**Exhibit 10.3**

** **

**OPTION PURCHASEAGREEMENT**

** **

**THIS OPTION PURCHASE AGREEMENT**(“**Agreement**”), isdated as of November 4, 2005, and is entered into by and between **DYNAMIC MATERIALS CORPORATION**, a Delaware corporation (“**DMC**”), and **SPIN FORGE, LLC**,a California limited liability company (“**Owner**”), withregard to the following:

 

A.                                   The Owner owns certain real property (the“**Land**”) located in Los Angeles County,California, commonly known as 1700 East Grand Avenue, which is moreparticularly described on **Exhibit A**attached to this Agreement and incorporated herein by this reference.  The Land, together with all appurtenanteasements and other appurtenances thereto, as well as all buildings,structures, and other improvements located thereon and all fixtures attachedthereto, are referred to collectively as the “**Property**.”

 

B.                                     The Owner and DMC entered into a certainOperating Lease dated as of March 18, 1998 and amended that OperatingLease by a certain Agreement and Amendment to Operating Lease dated as of February 1,2000 (as amended, the “**Lease**”).

 

C.                                     Also as of March 18, 1998, DMC andthe Owner entered into an Option Agreement dated as of March 18, 1998giving DMC an option (the “**Option**”) topurchase the Property from the Owner, which Option Agreement has previously beenamended five times (as amended, the “**Option Agreement**”).

 

D.                                    DMC subleased the Property toAerojet-General Corporation (“**Aerojet**”)pursuant to that certain written Sublease between DMC and Aerojet dated September 17,2004 (the “**Sublease**”), a copy of which isattached to this Agreement as **Exhibit B**.DMC also assigned its rights in the Option to Aerojet pursuant to that certainwritten Option Agreement between DMC and Aerojet dated September 17, 2004(the “**Option Assignment**”).  By the terms of the Option Assignment,Aerojet’s rights in the Option terminated on August 1, 2005.

 

E.                                      DMC has approached the Owner aboutfurther amending the Option Agreement to facilitate DMC’s possible sale of theProperty to a third party after it exercises the Option. The Owner has,instead, proposed to DMC that it repurchase the Option.  The parties have reached agreement on such aresale of the entire Option to the Owner on the terms and conditions set forthin this Agreement so that, upon such resale, DMC will have no further rights inthe Option or the Option Agreement.

 

F. All capitalized terms used not defined herein orthe Glossary of Terms attached hereto shall have the meanings ascribed to thoseterms in the Option Agreement.

 

**NOW THEREFORE**, for valuable consideration, the receipt andsufficiency of which is hereby acknowledged, the parties agree as follows:

 

1.                                       **Purchase of Option**.****DMC herebyagrees to sell to the Owner and the Owner hereby agrees to buy from DMC theentire Option and the Option Agreement, free and clear of

 

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any lien, claim, right of third party orother encumbrance, for the Purchase Price and on the other terms herein setforth.

 

2.                                       **Purchase Price. **ThePurchase Price (“**Purchase Price**”) for the Optionand Option Agreement shall be Two Million Three Hundred Thousand and No/100Dollars ($2,300,000.00).

 

3.                                       **Payment of Purchase Price. **ThePurchase Price shall be paid to DMC as follows:

 

(a)                                  **Deposit**.  On the dateof this Agreement (the “**Effective Date**”),the Owner shall pay to DMC outside of Escrow cash in the amount of One HundredThousand Dollars ($100,000.00) (the “**Non-Refundable Deposit**”).At the Close of Escrow (as defined below), the amount of the Non-RefundableDeposit shall be credited towards payment of the Purchase Price.  If the Escrow does not close, theNon-Refundable Deposit shall be applied as set forth in this Agreement.

 

(b)                                 **Cash Balance.** Nolater than two (2) business days prior to the Scheduled Close of Escrow(as defined below), the Owner shall deposit into Escrow the balance of the PurchasePrice in cash, plus such other funds as may be required for the Owner tosatisfy all prorations and other costs payable by it pursuant to the terms ofthis Agreement.  DMC shall provide wiringinstructions (“**Wiring Instructions**”) to theEscrow Holder prior to the Scheduled Close of Escrow for the payment of thePurchase Price to DMC.

 

4.                                       **Escrow and Deliveries Into Escrow**.  DMC and the Owner shall cause the Opening ofEscrow (as defined below) to occur on the Effective Date by taking the actionsrequired of them in this Section 4.

 

(a)  Owner agrees to deliver into theEscrow within three (3) business days of the date hereof each of thefollowing:

 

(i)                                     afully executed counterpart of this Agreement, duly executed by Owner;

 

(ii)                                  twofully executed counterparts of an agreement in the form of the Amended andRestated Option Agreement attached hereto as **Exhibit C**(the “**Amended and Restated Option Agreement**”),duly executed by Owner;

 

(iii)                               two fully executedcounterparts of an assignment of the Sublease (the “**SubleaseAssignment”**) in the form of **Exhibit D**attachedhereto, duly executed by Owner; and

 

(iv)                              theamount of any cash prorations computed in accordance with Paragraph 10 andwhich are payable by Owner.

 

(v)                                 The Owner also agreesto pay the remaining amount of the Purchase Price into Escrow no later than two(2) days prior to the Scheduled Close of Escrow.

 

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(b) DMC agrees to deliver into theEscrow within three business days after the date hereof each of the following:

 

(i)                                     afully executed counterpart of this Agreement, duly executed by DMC;

 

(ii)                                  twofully executed counterparts of the Amended and Restated Option Agreement, dulyexecuted by DMC;

 

(iii)                               twofully executed counterparts of the Sublease Assignment, duly executed by DMC;

 

(iv)                              a fully executedquitclaim deed in the form of **Exhibit E**to this Agreement, duly executed by Aerojet and in recordable form (the “**Aerojet Deed**”); and

 

(v)                                 afully executed quitclaim deed in the form of **Exhibit F**to this Agreement, duly executed by DMC and in recordable form (the “**DMC Deed**”).

 

(c)                                  Within five (5) daysafter the Opening of Escrow, the Escrow holder shall deliver a letter to theparties confirming the date of the Opening of Escrow.

 

5.                                       **Conditions to the Close of Escrow.**

 

(a)                                  [Intentionally deleted.]

 

(b)                                 **ConditionsPrecedent to DMC’s Obligations.** The Close of Escrow and DMC’s obligations withrespect to the transaction contemplated by this Agreement are subject to:

 

(i)                                     **Owner’s Deliveries. **TheOwner having delivered the funds and documents it is required by this Agreementto deliver into the Escrow.

 

(ii)                                  **Breach ofWarranty. **Each representationand warranty of the Owner herein shall be true and correct as of the Close ofEscrow.  Escrow Holder shall assume thatthis condition has been satisfied unless notified to the contrary in writing byDMC prior to the Close of Escrow.

 

(c)                                  **Failure ofClose of Escrow.**  If theEscrow fails to close for a reason other than DMC’s default under thisAgreement, (i) this Agreement and the Escrow shall terminate, (ii) theNon-Refundable Deposit shall be retained by DMC as liquidated damages inaccordance with the provisions of Paragraph 13 (b) of this Agreement and (iii) theOption Agreement as amended by the Amended and Restated Option Agreement shallbecome effective as of 12:00 a.m. February 1, 2006 (the “**Restated Option Agreement Effective Date**”).  Unless and until the Amended and RestatedOption Agreement becomes effective pursuant to the terms of this paragraph, theOption Agreement shall remain in full force and effect in its present form.

 

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(d)                                 **Instructionsto Escrow Holder.**  If thisAgreement and the Escrow terminate pursuant to the immediately precedingparagraph, Escrow Holder is hereby instructed to promptly (i) deliver afully executed original of each of the Amended and Restated Option Agreement toDMC and the Owner, (ii) deliver all copies of the Sublease Assignment toDMC and (iii)  deliver to Owner and DMC all other funds and documentsdeposited by them, respectively, into Escrow which are held by Escrow Holder onthe date of said termination, less, in the case of the party otherwise entitledto such funds, however, the amount of any cancellation charges required to bepaid by such party under Paragraph 5(e).

 

(e)                                  **CancellationFees and Expenses.**  In theevent this Escrow terminates because of the default of either party, thedefaulting party shall pay all cancellation charges required to be paid by andto Escrow Holder.  In all other cases,all such cancellation charges shall be borne equally by the Owner and DMC.

 

(f)                                    **Close of Escrow.** TheClose of Escrow shall occur on January 31, 2006, or such earlier dateagreed to by the parties (as applicable, the “**ScheduledClose of Escrow**”).

 

6.                                       [Intentionallydeleted.]

 

7.                                       **Costs and Expenses.**

 

(a)                                  **DMC’sObligations.**  DMC shall pay:

 

(i)                                     **Transfer Tax.** Documentary transfer tax chargeable on the Aerojet Deed and the DMCDeed, if any.

 

(i)                                     **Escrow Fees.** One-half (2) of all escrow fees and costs.

 

(ii)                                  **Prorations.**  DMC’s share of prorations,if any.

 

(b)                                 **Owner’sObligations.** The Owner shallpay (in addition to the Purchase Price):

 

(i)                                     **Escrow Fees.** One-half (2) of all escrow fees and costs.

 

(ii)                                  **Prorations.**  The Owner’s share ofprorations, if any.

 

(c)                                  **ProfessionalFees, Etc.**  The Owner and DMCshall each pay the legal and professional fees and fees of other consultantsincurred by each of them respectively in connection with the transactionsherein contemplated.

 

8.                                       **Prorations. **Theparties recognize that Aerojet is required to pay most expenses related to theoperation of the Property and that there will be few, if any, expenses that areto be prorated in connection with the sale of the Option. Nevertheless, theparties agree that any revenues and other income from the Property, realproperty taxes and operating expenses, if any, affecting the Property and notpaid directly by Aerojet pursuant to the provisions of the Sublease shall beprorated as of 11:59 p.m. on the day preceding the Close of Escrow. Allbonds or special

 

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assessments, if any, due after the Close of Escrow, which relate to theProperty and relate to events occurring prior to the Close of Escrow, shall beprorated as of the Close of Escrow.  Anysupplementary tax bills received by the Owner following the Close of Escrow andnot payable by Aerojet pursuant to the provisions of the Sublease relating to aperiod prior to the Close of Escrow shall be prorated by the parties as if saidtax bills had been available at the Close of Escrow. All real property taxesand other prorations with respect to the Property shall be calculated as of11:59 p.m. on the day preceding the Close of Escrow. For purposes ofcalculating prorations, the Owner shall be deemed to be in title to theProperty, and therefore entitled to the income, if any, and responsible for theexpenses, for the entire day upon which the Close of Escrow occurs.

 

9.                                       **Disbursements and Other Actions by Escrow Holder.**  On the date of the ScheduledClose of Escrow or such earlier time as the parties elect to close escrow,provided that each party has satisfied each of its obligations required by thisAgreement to occur prior to the date of the Scheduled Close of Escrow, EscrowHolder shall promptly undertake all of the following in the manner indicated:

 

(a)                                  **Funds.**  Except as otherwise herein provided, disburseall funds deposited with Escrow Holder, less items to be charged to DMChereunder, if any, to DMC as provided in DMC’s Wiring Instructions.

 

(b)                                 **Recording.**  Cause to be recorded in the Official Recordsthe Aerojet Deed **first** followed by the DMC Deed,together with such other instruments, if any, that the parties may mutuallydirect to be recorded in the Official Records, and obtain conformed copiesthereof for distribution to the Owner and DMC.

 

(c)                                  **Deliver.**  Deliver (i) to each party (1) afully executed original of this Agreement and (2) a fully executed copy ofthe Sublease Assignment, and (ii) to Owner all originals of the Amendedand Restated Option Agreement (which the parties agree shall then be of noforce or effect, each party agreeing to destroy all executed originals andexecution copies thereof).

 

(d)                                 The Owner expresslyagrees that notwithstanding the recordation of the Aerojet Deed and the Closeof Escrow it shall not disturb Aerojet in its occupancy and quiet enjoyment ofthe Property pursuant to the Sublease so long as Aerojet complies with itsobligations thereunder. The parties agree that Aerojet is intended to be athird party creditor beneficiary of this paragraph.

 

10.**                                **[Intentionallydeleted.]

 

11.                                 **DMC’sRepresentations and Warranties.** In addition to any other express agreements of DMC herein contained, thefollowing constitute representations and warranties of DMC to the Owner, all ofwhich representations and warranties shall survive the sale of the Option fromDMC to Owner and the Close of Escrow. Each of such representations and warranties shall be continuing andshall remain true and correct as of the Close of Escrow with the same force andeffect as if remade by DMC in a separate certificate at that time.

 

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(a)                                  **Authority**.  DMC has the legal power, right and authorityto enter into this Agreement and to execute and deliver this Agreement, toconsummate the transactions contemplated by this Agreement, and to execute anddeliver the other documents, instruments and agreements required to be executedor delivered by DMC under this Agreement without the necessity of any act orconsent of any other person whomsoever.

 

(b)                                 **RequisiteAction**.**** The execution, delivery and performance by DMCof this Agreement and each and every agreement, document and instrumentprovided for in this Agreement have been duly authorized and approved by allcorporate action on the part of DMC.

 

(c)                                  **BindingNature**.  This Agreement andall documents required hereby to be executed by DMC are and shall be valid,legally binding obligations of and enforceable against DMC in accordance withtheir terms, subject, only to applicable bankruptcy, insolvency,reorganization, moratorium laws or similar laws or equitable principlesaffecting or limiting the rights of contracting parties generally.

 

(d)                                 **Contracts**.  There are no oral or written contractsbetween DMC and any other person or entity with respect to the ownership,operation, maintenance, use or occupancy of the Property, other than theSublease and the Option Assignment.  DMChas not assigned or otherwise granted any right or interest in the Option orthe Option Agreement to any person or entity, other than the rights expresslygranted to Aerojet under the Option Assignment. The Sublease has not been modified or amended in any mannerwhatsoever.  The Option Assignment isterminated and of no force or effect.  Neither Aerojet nor any other person or entity has any right toexercise any right under the Option Assignment, and Aerojet has notassigned any of its rights under the Option Assignment to any person orentity.  Upon the Close of Escrow, Ownerwill be the sole owner of the Option and the Option Agreement, free and clearof any lien, claim, right of third party or other encumbrance whatsoever, otherthan any encumbrance placed on the Option or Option Agreement solely by Owner.

 

(e)                                  **TitleMatters**.  Except as expresslydisclosed in the Option Agreement, upon the recordation of the Aerojet Deed andthe DMC Deed in the Official Records, there will be no matters of recordagainst the Property placed there by DMC or caused by the acts or omissions ofDMC or any of its agents or representatives.

 

(f)                                    [Intentionallydeleted.]

 

(g)                                 **Option**.  DMC has not exercised and could not exercisethe Option.

 

(h)                                 **PropertyConditions**.  DMC has notbecome aware of any material adverse conditions affecting the Property causedby any third party.

 

12.                                 **Owner’sRepresentations and Warranties**.         Inaddition to any express agreements of the Owner herein contained, the followingconstitute representations and warranties of the Owner to DMC.  Each of such representations and warrantiesshall be continuing and shall remain true and correct as of the Close of Escrowwith the same force and effect as if remade by Owner in a separate certificateat that time.

 

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(a)                                  **Authority**.  The Owner has the legal power, right andauthority to enter into this Agreement, and the instruments referenced herein,and to consummate the transactions contemplated hereby.

 

(b)                                 **RequisiteAction**.  All requisite actionhas been taken by the Owner in connection with the entering into thisAgreement, and the instruments herein referenced, and the consummation of thetransactions hereby contemplated.

 

(c)                                  **BindingNature**.  This Agreement andall documents required hereby to be executed by the Owner are and shall bevalid, legally binding obligations of and enforceable against the Owner inaccordance with their terms, subject, only to applicable bankruptcy,insolvency, reorganization, moratorium laws or similar laws or equitable principlesaffecting or limiting the rights of contracting parties generally.

 

(d)                                 In addition to anyinformation concerning the Property of which Owner has become aware as a resultof its ownership of the Property, Owner has had the opportunity to inspect theProperty and evaluate the condition of the Property.

 

(e)                                  [Intentionallydeleted.]

 

(f)                                    **No Other Representations**.**** DMC has made no representations or warrantiesto the Owner, oral or written, except as may be specifically set forth in thisAgreement, the Lease Assignment, or the Lease.

 

(g)                                 [Intentionallydeleted.]

 

13.                                 **Legal andEquitable Enforcement of this Agreement; Indemnities.**

 

(a)                                  **Default byDMC.**  In the event the Closeof Escrow and the consummation of the transactions herein contemplated do notoccur by reason of any default by DMC, the Owner shall have the right to pursueany right, claim, damage and remedy available to it at law or in equity.

 

(b)                                 **Default byOwner.**  IN THE EVENT THE CLOSEOF ESCROW AND THE CONSUMMATION OF THE TRANSACTION HEREIN CONTEMPLATED DO NOTOCCUR AS HEREIN PROVIDED ON OR BEFORE THE SCHEDULED CLOSE OF ESCROW AS A RESULTOF A REASON OTHER THAN DMC’S DEFAULT, THE OWNER AND DMC AGREE THAT IT WOULD BEIMPRACTICAL AND EXTREMELY DIFFICULT TO ESTIMATE THE DAMAGES WHICH DMC MAY SUFFER.  THEREFORE THE OWNER AND DMC HEREBY AGREE THATA REASONABLE ESTIMATE OF THE TOTAL NET DETRIMENT THAT DMC WOULD SUFFER IN THEEVENT ESCROW FAILS TO CLOSE FOR ANY REASON OTERH THAN DMC’S DEFAULT IS ANDSHALL BE, AS DMC’S SOLE AND EXCLUSIVE REMEDY (WHETHER AT LAW OR IN EQUITY), (I)AN AMOUNT EQUAL TO THE NON-REFUNDABLE DEPOSIT PLUS ANY INTEREST ACCRUEDTHEREON, AND (II) THE AMENDED AND RESTATED OPTION AGREEMENT BECOMING EFFECTIVEON THE RESTATED OPTION EFFECTIVE DATE. SAID REMEDY SHALL BE DMC’S FULL, AGREEDAND LIQUIDATED

 

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DAMAGES FOR THE FAILURE OF ESCROW TO CLOSE ON OR BEFORE THE SCHEDULEDCLOSE OF ESCROW, ALL OTHER CLAIMS TO DAMAGES OR OTHER REMEDIES BEING HEREINEXPRESSLY WAIVED BY DMC.  THE PAYMENT OFTHE NON-REFUNDABLE DEPOSIT AS LIQUIDATED DAMAGES AND THE EFFECTIVENESS OF THEAMENDED AND RESTATED OPTION AGREEMENT ON THE RESTATED OPTION AGREEMENTEFFECTIVE DATE IS NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OFCALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT IS INTENDED TO CONSTITUTE LIQUIDATEDDAMAGES TO DMC PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671, 1676 and 1677.DMC HEREBY WAIVES THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 3389.

 
|   |                  |   |                |   |
|--------|-----------------------|--------|---------------------|--------|
|   | Owner’s Initials |   | DMC’s Initials |   |

 

(c)                                  **Owner’s Indemnity**.  Ownershall indemnify, defend and hold harmless DMC, and each of DMC’s officers,directors, agents and representatives, and each of their successors andassigns, from and against any and all claims, liabilities, demands, lawsuits,litigation, losses, damages (including consequential damages and penalties),fees, costs and expenses (including settlement costs, and costs and expenses ofcounsel and other professional fees, including those incurred in investigating,bringing or defending any claim or action or threatened claim or action),obligations, liens, executions, fines, awards, indebtedness, defenses andcauses of action, of every and whatever type, kind, nature, description orcharacter (collectively, “**Claims and Liabilities**”),arising out of, connected with or relating to any breach by Owner of any of itsrepresentations and warranties under this Agreement.

 

(d)                                 **DMC’sIndemnity**.  DMC shallindemnify, defend and hold harmless Owner, and each of Owner’s managers,members, agents and representatives, and each of their successors, heirs andassigns, from and against any and all Claims and Liabilities arising out of,connected with or relating to any breach by DMC of any of its representationsand warranties under this Agreement.

 

(e)                                  **Non-ExclusiveRemedy**.  The indemnities setforth in paragraphs (c) and (d) of this Section 13 shall foreverterminate on the first anniversary of the Close of Escrow, other than thoseClaims and Liabilities for which a party has demanded indemnification inwriting from the other party prior to such time, which Claims and Liabilitiesshall survive such termination.  Therights and remedies set forth in paragraphs (c) and (d) of this Section 13shall not be exclusive, but shall be cumulative with any other rights andremedies available.

 

14.                                 **Notices.**  All notices or other communications requiredor permitted hereunder shall be in writing, and shall be personally delivered(including by means of professional messenger service) or sent by registered orcertified mail, postage prepaid, return receipt requested, or by facsimiletransmission followed by delivery of a “hard” copy, and shall be deemedreceived upon the date of receipt thereof.

 

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| If to Owner:       |   | Spin Forge,  LLC                            |
|--------------------|--------|---------------------------------------------|
|               |   | 2 Evergreen  Road                           |
|               |   | Severna  Park, Maryland 21146               |
|               |   | Attention:  Joseph Allwein                  |
|               |   | Facsimile:  (410) 431-7050                  |
|               |   |                                        |
| With a copy to:    |   | Van Etten  Suzumoto & Becket LLP   |
|               |   | 1620 26th  Street, Suite 600 North     |
|               |   | Santa  Monica, California 90404             |
|               |   | Attention:  Richard S. Grant, Esq.     |
|               |   | Facsimile:  (310) 315-8210                  | A |
|               |   |                                        |
| If to DMC:         |   | Dynamic  Materials Corporation              |
|               |   | 5405 Spine  road                            |
|               |   | Boulder,  Colorado 80301                    |
|               |   | Attention:  Richard Santa                   |
|               |   | Facsimile:  (303) 604-1897                  |
|               |   |                                        |
| With a copy  to:   |   | Milan D. Smith, Jr., Esq.         |
|               |   | Smith Crane Robinson & Parker, LLP |
|               |   | Suite 500, 21515 Hawthorne Boulevard   |
|               |   | Torrance, California 90503                  |
|               |   | Fax: (310) 543-4507                         |
|               |   |                                        |
| To Escrow  Holder: |   | Carolyn Marcial                             |
|               |   | Escrow Officer                              |
|               |   | First American Title Insurance Company      |
|               |   | National Commercial Services                |
|               |   | 520 N. Central Avenue, 8th Floor            |
|               |   | Glendale, California 91203                  |
|               |   | Facsimile: (818) 242-5916                   |

 

Notice of change of address shall be given by written notice in themanner detailed in this Paragraph 14.

 

15.                                 **Broker.**At the Close of Escrow, DMC shall pay from funds accruing to DMC throughEscrow, pursuant to DMC’s separate agreement (the “**ListingAgreement**”) with Grubb & Ellis Company (“**Broker**”), the brokerage commission and fees owed to DMC’sBroker in connection with the transactions contemplated by this Agreement. TheOwner represents and warrants to DMC that it is not represented in thistransaction by the Broker. DMC represents and warrants to the Owner that exceptfor the Broker, it has engaged no other broker or finder in connection with anytransaction contemplated by this Agreement. The Owner represents and warrantsto DMC that it has engaged no broker or finder in connection with anytransaction contemplated by this Agreement. In the event any claims for brokers’or finders’ fees or commissions in connection with the negotiation, executionor consummation of this Agreement are made by anyone other than the Brokeragainst DMC, then the Owner shall indemnify, save

 

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harmless and defend DMC from and against such claims if they are basedupon any statement or representation or agreement by the Owner, and DMC shallindemnify, save harmless and defend the Owner from and against any claims,liabilities, damages, fees, losses, costs and expenses (including reasonableattorneys’ fees and expenses) if made or based upon any statement, representation or agreementmade by DMC or as a result of claims of Broker or pursuant to the ListingAgreement.

 

16.                                 **RequiredActions of Owner and DMC.**  TheOwner and DMC each agree to execute all such instruments and documents and totake all actions pursuant to the provisions hereof in order to consummate thepurchase and sale herein contemplated and shall use their good faith effortsand due diligence to accomplish the Close of Escrow in accordance with theprovisions hereof.

 

17.                                 **Assignment. **This Agreement may not be assignedby either party.

 

18.                                 **Miscellaneous.**

 

(a)                                  **PartialInvalidity.**  If any term orprovision of this Agreement or the application thereof to any person orcircumstance shall, to any extent, be invalid or unenforceable, the remainderof this Agreement, or the application of such term or provision to persons orcircumstances other than those as to which it is held invalid or unenforceable,shall not be affected thereby, and each such term and provision of thisAgreement shall be valid and be enforced to the fullest extent permitted bylaw.

 

(b)                                 **Waivers.**  No waiver of any breach of any covenant orprovision herein contained shall be deemed a waiver of any preceding orsucceeding breach thereof, or of any other covenant orprovision herein contained.  No extensionof time for performance of any obligation or act shall be deemed an extensionof the time for performance of any other obligation to act except those of thewaiving party, which shall be extended by a period of time equal to the periodof the delay.

 

(c)                                  **Successorsand Assigns**.  This Agreementshall be binding upon and shall inure to the benefit of the permittedsuccessors and assigns of the parties hereto.

 

(d)                                 **ProfessionalFees.**  In the event any actionor suit is brought by a party hereto against another party hereunder by reasonof any breach of any of the covenants, agreements or provisions on the part ofthe other party arising out of this Agreement, then the prevailing party shallbe entitled to have and recover of and from the other party all costs andexpenses of the action or suit, including, without limitation, actual attorneyfees, accounting and engineering fees, and any other professional feesresulting therefrom.

 

(e)                                  **EntireAgreement.**  This Agreement(including all Exhibits attached hereto) is the final expression of, andcontains the entire agreement between the parties with respect to the subjectmatter hereof and supersedes all prior understandings with respectthereto.  This Agreement may not bemodified, changed, supplemented or terminated, nor may any obligationshereunder be waived, except by written instrument signed by the party to becharged or by its agent duly authorized in writing or as otherwise expresslypermitted herein.  The parties

 

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do not intend toconfer any benefit hereunder on any person, firm or corporation other than theparties hereto.

 

(f)                                    **Time of Essence.** DMCand the Owner hereby acknowledge and agree that time is strictly of the essencewith respect to each and every term, condition, obligation and provision hereofand that failure to timely perform any of the terms, conditions, obligations orprovisions hereof by either party shall constitute a material breach of and anon-curable (but waivable) default under this Agreement by the party so failingto perform.  The provisions of thisparagraph shall apply to the requirement in this Agreement that Escrow shallclose on or before the date of the Scheduled Close of Escrow.

 

(g)                                 **Construction.**  Headings at the beginning of each paragraphand subparagraph are solely for the convenience of the parties and are not apart of the Agreement.  Whenever requiredby the context of this Agreement, the singular shall include the plural and themasculine shall include the feminine and vice versa.  This Agreement shall not be construed as ifit had been prepared by one of the parties, but rather as if both parties hadprepared the same.  Unless otherwiseindicated, all references to paragraphs and subparagraphs are to thisAgreement.  All exhibits referred to inthis Agreement and the Glossary of Terms are attached and incorporated by thisreference.  In the event the date onwhich Owner or DMC is required to take any action under the terms of thisAgreement is not a business day, the action shall be taken on the nextsucceeding business day.  A “**business day**” shall be a day on which the Escrow Holder isregularly open for business to the general public.

 

(h)                                 **GoverningLaw.**  The parties heretoacknowledge that this Agreement has been negotiated and entered into in theState of California.  The parties heretoexpressly agree that this Agreement shall be governed by, interpreted under,and construed and enforced in accordance with the laws of the State ofCalifornia.

 

(i)                                     **Separate Counterparts.** This document may be executed in one or moreseparate counterparts, each of which, when so executed, shall be deemed to bean original.  Such counterparts shall,together, constitute and be one and the same instrument.

 

(j)                                     **Further Assurances.** Each party hereto agrees that it will, atanytime and from time to time after the Close of Escrow, upon request of theother party hereto, do, execute, acknowledge and deliver or will cause to bedone, executed, acknowledged or delivered, such further acts, deeds,assignments, conveyances and assurances as may reasonably be required for thebetter carrying out of the transaction envisioned by this Agreement. Theparties agree that upon the Close of Escrow, the Owner shall have theunilateral right to record a termination of any Memorandum of Option concerningthe Option Agreement and/or the Operating Lease.

 

**//**

 

**//**

 

**//**

 

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**IN WITNESS WHEREOF**,the parties hereto have executed this Agreement as of the date and yearhereinabove written.

 

 
|   | **DYNAMIC  MATERIALS CORPORATION**,     |
|--------|-----------------------------------------|
|   |  a Delaware corporation            |
|   |                                    |
|   |                                    |
|   | By:                                     |   |   |
|   | Its:                                    |   |   |
|   | Date:                                   |   |   |
|   |                                    |
|   |                                    |
|   | **SPIN  FORGE, LLC**,                   |
|   | a California  limited liability company |
|   |                                    |
|   |                                    |
|   | By:                                     |   |   |
|   | Its:                                    |   |   |
|   | Date:                                   |   |   |
|        |                                         |  |  |  |  |

 

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**GLOSSARYOF TERMS**

 

1.                                       “**Close of Escrow**” means the date the DMC Deed and the AerojetDeed are recorded in the Official Records.

 

2.                                       “**Escrow**” means the escrow opened with the Escrow Holder forthe consummation of the transaction described in this Agreement.

 

3.                                       “**Escrow Holder**” means Carolyn Marcial Escrow Officer FirstAmerican Title Insurance Company National Commercial Services 520 N. CentralAvenue, 8th Floor Glendale, California 91203.

 

4.                                       “**Official Records**” means the records of the County RecorderLos Angeles County.

 

5.                                       “**Opening of Escrow**” means the date on which a fully executedcopy of this Agreement is delivered to Escrow Holder by Owner and DMC and DMCand Owner have delivered into the Escrow the other documents and agreementsrequired to be delivered into the Escrow under Section 4 above.

 

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**EXHIBIT A**

 

**LEGALDESCRIPTION OF PROPERTY**

 

**[TO BEATTACHED AT EXECUTION]**

 

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**EXHIBIT B**

 

**SUBLEASE**

 

**[TO BEATTACHED AT EXECUTION]**

 

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**EXHIBIT C**

 

**AMENDED AND RESTATED OPTION AGREEMENT**

 

**THIS AMENDED AND RESTATED OPTION AGREEMENT**(this “**Agreement**”) is made and entered into onthis              by and between **DYNAMIC MATERIALS CORPORATION**, aDelaware corporation (“**DMC**”), and **SPIN FORGE, LLC**, a California limited liability company (“**Owner**”), with respect to the following facts:

 

A.                                   TheOwner owns real property (the “**Owned Land**”)located in Los Angeles County, California with a street address of 1700 EastGrand Avenue, El Segundo, California 90245 and more particularly described on **Exhibit A** attached hereto and incorporated herein bythis reference. The Owned Land, together with all appurtenant easements andother appurtenances thereto, together with all buildings, structures, and otherimprovements located thereon and all fixtures attached thereto (collectively,the “**Building**”), is referred to hereincollectively as the “**Property**.”

 

B.                                     TheProperty is currently subject to that certain Operating Lease dated as of March 18,1998 (the “**Operating Lease**”) between Ownerand DMC providing for the lease of the Property by DMC from Owner.

 

C.                                     DMCand Owner have entered into an Option Agreement dated as of March 18,1998, which agreement (as heretofore modified, the “**OptionAgreement**”) has been previously modified by written Amendments Onethrough Five inclusive.

 

D.                                    TheOption Agreement was entered into concurrently with that certain Asset PurchaseAgreement (the “**Purchase Agreement**”) dated as of March 18,1998.  Capitalized terms used in thisAgreement and not otherwise defined in this Agreement shall have the meaningsascribed thereto in the Purchase Agreement.

 

E.                                      DMC has subleasedthe Property to **Aerojet-General Corporation** (“**Aerojet**”) pursuant to the provisions of a Sublease dated September 17,2004 (the “**Sublease**”).

 

F.                                      DMCand Owner wish to further amend the Option Agreement and to restate thecontents thereof in its entirety as set forth herein.

 

**NOW, THEREFORE**, in consideration of thepayment by DMC to Owner of the Option Fee and the Extension Fee and in considerationof the promises and agreements of the parties set forth herein, the sufficiencyof which is hereby acknowledged by both Owner and DMC, Owner and DMC herebypromise and agree as follows:

 

1.                                       **Option.**Owner hereby grants to DMC an exclusive option (the “**Option**”) to purchase the Property on the terms and subjectto the conditions set forth in this Agreement.

 

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A.                                   **Term.**The term of the Option (the “**Term**”)commenced as of March 18, 1998 and shall terminate on January 1,2012.

 

B.                                     **Time of Exercise.**The Option may be exercised by DMC at anytime from and after November 1, 2006 12:01 a.m. P.S.T. until theexpiration of the Term.

 

C.                                     **Procedure for Exercise.**The Option may be exercised duringthe time specified in Section 1(B) by delivering to Owner a writtennotice of exercise (the “**Exercise Notice**”)stating that DMC is thereby exercising the Option.

 

2.                                       **Purchase Price.**

 

The purchase price for the Property upon exercise of the Option (the “**Purchase Price**”) shall be Two Million Eight Hundred EightyThousand Dollars ($2,880,000.00); provided, however, that if the Option isexercised after January 31, 2007, the Purchase Price shall the greater of (A) thefair market value of the Property at the time the Option is exercised (asdetermined in accordance with the procedures set forth in Article 1, Section Cof the Operating Lease for the determination of “**ExtendedTerm Base Rent**”) or (B) Two Million Eight Hundred EightyThousand Dollars ($2,880,000.00); and provided further that if the Option isexercised on or before January 31, 2007 but the purchase of the Propertyis not closed on or before January 31, 2007 due to the default of theOwner or the fact that the sixty (60) day period called for in Section 11hereof has not yet passed, the Purchase Price shall be Two Million EightHundred Eighty Thousand Dollars ($2,880,000.00), provided that the purchase ofthe Property is closed within a reasonable period of time after Owner has curedsuch default.

 

3.                                       **Documents Received by DMC.**DMC hereby acknowledges that, asof the date of this Agreement, DMC has received copies of the followingdocuments:

 

A.                                   TheLand Title Survey of the Property prepared by Guy J. Olsen, dated June 27,1997.

 

B.                                     TheOwner’s Policy of Title Insurance Number 7130117X49 covering the Property datedeffective February 26, 1998 issued by Chicago Title Insurance Company toOwner; and Owner’s Policy of Title Insurance Number 9632400-8 covering theProperty dated effective December 11, 1996 issued by First American TitleInsurance Company (the “**Current Policy**”).

 

4.                                       **Owner’s Affirmative Operating Covenants.**Until the earliestto occur of the end of the Term, the purchase of the Property by DMC (or anyassignee of DMC’s interest in the Option), or the termination of thisAgreement, Owner shall operate, maintain, and repair the Property in a mannerrequired under the Operating Lease. In addition, Owner agrees to furthercooperate with DMC as follows:

 

A.**                                  **Ownerhereby agrees that DMC (and/or its nominee(s)) and their agents (“**Authorized Parties**”) shall have the right during the Term toaccess all and any part of the Property to undertake such inspections,investigations, tests, studies (including, but not limited to, entitlementand/or economic and feasibility studies and the environmental condition of the

 

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Property), review materials and determine the feasibility of obtainingsuch permits (including, without limitation, those related to title, lawfulsubdivision, economic and feasibility studies, zoning, building codes, setbackand other similar requirements and other governmental regulations, engineeringtests, government entitlements, economic feasibility and the existence andlocation of utilities), as DMC or other Authorized Party may elect to obtain.The activities envisioned and authorized by this Section 4 (A) aresometimes referred to herein as “**Section 4 (A) Activities**.”

 

B.**                                    **Therights granted in Section 4 (A) above are expressly conditioned uponfulfillment of the following requirements:

 

(i)                                     The AuthorizedParties shall not unreasonably interfere with Aerojet’s or any authorized thirdparty’s use or operation of the Property;

 

(ii)                                  Representatives ofOwner shall be notified at least two (2) business days prior to the timewhen any Authorized Party will be on the Property and Owner’s representativesshall have the right to accompany the Authorized Party at all times when thesame are on the Property and to take “split samples” of any tests conducted;

 

(iii)                               No Authorized Partyshall invade, alter or destroy the Property, nor any improvement thereon in anymanner whatsoever, except as expressly agreed by Owner; provided, however,Authorized Parties may do such invasive environmental, soils and geologicaltesting as may be commercially reasonable so long as the requirements of subsection (e) andSection 3 below are satisfied;

 

(iv)                              DMC shall obtain andmaintain (i) liability insurance in the amount of, at least, One MillionDollars ($1,000,000) for property damage coverage and in the amount of, atleast, One Million Dollars ($1,000,000) for personal injury coverage, and (ii) suchworkers’ compensation insurance and disability insurance, as required by law,all of which insurance shall name Owner as an additional insured party withrespect to DMC and any other Authorized Party. DMC (or any Authorized Party desiring to enter upon the Property toundertake Section 4 (A) Activities) shall provide to Owner one ormore certificates of insurance evidencing such coverage prior to entering uponthe Property for the purpose of conducting any Section 4 (A) Activities;and

 

(v)                                 Except as expresslynoted herein, any Section 4 (A) Activity performed on, or inconnection with the Property by DMC, or any other Authorized Party, shall be atthat party’s sole cost and expense.  DMC,for itself and any Authorized Party, covenants and agrees to pay, or caused tobe paid, in full all persons who perform labor upon or furnish materials to theProperty and not to permit or suffer any mechanic’s or materialman’s lien(s) ofany kind or nature to be asserted or enforced against the Property, for anywork done or materials furnished thereon or thereto at the instance or requestof, or on behalf of DMC, or any other Authorized Party.  Moreover, DMC shall have the responsibilityto remove, or cause to be removed, from the Property and lawfully dispose ofall cuttings, debris, core samples, test borings, materials, and any otherremains or samples resulting from any Section 4 (A) Activities, atits sole cost and expense.

 

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C.**                                    **DMC,for itself and any Authorized Party, hereby agrees to indemnify, defend andhold Owner, its agents, representatives and assigns, free and harmless from andagainst any and all losses, costs, liabilities, claims, damages or expenses ofany kind (including, without imitation, reasonable attorney fees and costs) arisingout of any Section 4 (A) Activities, or any other acts or omissionscaused, suffered, authorized or permitted by DMC, or any other AuthorizedParty, on or in connection with the Property in connection with the carryingout of any Section 4 (A) Activities. Moreover, DMC hereby agrees, at its sole cost and expense, to promptlyrestore, or cause to be restored, the Property substantially to its conditionimmediately prior to the performance of the Section 4 (A) Activitiesby DMC or any other Authorized Party.

 

D.                                    Owner understandsthat DMC and/or another Authorized Party may undertake the necessary processesand investigations with the cognizant government authorities for the masterplanning of the Property (“**Master Planning Activities**”),including, but not limited to, obtaining from the City of El Segundo and anyother cognizant governmental entities, a vesting tentative map, environmentalimpact reports, conditional use permits, and/or any other entitlement(s) deemednecessary or appropriate by DMC or any Authorized Party to enhance thedevelopability of the Property.

 

E.                                      Owner herebyauthorizes DMC and any other Authorized Party to undertake the Master PlanningActivities with respect to the Property and, subject to the restrictions hereincontained, authorizes DMC and such other Authorized Party to exercise suchpowers in its name and stead as may be necessary and appropriate in connectiontherewith.

 

F.**                                     **Ownerhereby agrees to join in executing any applications for governmental approvalsand/or entitlements reasonably as may be requested by DMC from time to time inconnection with such Master Planning Activities, but with no personalobligation being assumed by Owner beyond that of executing applications orother documents prepared by DMC or an Authorized Party in connection with theProperty.  DMC will reimburse, or cause the relevant Authorized Party to reimburse, Owner’sreasonable out-of-pocket expenses, if any, incurred in cooperating with suchattempts to obtain governmental approvals.

 

G.**                                    **Theagreement by Owner to cooperate with such Master Planning Activities and anyother provision of this Agreement shall not be construed as making either apartner or joint venturer of the other.

 

H.**                                   **Iffor any reason DMC or another Authorized Party does not acquire the Propertyfrom Owner, DMC shall deliver to Owner, at no cost or expense to Owner, suchwritten work product, except that which is subject to a recognized legalprivilege, pertaining to the development and improvement of the Property as ithas in its possession or control.

 

5.                                       **Owner’s Negative Operating Covenant.**Until the earliest tooccur of the end of the Term, the purchase of the Property by DMC (or anyassignee of DMC’s interest in the Option) or the termination of this Agreement,Owner shall not, without the prior written consent of DMC, which consent shallnot be unreasonably withheld, sell, convey, further option, lease, or otherwisecloud title to the Property or any portion thereof or contract to do any of theforegoing.

 

6.                                       **Title.**                   Titleto the Property shall be subject to the following matters:

 

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A.                                   Thelien for general real property taxes, general assessments, and all installmentsof special assessments against the Property for the year of Closing and allsubsequent years.

 

B.                                     Thematters set forth in the Current Policy other than monetary liens that areapproved pursuant to Section 6 (A) or 6 (C).

 

C.                                     Anyand all matters accepted or deemed accepted by DMC pursuant to Section 8of this Agreement.

 

The foregoingtitle exceptions are collectively referred to herein as the “**Permitted Exceptions**.”

 

7.                                       **Title Commitment.**Owner shall within ten (10) daysafter its receipt of the Exercise Notice, furnish to DMC a preliminary report(the “**Preliminary Report**”) from a titleinsurance company reasonably acceptable to both Owner and DMC (the “**Title Company**”) showing title to the Property vested inOwner. Contemporaneous with the delivery of the Preliminary Report, the TitleCompany shall deliver to DMC copies of all instruments referred to in thePreliminary Report.

 

8.                                       **Title Matters.**

 

A.                                   **Objection by DMC.**Within ten (10) days after DMC’sreceipt of the Preliminary Report, DMC shall give Owner notice of all titledefects to which it objects disclosed by the Preliminary Report (“**Title Defects**”) that are not already deemed approvedpursuant to Section 6 (A) and (B) hereof. Any and all TitleDefects which are not objected to by notice from DMC to Owner given within saidten (10) day period shall be deemed accepted by DMC and shall constitutePermitted Exceptions.

 

B.                                     **Owner’s Option to Cure.**In the event DMC gives Owner timelynotice of DMCs objection to any Title Defects, Owner shall have the right tocure such Title Defects at or prior to the Closing as provided in this Section 8(B) but shall not be obligated hereby to cure any such Title Defects or toincur any expense in connection with any such cure.  For purposes hereof, a Title Defects shall bedeemed cured if (i) the Title Company deletes the Title Defects from thePreliminary Report and the Policy; or (ii) the Title Company undertakes inwriting to add a provision to the Policy obligating the Title Company, withinthe limits of such Policy, to protect DMC against loss or damage incurred onaccount of such Title Defects.

 

C.                                     **Termination by DMC.**If each of the Title Defects timelyobjected to by DMC has not been cured prior to the date of the Closing, DMCshall have the right, as its sole and exclusive remedy, to be exercised bywritten notice given to Owner at or prior to the Closing, to: (i) terminatethis Agreement; (ii) waive its objection to such Title Defects and acceptthe same as Permitted Exceptions; or (iii) reduce the Purchase Price toreflect the detriment to the Property caused by the Title Defects as mutuallyagreed by Owner and DMC, provided that Owner and DMC shall have no obligationto agree on such amount.  In the eventDMC does not notify Owner and the Escrow Holder at or prior to the Closing (i) ofits decision to terminate this

 

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Agreement, (ii) thatthe Owner and DMC have not reached agreement on the reduction of the PurchasePrice, or (iii) DMC has decided not to waive its objection(s) to anynon-cured Title Defects, DMC shall be deemed to have waived its objection tosuch Title Defects and to have accepted such Title Defects as Permitted Exceptions.  In the event this Agreement is terminated byDMC pursuant to this Section 8 (C) both parties shall thereupon berelieved of all further obligations hereunder.

 

9.                                     **As-Is Sale.**DMC is thoroughly familiar with the condition ofthe Property.  DMC IS NOT RELYING ON ANYREPRESENTATION, WARRANTY, WRITTEN INFORMATION, DATA, REPORT OR STATEMENT OFOWNER OR ITS AGENTS AS TO THE CONDITION OF THE PROPERTY AND IS PURCHASING THEPROPERTY IN ITS “AS-IS” “WHERE-IS” CONDITION, WITH ALL FAULTS, BASED SOLELY UPONDMC’S KNOWLEDGE OF THE PROPERTY AND ITS OWN INDEPENDENT INSPECTION AND REVIEWOF THE PROPERTY. BY CONSUMMATING THE CLOSING, DMC SHALL BE DEEMED TO HAVE BEENSATISFIED WITH ALL ASPECTS OF THE PROPERTY, INCLUDING. WITHOUTLIMITATION, THE CONDITION AND PHYSICAL ASPECTS OF THE BUILDING, THE CONDITIONOF THE PROPERTY, THE AVAILABILITY OF UTILITIES AND SANITARY FACILITIES AND THESUITABILITY OF THE PROPERTY FOR ITS INTENDED USE.

 

10.                                 **Prorations.**Realproperty taxes, assessments, and current installments of special assessments onthe Property shall be prorated to the date of Closing.  All other items of income and expense for theProperty shall be prorated to the date of the Closing based upon the bestinformation available on the date of the Closing. Prorations under this Section 10based upon estimated amounts or deferred until further information becomesavailable shall be re-prorated between the parties after the Closing as soon asthe information required to make a definitive proration becomes available.

 

11.                                 **Closing.**Thepurchase and sale of the Property, and each of the deliveries contemplatedbelow, shall be consummated on or before sixty (60) calendar days after thedate of the Exercise Notice through an escrow (the “**Escrow**”)with an escrow company located in Los Angeles County that is reasonablysatisfactory to Owner and DMC (the “**Escrow Holder**”).  Escrow shall be opened as soon as practicablefollowing DMC’s exercise of the Option. This Agreement, as well as any escrow instructions executed by DMC andOwner at the request of the Escrow Holder shall constitute the Escrow Holder’sinstructions.  In the event of anyconflict or inconsistency between this Agreement and any other instructionsdelivered to the Escrow Holder, the terms of this Agreement shall govern theduties of the Escrow Holder and the rights and obligations of DMC and Owner. Atthe Closing:

 

A.                                   DMC(or any assignee of DMC’s interest in the Option) shall pay to Owner thePurchase Price as well in cash or other immediately available funds

 

B.                                     Ownershall convey the fee simple absolute of the Property to DMC (or any assignee ofDMC’s interest in the Option) by grant deed, free and clear of all liens andencumbrances, subject only to the Permitted Exceptions.

 

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C.                                     Ownershall assign, deliver and otherwise transfer (as appropriate) to DMC (or anyassignee of DMC’s interest in the Option) and DMC (or any assignee of DMC’sinterest in the Option) shall assume (as appropriate) all obligations of Ownerunder, any and all service, maintenance and management agreements, if any,affecting the Property unless DMC (or any assignee of DMC’s interest in theOption) have requested that Owner terminate any such prior to the Closing, andall plans, specifications, surveys, studies, warranties, licenses, permits,certificates of occupancy and all other similar items in Owner’s possession orcontrol affecting the Property.

 

D.                                    Ownershall obtain the unconditional commitment of the Title Company to issue to DMCits ALTA extended coverage policy of title insurance (the “**Policy**”)insuring title to the Property in DMC (or any assignee of DMC’s interest in theOption) in the amount of the Purchase Price.

 

E.                                      Theparties shall each do or cause to be done such other matters and things asshall be necessary or appropriate to consummate the Closing.

 

F.                                      Eachparty shall pay (through deliver into the Escrow or from funds derived from aportion of the Purchase Price) one-half of any charges imposed by the EscrowCompany for its services, Owner shall pay the premium charged by the TitleCompany for the Policy, the cost of any survey or survey update necessary forthe Title Company to issue the Policy, the cost of any Documentary TransferTax, and the cost of discharging any monetary encumbrance that is a lien on theProperty, and DMC (or any assignee of DMC’s interest in the Option) shall payall recording fees.

 

12.                                 **Sales Commissions.** Owner and DMC shall each indemnify,defend and hold the other harmless from and against any and all claims forcommissions, fees or other compensation made by any real estate broker, agent,salesman, finder, or other person as a result of the sale of the Propertyherein contemplates on account of any implied or express commitment orundertaking to pay such a commission or fee made by the indemnifying party.

 

13.                                 **Assignment.**This Agreement shall be binding and effective onand inure to the benefit of the successors and assigns of the partieshereto.  Either party shall have theright to assign its rights under this Agreement to any person or entity withoutobtaining the consent of the other party. Upon any such assignment and theassumption in writing by the assignee of all obligations and benefits underthis Agreement by the assignee (with a copy of such assignment and assumptionbeing delivered to the non-assigning party hereunder) the assignor shall berelieved of any further financial or other obligation to the other party underthis Agreement.

 

14.                              **Recording.**Ownerand DMC shall promptly upon the request of either of them execute a short formmemorandum of this Agreement in form and substance acceptable to both Owner andDMC and suitable for recording and, at the option of either party, may filesuch memorandum for record in the Official Records of Los Angeles County,California.

 

15.                               **SpecificPerformance.**The parties agree that it is impossible to measure inmoney the damages which would accrue to DMC by reason of a failure by Owner toperform any of the obligations as set forth in this Agreement.  Accordingly, Owner agrees that DMC

 

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mayhave specific performance of this Agreement in any court of competentjurisdiction.  Furthermore, if DMC or anysuccessor-in-interest institutes any action or proceeding to enforce theprovisions of this Agreement, any person (including Owner) against whom suchaction or proceeding is brought hereby waives the claim or defense therein thatDMC or any successor-in-interest has an adequate remedy at law.

 

16.                                **Attorneys’Fees.**In the event that a law suit is brought to enforce orinterpret all or any portion of this Agreement, the prevailing party in suchsuit shall be entitled to recover, in addition to any other relief available tosuch party, reasonable costs and expenses, including, without limitation,attorneys’ fees, incurred in connection with such suit.

 

17.                                 **Notices.**All notices provided for herein shall be in writingand shall be deemed given to a party when a copy thereof, addressed to suchparty as provided herein, is actually delivered by personal delivery, byovernight courier service, by facsimile transmission, or by certified orregistered mail, return receipt requested, to the address of such party.  All notices to Owner shall be addressed toOwner at the following address and facsimile number or such other address andfacsimile number of which Owner gives DMC notice hereunder:

 
| If to Owner:                                                                                                                                                                        |   | Spin Forge,  LLC                            |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------|
|                                                                                                                                                                                |   | 2 Evergreen  Road                           |
|                                                                                                                                                                                |   | Severna  Park, Maryland 21146               |
|                                                                                                                                                                                |   | Attention:  Joseph Allwein                  |
|                                                                                                                                                                                |   | Facsimile:  (410) 431-7050                  |
|                                                                                                                                                                                |   |                                        |
| With a copy to:                                                                                                                                                                     |   | Van Etten  Suzumoto & Becket LLP   |
|                                                                                                                                                                                |   | 1620 26th  Street, Suite 600 North     |
|                                                                                                                                                                                |   | Santa  Monica, California 90404             |
|                                                                                                                                                                                |   | Attention:  Richard S. Grant, Esq.     |
|                                                                                                                                                                                |   | Facsimile:  (310) 315-8210                  | A |
|                                                                                                                                                                                |   |                                        |
| All notices  to DMC shall be addressed to DMC at the following address and facsimile  number or such other address and facsimile number of which DMC gives Owner  notice hereunder: |
|                                                                                                                                                                                |   |                                        |
| If to DMC:                                                                                                                                                                          |   | Dynamic  Materials Corporation              |
|                                                                                                                                                                                |   | 5405 Spine  road                            |
|                                                                                                                                                                                |   | Boulder,  Colorado 80301                    |
|                                                                                                                                                                                |   | Attention:  Richard Santa                   |
|                                                                                                                                                                                |   | Facsimile:  (303) 604-1897                  |
|                                                                                                                                                                                |   |                                        |
| With a copy  to:                                                                                                                                                                    |   | Milan D. Smith, Jr., Esq.         |
|                                                                                                                                                                                |   | Smith Crane Robinson & Parker, LLP |
|                                                                                                                                                                                |   | Suite 500, 21515 Hawthorne Boulevard   |
|                                                                                                                                                                                |   | Torrance, California 90503                  |
|                                                                                                                                                                                |   | Fax: (310) 543-4507                         |

 

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Either party may change its address for notice purposes by givingnotice thereof to the other party in accordance with the provisions of this Section 17.

 

18.                                 **Governing Law and Venue.**The validity and effect of thisAgreement shall be determined in accordance with the laws of the State ofCalifornia (without regard to its conflict of law doctrine) and the venue forany action to enforce or interpret this Agreement shall be in a court ofcompetent jurisdiction located in the State of California and each of theparties consents to the jurisdiction of such court in any such action orproceeding and waives any objection to venue laid therein.

 

19.                                 **Survival.**This Agreement and all obligations provided hereinshall, to the extent not fully satisfied and performed by or through theClosing, survive the Closing and the conveyance of title to the Property.

 

20.                                 **Computation of Time.**If any event or performance hereunderis scheduled or required to occur on a date which is on a Saturday, Sunday, orlegal state or federal holiday in Los Angeles, California, the event orperformance shall be required to occur on the next day which is not a Saturday,Sunday, or legal state or federal holiday in Los Angeles, California.

 

21.                                 **Entire Agreement.**This Agreement contains the entireunderstanding and agreement between the parties with respect to the subjectmatter hereof and supersedes all prior agreements, commitments, understandings,warranties, and negotiations, all of which are by the execution hereof renderednull and void.  No amendment ormodification of this Agreement shall be made or deemed to have been made unlessin writing, executed by the party or parties to be bound thereby.

 

**IN WITNESS WHEREOF**, the parties hereto haveexecuted this Agreement on the dates indicated below intending that it be validand effective from and after the date first above written.

 
|   | **DYNAMIC  MATERIALS CORPORATION**,     |
|--------|-----------------------------------------|
|   |  a Delaware corporation            |
|   |                                    |
|   |                                    |
|   | By:                                     |   |   |
|   | Its:                                    |   |   |
|   | Date:                                   |   |   |
|   |                                    |
|   | **SPIN  FORGE, LLC**,                   |
|   | a California  limited liability company |
|   |                                    |
|   |                                    |
|   | By:                                     |   |   |
|   | Its:                                    |   |   |
|   | Date:                                   |   |   |
|        |                                         |  |  |  |  |

 

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**EXHIBIT D**

 

**SUBLEASE ASSIGNMENT**

 

**[TO BE ATTACHED AT EXECUTION]**

 

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**EXHIBIT E**

 

**AEROJETDEED**

 

**[TO BEATTACHED AT EXECUTION]**

 

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**EXHIBIT F**

 

**DMC DEED**

 

**[TO BEATTACHED AT EXECUTION]**

 

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