTION. SUBTENANT FURTHER SPECIFICALLYAGREES THAT IN THE EVENT OF DEFAULT, SUBLANDLORD MAY PURSUE MULTIPLE REMEDIESINCLUDING OBTAINING POSSESSION PURSUANT TO A JUDGMENT BY CONFESSION OF EJECTIONAND ALSO OBTAINING A MONEY JUDGMENT FOR PAST DUE AND**

 

26

----

 

**ACCELERATEDAMOUNTS AND EXECUTING UPON SUCH JUDGMENT. SUBTENANT SPECIFICALLY WAIVES ANYCLAIM AGAINST SUBLANDLORD AND SUBLANDLORD’S COUNSEL FOR VIOLATION OFSUBTENANT’S CONSTITUTIONAL RIGHTS IN THE EVENT THAT EJECTION IS CONFESSEDPURSUANT TO THIS SUBLEASE.**

 

#### (f)            Interest on Damage Amounts.Any sums payable by SUBTENANT hereunder, which are not paid after the sameshall be due, shall bear interest from that day until paid at the rate of four(4%) percent over the then Prime Rate as published daily under the heading“Money Rates” in The Wall Street Journal, unless such rate be usurious asapplied to SUBTENANT, in which case the highest permitted legal rate shallapply (the “Default Rate”).

####  

#### (g)           SUBLANDLORD’s Statutory Rights.SUBLANDLORD shall have all rights and remedies now or hereafter existing at lawor in equity with respect to the enforcement of SUBTENANT’s obligationshereunder and the recovery of the Leased Premises. No right or remedy hereinconferred upon or reserved to SUBLANDLORD shall be exclusive of any other rightor remedy, but shall be cumulative and in addition to all other rights andremedies given hereunder or now or hereafter existing at law. SUBLANDLORD shallbe entitled to injunctive relief in case of the violation, or attempted orthreatened violation, of any covenant, agreement, condition or provision ofthis Sublease, or to a decree compelling performance of any covenant,agreement, condition or provision of this Sublease.

####  

#### (h)           Remedies Not Limited.Nothing herein contained shall limit or prejudice the right of SUBLANDLORD toexercise any or all rights and remedies available to SUBLANDLORD by reason ofdefault or to prove for and obtain in proceedings under any 

 

27

----

 

#### bankruptcy or insolvencylaws, an amount equal to the maximum allowed by any law in effect at the time when,and governing the proceedings in which, the damages are to be proved, whetheror not the amount be greater, equal to, or less than the amount of the loss ordamage referred to above.

####  

#### (i)            No Waiver by SUBLANDLORD.No delay or forbearance by SUBLANDLORD in exercising any right or remedyhereunder, or SUBLANDLORD’s undertaking or performing any act or matter whichis not expressly required to be undertaken by SUBLANDLORD shall be construed,respectively, to be a waiver of SUBLANDLORD’s rights or to represent anyagreement by SUBLANDLORD to undertake or perform such act or matter thereafter.Waiver by SUBLANDLORD of any breach by SUBTENANT of any covenant or conditionherein contained (which waiver shall be effective only if so expressed inwriting by SUBLANDLORD) or failure by SUBLANDLORD to exercise any right orremedy in respect of any such breach shall not constitute a waiver orrelinquishment for the future of SUBLANDLORD’s right to have any such covenantor condition duly performed or observed by SUBTENANT, or of SUBLANDLORD’srights arising because of any subsequent breach of any such covenant orcondition nor bar any right or remedy of SUBLANDLORD in respect of such breachor any subsequent breach. SUBLANDLORD’s receipt and acceptance of any payment fromSUBTENANT which is tendered not in conformity with the provisions of thisSublease or following an Event of Default (regardless of any endorsement ornotation on any check or any statement in any letter accompanying any payment)shall not operate as an accord and satisfaction or a waiver of the right ofSUBLANDLORD to recover any payments then owing by SUBTENANT which are not paidin full, or act as a bar to the termination of this Sublease and the recoveryof the Leased Premises because of SUBTENANT’s previous default.

 

28

----

 

### 14.           INSURANCE.

###  

#### (a)           SUBTENANTshall at its expense obtain and maintain, or cause to be obtained andmaintained, insurance during the term of this Sublease. Comprehensive orCommercial General Liability Insurance with bodily injury and property damagecombined single limits of at least Ten Million Dollars ($10,000,000) peroccurrence, with a deductible of not more than One Hundred Thousand Dollars($100,000). Such insurance shall include, but not necessarily be limited to,specific coverage for contractual liability encompassing the indemnificationprovisions in Paragraph 12, broad form property damage liability, personalinjury liability, explosion and collapse hazard coverage, and products/completedoperations liability.

####  

#### (b)           Theamounts of insurance required in this Paragraph 14 may be satisfied bySUBTENANT purchasing primary coverage in the amounts specified or by buying aseparate excess Umbrella Liability policy together with lower limit primaryunderlying coverage. The structure of the coverage is SUBTENANT’s option, solong as the total amount of insurance meets the requirements of this Paragraph14. The coverages described above and any Umbrella or Excess coverage should be“occurrence” form policies. The insurance requirements listed above are minimumrequirements. SUBLANDLORD and SUBTENANT shall annually renegotiate theseminimum insurance requirements to reflect increases in insured values whereapplicable. Further, neither failure to comply nor full compliance by eitherparty with the insurance provisions of this Agreement shall limit or relieveSUBTENANT OR SUBLANDLORD from indemnifying and holding harmless SUBLANDLORD ORSUBTENANT, as the case may be, in compliance with the provisions of thisAgreement.

 

29

----

 

#### (c)           SUBLANDLORDshall at its expense obtain and maintain, or cause to be obtained andmaintained, insurance covering its interests during the term of this Sublease.

####  

#### (d)           UponSUBLANDLORD’s request, certificates of insurance evidencing the coveragesrequired above of SUBTENANT shall be filed with SUBLANDLORD. Such certificatesshall provide that the insurer will give SUBLANDLORD thirty (30) days advancenotice of any changes in or cancellation of coverage. SUBTENANT shall nameSUBLANDLORD as an additional insured under all policies of insurance relatingto the Leased Premises

####  

Neither failure ofSUBTENANT or SUBLANDLORD to comply with any or all of the insurance provisionsof the Agreement, nor the failure to secure endorsements on the policies as maybe necessary to carry out the terms and provisions of the Agreement, shall beconstrued to limit or relieve SUBTENANT or SUBLANDLORD from any of itsobligations under the Agreement, including the Insurance Article.

 

### 15.           WAIVEROF SUBROGATION. Each party hereto, and anyone claiming through or underthem by way of subrogation, waives and releases any cause of action it mighthave against the other party and their respective employees, officers, members,shareholders, partners, trustees and agents, on account of any loss or damagethat is insured against under any insurance policy required to be obtainedhereunder (to the extent that such loss or damage is recoverable under suchinsurance policy) that covers the Leased Premises, SUBLANDLORD’s or SUBTENANT’sfixtures, personal property, leasehold improvements or business and which namesSUBLANDLORD or SUBTENANT, as the case may be, as a party insured. Each partyhereto agrees that it will cause its insurance carrier to endorse allapplicable policies waiving the 

 

30

----

 

### carrier’s right ofrecovery under subrogation or otherwise against the other party. During anyperiod while such waiver of right of recovery is in effect, each party shalllook solely to the proceeds of such policies for compensation for loss, to theextent such proceeds are paid under such policies.

###  

### 16.           CASUALTY.If, during the term of this Sublease, the Leased Premises, including the BlueStone Mine, shall be destroyed, or so injured or damaged by fire, the elements,acts of God, or other insurable casualty, structural defects or from any othercause so as to be unfit for occupancy and not be economically feasible for theoperation of the Explosion Business, this Sublease shall, at SUBTENANT’soption, terminate and SUBTENANT shall not be liable to pay rent after suchoccurrence. If the injury or damage is such that SUBTENANT notifies SUBLANDLORDas soon as reasonably possible (but in no event more than ninety (90) daysafter such injury) that the SUBTENANT is diligently pursuing plans forrestoration of the Leased Premises and within ninety (90) working days from thedelivery of such notice, either restores the Leased Premises, or, if suchrestoration cannot be completed in ninety (90) working days, commences anddiligently pursues such restoration, this Sublease shall not be terminated butthe rent shall be suspended as to that portion of the Leased Premises rendereduntenantable or unsuitable for the operation of SUBTENANT’s business and insuch case any rent paid in advance but unearned shall be refunded to SUBTENANT.If SUBTENANT does not notify SUBLANDLORD within the time hereinabove specifiedor if as soon as possible (but in no event longer than ninety (90) working daysafter the date of the injury), SUBTENANT (a) is not diligently pursuing thenecessary repairs, or (b) the Parties agree that the repairs cannot becompleted within one hundred eighty (180) days following the date of suchnotice, then this 

 

31

----

 

### Sublease may immediatelybe terminated by SUBLANDLORD and neither party shall have any furtherobligations hereunder, except those specifically intended to survive termination.

###  

### 17.           QUIETENJOYMENT. SUBLANDLORD covenants and warrants that, as long as no Event ofDefault shall have occurred and be continuing under this Sublease, SUBLANDLORDor persons claiming by, through or under SUBLANDLORD will take no action orneglect to take any action which interferes with the peaceful and quietenjoyment and possession of the Leased Premises by SUBTENANT for the termhereof and any extensions to the term.

###  

### 18.           ASSIGNMENTAND SUBLETTING.

###  

#### (a)           SUBTENANTshall have the right to assign its rights and duties under this Sublease,either as collateral security or to an affiliate of SUBTENANT created inconnection with the financing arrangements entered into by SUBTENANT orotherwise, by notifying SUBLANDLORD of such assignment. In the event of anysuch assignment, SUBTENANT shall continue to remain primarily liable forperformance hereunder for the term of this Sublease, including any renewals.“Affiliate” means an entity controlled by or under the control of SUBTENANT orSUBTENANT’s parent, SNPE, Inc. “Control” or “Controlled” means ownership ofmore than 50% of the ownership interests of such entity or the ability to electa majority of the board or other governing body of such entity.

####  

#### (b)           Exceptas provided in this Sublease, neither party may assign this Sublease in wholeor in part, or any rights granted hereunder, without the prior written consentof the other party, which consent shall not be unreasonably withheld so long asno Event of Default shall have occurred and then be continuing. Except asprovided in this Sublease, any transfer, assignment, delegation or attemptedtransfer, assignment or delegation under this Sublease or of 

 

32

----

 

#### any of such rights orduties herein granted or imposed whether voluntary, by operation of law orotherwise, without consent in writing, shall cause this Sublease to beterminated at the election of the party whose written consent has not beenobtained. SUBTENANT shall not, without the prior written consent of SUBLANDLORD,sublet any portion of the Leased Premises. Subject to the foregoing, thisSublease shall be binding upon and shall inure to the benefit of the partiesand their successors and assigns.

####  

Notwithstandinganything to the contrary contained herein, SUBLANDLORD may assign this Subleaseto the purchaser of all or substantially all of SUBLANDLORD’s Business.

 

### 19.           GOVERNINGLAW. This Sublease and the performance thereof shall be governed,interpreted, construed and regulated by the laws of the Commonwealth ofPennsylvania.

###  

### 20.           CONSENTTO JURISDICTION. SUBTENANT hereby consents to the exclusive jurisdiction ofthe state and federal courts located in any county in the Commonwealth ofPennsylvania to resolve any dispute arising under this Sublease or in connectionwith SUBTENANT’s use, occupancy or enjoyment of the Leased Premises.

###  

### 21.           SURRENDER.SUBTENANT hereby agrees to surrender the Leased Premises in good condition andrepair, normal wear and tear excepted. Notwithstanding anything herein to thecontrary (except if required by law), SUBTENANT shall be required to haveperformed a Phase 1 environmental audit upon the termination or expiration ofthis Sublease at its sole expense. SUBTENANT shall have no right to hold overbeyond the expiration of the Term and in the event SUBTENANT shall fail todeliver possession of the Leased Premises as herein provided, such occupancyshall not be construed to effect or constitute 

 

33

----

 

### other than a tenancy atsufferance. During any period of occupancy beyond the expiration of the Termthe amount of rent owed to SUBLANDLORD by SUBTENANT shall automatically becomeone hundred fifty percent (150%) the Annual Rent as those sums are at that timecalculated under the provisions of the Sublease. If SUBTENANT fails tosurrender the space within thirty (30) days of the termination date,SUBLANDLORD may elect to automatically extend the Term for an additional monthor additional year, at SUBLANDLORD’s option, with an Annual Rent of one hundredand fifty percent (150%) the sum of the Annual Rent as those sums are at thattime calculated under the provisions of the Sublease. The acceptance of rent bySUBLANDLORD or the failure or delay of SUBLANDLORD in notifying or evictingSUBTENANT following the expiration or sooner termination of the Term shall notcreate any tenancy rights in SUBTENANT and any such payments by SUBTENANT maybe applied by SUBLANDLORD against its costs and expenses, including attorney’sfees incurred by SUBLANDLORD as a result of such holdover. The provisions ofthis Paragraph shall survive the expiration or sooner termination of thisSublease.

###  

### 22.           AMENDMENTAND RECORDATION. This Sublease may not be amended, supplemented, ormodified, except by an instrument in writing, signed by SUBLANDLORD andSUBTENANT. This Sublease may not be recorded by either party provided thateither party may record a memorandum of lease of this Sublease.

###  

### 23.           WAIVER.Failure of SUBLANDLORD or SUBTENANT to complain of any act or omission on thepart of the other party, no matter how long the same may continue, shall not bedeemed to be a waiver by said party of any of its rights hereunder. No waiverby SUBLANDLORD or SUBTENANT at any time, express or implied, of any breach ofany 

 

34

----

 

### provision of thisSublease shall be deemed a waiver of a breach of any other provision of thisSublease or a consent to any subsequent breach of the same or any otherprovision.

###  

### 24.           BROKER.Each party hereby represents and warrants to the other party that it has notdealt with any real estate broker or finder in connection with the transactionevidenced by this Sublease, and said party agrees to indemnify, defend and holdharmless the other party from and against any threatened or asserted claims,liabilities, losses or judgments (including reasonable attorneys’ fees anddisbursements) by any such broker or finder claiming to have dealt with theindemnifying party. This provision shall survive the termination or expirationof this Sublease.

###  

### 25.           NOTICES.Every notice, approval, consent or other communication required or permittedunder this Sublease shall be in writing, shall be deemed to have been dulygiven three days after mailing by US Mail and or next day if by nationallyknown overnight carrier for priority next day delivery, and shall be valid onlyif either served personally on the party to whom notice is to be given, ormailed to the party to whom notice is to be given, by first class registered orcertified mail, return receipt requested, or by nationally recognized overnightcarrier for next day priority delivery, in each case postage prepaid, andaddressed to the addressee at the address stated opposite its name below, or atthe most recent address specified by written notice given to the other party inthe manner provided in this Paragraph.

###  

To SUBLANDLORD

Mypodiamond, Inc.

200 North Repauno Ave.

Gibbstown, NJ  08027

 

35

----

 

with a copy to:

 

Richard P. Eckman

Pepper Hamilton LLP

1201 Market Street

Suite 1600

Wilmington, DE 19801

 

To SUBTENANT

 

Dynamic MaterialsCorporation

551 Aspen Ridge Drive

Lafayette, CO  80026

Attn:  Chief Executive Officer

 

### 26.           PARTIALINVALIDITY. If any term, covenant, condition or provision of this Subleaseor the application thereof to any person or circumstance shall, at any time orto any extent, be invalid or unenforceable, the remainder of this Sublease, orthe application of such term or provision to persons or circumstances other thanthose as to which it is held invalid or unenforceable, shall not be affectedthereby, and each term, covenant, condition and provision of this Subleaseshall be valid and be enforced to the fullest extent permitted by law. Anyprovision of this Sublease which is invalid or unenforceable in anyjurisdiction shall, as to such jurisdiction, be ineffective to the extent towhich it is held invalid or unenforceable, but any such invalidity orunenforceability shall not invalidate or render unenforceable such provision inany other jurisdiction.

###  

### 27.           NOPARTNERSHIP. Nothing in this Sublease or the transaction for which it iswritten shall constitute or create a joint venture, partnership, agency or anyother similar arrangement between SUBLANDLORD and SUBTENANT, and neither partyis authorized to act as agent for the other party.

###  

### 28.           CAPTIONS.Titles or captions of Paragraphs contained in this Sublease are inserted onlyas a matter of convenience and for reference, and in no way define, limit, 

 

36

----

 

### extend, describe orotherwise affect the scope or meaning of this Sublease or the intent of anyprovision hereof. All Exhibits attached hereto shall be considered a parthereof as though fully set forth herein.

###  

### 29.           COUNTERPARTS.The parties may execute this Sublease in two (2) or more counterparts, whichshall, in the aggregate, be signed by both the parties; and each counterpartshall be deemed an original instrument as against any party who has signed it.

###  

### 30.           SUCCESSION.All of the covenants, agreements, conditions and undertakings of this Subleaseshall extend and inure to and be binding upon the successors and permittedassigns of the respective parties hereto.

###  

### 31.           WAIVEROF JURY TRIAL. EACH PARTY KNOWINGLY WAIVES THEIR RIGHT TO A JURY TRIAL.

###  

### 32.           THIRDPARTY BENEFICIARIES. There are no third party beneficiaries to thisSublease.

###  

### 33.           TIMEOF THE ESSENCE. Time is of the essence under this Sublease.

 

37

----

 

IN WITNESS WHEREOF,the parties hereunto have caused this Agreement to be executed on the day andyear first above written.

 
|   | MYPODIAMOND,  INC. |
|--------|--------------------|
|   |               |
|   | By:                |   |   |
|   |               |   |
|   | Print  Name:       |   |   |
|   |               |   |
|   | Title:             |   |   |
|   |               |   |   |
|   | Date:              |   |   |
|        |                    |  |  |  |  |

 

 
|   | DYNAMIC  MATERIALS CORPORATION |
|--------|--------------------------------|
|   |                           |
|   | By:                            |   |   |
|   |                           |   |
|   | Print  Name:                   |   |   |
|   |                           |   |
|   | Title:                         |   |   |
|   |                           |   |   |
|   | Date:                          |   |   |
|        |                                |  |  |  |  |

 

38

----