Document:

EXHIBIT 10.4
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                               AMENDMENT TO
                           EMPLOYMENT AGREEMENT

      This AMENDMENT TO EMPLOYMENT AGREEMENT dated as of September 27, 2005
between Brent A. Latta (the "Executive") and Landauer, Inc., a Delaware
corporation (the "Company").

      WHEREAS, the Executive and the Company are parties to an Employment
Agreement dated as of February 29, 1996 (the "Employment Agreement");

      WHEREAS, the Executive currently serves as the President and Chief
Executive Officer of the Company and as a director of the Company;

      WHEREAS, the Executive desires to retire prior to attaining age 65;

      WHEREAS, the Company consents to the Executive's retirement prior to
attaining age 65; and

      WHEREAS, the Company and the Executive desire to enter into this
Amendment to Employment Agreement to set forth the terms and conditions of
the Executive's retirement from the Company.

      NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein, the parties hereby agree as follows:

      1.    TERMINATION OF EMPLOYMENT.  The Executive hereby resigns from
employment with the Company, effective as of the date of this Amendment to
Employment Agreement.

      2.    PAYMENTS AND BENEFITS UPON TERMINATION OF EMPLOYMENT.

            (a)   On April 1, 2006 (or any earlier date which is at least
six (6) months after the termination of the Executive's employment with the
Company), the Company shall pay to the Executive the sum of $1,207,278.84.
The Company has offered the Executive a choice as to the timing of the
payment of this compensation, and the Executive is, by executing this
Amendment to Employment Agreement, electing such lump sum payment.

            (b)   During the period from the date of this Amendment to
Employment Agreement until February 19, 2008 (the "Consulting Period"), the
Executive and his eligible dependents will be eligible for full coverage
under the Company's retiree healthcare plan, at the same cost to the
Executive as to the Company's active employees from time to time.

            (c)   Upon the execution of this Amendment to Employment
Agreement the Executive's stock options and other equity awards shall, to
the extent not otherwise exercisable or vested, shall become exercisable,
or become vested, in full.  The Executive's stock options shall remain
exercisable following the Executive's termination of employment in
accordance with their terms; provided that, under the 1996 Equity Plan of
the Company, as amended, the Compensation Committee of the Company's Board
of Directors has consented to his retirement prior to reaching age 65.

            (d)   The Executive's benefit under the Supplemental Key
Executive Retirement Plan of Landauer, Inc., commencing upon his attaining
age 65, will be calculated as if (i) the Executive had completed 25 years
of service, (ii) between the date of this Amendment to Employment Agreement
and February 19, 2008, the Executive's base salary had continued at the
rate in effect on January 1, 2005 and (iii) for each complete fiscal year
between the date of this Amendment to Employment Agreement and February 19,
2008, the Executive had received an annual bonus equal to the annual target
amount for the Executive for fiscal year 2005.

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            (e)   The Company will make available to the Executive
professional consulting services (at an aggregate cost of not more than
$35,000) to assist the Executive in identifying appropriate opportunities
for service on the boards of directors of other organizations not described
in Section 4(b) below.

            (f)   The Company will reimburse the Executive for the legal
fees he incurs (not to exceed $15,000) in connection with this Amendment to
Employment Agreement.

            (g)   The Executive shall not be eligible for benefits under
the Landauer, Inc. Executive Special Severance Plan.

      3.    TERMINATION OF BOARD MEMBERSHIP; DIRECTOR EMERITUS POSITION.
The Executive hereby resigns as a director of the Company, effective as of
the date of this Amendment to Employment Agreement, and shall thereafter
have the position of Director Emeritus of the Company.

      4.    OBLIGATIONS OF THE EXECUTIVE.

            (a)   During the Consulting Period the Executive will not take
a position with any other organization, other than service on the boards of
directors of organizations not described in Section 4(b), and will make
himself available to provide such consulting services to the Company as the
Company may, from time to time, request.

            (b)   The Executive acknowledges that in the course of the
Executive's employment with the Company the Executive has become familiar
with trade secrets and other confidential information concerning the
Company and that the Executive's services were of special, unique and
extraordinary value to the Company.  The Executive agrees that, during the
Consulting Period, and for a period of 18 months thereafter, the Executive
shall not directly or indirectly, except as a passive investor beneficially
owning not more than two percent of the voting securities of any publicly
held company, engage in, or own or control any interest in, or act as
director, officer, employee, agent, proprietor or otherwise of, or
consultant to, any firm or corporation directly or indirectly engaged, as
these terms may be reasonably construed, (i) in a business substantially
similar to that of the Company or (ii) in competition with the Company.
During the Consulting Period, and for a period of 18 months thereafter, the
Executive further agrees that the Executive shall not directly or
indirectly induce or attempt to induce any of the employees of the Company
to terminate such employment.   If, at any time of enforcement of this
Section 4(b) a court holds that the restrictions stated herein are
unreasonable under circumstances then existing, the Executive agrees that
the maximum period, scope or geographical area reasonable under such
circumstances shall be substituted for the stated period, scope or area and
that the court shall be allowed to revise the restrictions contained herein
to cover the maximum period, scope and area permitted by law.  This
Amendment to Employment Agreement shall not authorize a court to increase
or broaden any of the restrictions in this Section 4(b).

            (c)   The Executive agrees that all research and other
information, discoveries, inventions, improvements, formulas, designs,
trademarks, products, plans or writings originated, conceived, discovered,
made or first reduced to practice by the Executive, either solely or
jointly with others during and within the scope of the Executive's
employment by the Company, or on the premises, or using the facilities of
the Company, whether or not at the request or suggestion or in accordance
with the plans of the Company, shall be the sole property of the Company,
or its designees, successors or assigns.  The Executive shall maintain
records thereof in the form and manner prescribed by the Company, and upon
request, the Executive will disclose the same to the Company in such form
and manner as the Company may provide, and the Executive will execute and
deliver to the Company, or its designees, successors or assigns, such
written applications, diagrams, plans, assignments, deeds or other
documents, and do such other acts as may be necessary or appropriate to
patent, register, copyright, obtain, perfect, or explain any such research

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and other information, discoveries, inventions, improvements, formulas,
designs, trademarks, products, plans or writings, and to perfect the title
of the Company, or its assignees, successors or assigns thereto, provided
that the Company or its assignees, successors or assigns shall compensate
the Executive in such a manner that the Executive will suffer no out-of-
pocket expense while so doing.

            (d)   The Executive agrees that the Executive shall not
divulge, communicate, or utilize for the benefit of the Executive or any
other party or person, any secret or confidential information which the
Executive has acquired or may acquire during the Executive's employment by
the Company, whether technical or nontechnical, pertaining to the business
or affairs of the Company, or of any of its clients, customers, consultants
or collaborators, except to such extent as may be necessary in the ordinary
course of performing the Executive's particular assigned duties as an
employee of the Company.  In this connection the Executive has been
informed and recognizes that a part of the Company's business connection
may relate to research and development of products and processes, some of
which may be based on scientific or technological concepts which are
themselves recent developments, and to the development of such concepts,
any or all of which may include or constitute technical or nontechnical
information which the Company has the right to protect by holding it secret
or confidential, and that in the Executive's said employment the Executive
may be given access to or required to use or develop such proprietary
information and/or trade secrets.  Upon termination of the Executive's said
employment the Executive will promptly deliver to the Company all drawings,
blueprints, manuals, letters, notes, notebooks, reports, records, writing
and all other materials, originated, conceived, discovered, made or
otherwise provided by the Executive or others, pertaining to the business
or affairs of the Company which are in the Executive's possession or under
the Executive's control, whether or not then on the premises of the
Company.

            (e)   The Executive acknowledges that the Company would be
damaged irreparably in the event that any provision of Section 4(b), 4(c)
or 4(d) of this Amendment to Employment Agreement were not performed in
accordance with its terms or were otherwise breached and that money damages
would be an inadequate remedy for any such nonperformance or breach.
Accordingly, the Executive agrees that the Company and its successors and
permitted assigns shall be entitled, in addition to other rights and
remedies existing in their favor, to an injunction or injunctions to
prevent any breach or threatened breach of any of such provisions and to
enforce such provisions specifically (without posting a bond or other
security).  The Executive agrees that the Executive will submit to the
personal jurisdiction of the courts of the State of Illinois in any action
by the Company to obtain injunctive or other relief contemplated by this
Section 4(e).

      5.    GENERAL RELEASE.

            (a)   The Executive, on behalf of the Executive and anyone
claiming through the Executive, hereby agrees not to sue the Company or any
division, subsidiary, affiliate or other related entity of the Company
(whether or not such entity is wholly owned) or any of the past, present or
future directors, officers, administrators, trustees, fiduciaries,
employees, agents, attorneys or shareholders of the Company or any of such
other entities, or the predecessors, successors or assigns of any of them
(hereinafter referred to as the "Released Parties"), and agrees to release
and discharge, fully, finally and forever, the Released Parties from any
and all claims, causes of action, lawsuits, liabilities, debts, accounts,
covenants, contracts, controversies, agreements, promises, sums of money,
damages, judgments and demands of any nature whatsoever, in law or in
equity, both known and unknown, asserted or not asserted, foreseen or
unforeseen, which the Executive ever had or may presently have against any

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of the Released Parties arising from the beginning of time up to and
including the effective date of this Amendment to Employment Agreement,
including, without limitation, all matters in any way related to the
Executive's employment by the Company or any of its affiliates, the terms
and conditions thereof, any failure to promote the Executive and the
termination or cessation of the Executive's employment with the Company or
any of its affiliates, and including, without limitation, any and all
claims arising under the Civil Rights Act of 1964, the Civil Rights Act of
1991, the Civil Rights Act of 1866, the Age Discrimination in Employment
Act, the Older Workers' Benefit Protection Act, the Family and Medical
Leave Act, the Americans With Disabilities Act, the Employee Retirement
Income Security Act of 1974, the Illinois Human Rights Act, or the Chicago
or Cook County Human Rights Ordinance, each as may be amended from time to
time, or any other federal, state, local or foreign statute, regulation,
ordinance or order, or pursuant to any common law doctrine; PROVIDED,
HOWEVER, that nothing contained in this Amendment to Employment Agreement
shall apply to, or release the Company from, any obligation of the Company
contained in this Amendment to Employment Agreement.  The consideration
offered in this Amendment to Employment Agreement is accepted by the
Executive as being in full accord, satisfaction, compromise and settlement
of any and all claims or potential claims, and the Executive expressly
agrees that the Executive is not entitled to, and shall not receive, any
further recovery of any kind from the Company or any of the other Released
Parties, and that in the event of any further proceedings whatsoever based
upon any matter released herein, neither the Company nor any of the other
Released Parties shall have any further monetary or other obligation of any
kind to the Executive, including any obligation for any costs, expenses or
attorneys' fees incurred by or on behalf of the Executive.  The Executive
agrees that the Executive has no present or future right to employment with
the Company or any of the other Released Parties.

            (b)   The Executive expressly represents and warrants that the
Executive is the sole owner of the actual and alleged claims, demands,
rights, causes of action and other matters that are released herein; that
the same have not been transferred or assigned or caused to be transferred
or assigned to any other person, firm, corporation or other legal entity;
and that the Executive has the full right and power to grant, execute and
deliver the general release, undertakings and agreements contained herein.

      6.    ACKNOWLEDGMENT BY EXECUTIVE.  BY EXECUTING THIS RELEASE AND
NONCOMPETITION AGREEMENT, THE EXECUTIVE EXPRESSLY ACKNOWLEDGES THAT THE
EXECUTIVE HAS READ THIS AMENDMENT TO EMPLOYMENT AGREEMENT CAREFULLY, THAT
THE EXECUTIVE FULLY UNDERSTANDS ITS TERMS AND CONDITIONS, THAT THE
EXECUTIVE HAS BEEN ADVISED TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING
THIS AMENDMENT TO EMPLOYMENT AGREEMENT, THAT THE EXECUTIVE HAS BEEN ADVISED
THAT THE EXECUTIVE HAS 21 DAYS WITHIN WHICH TO DECIDE WHETHER OR NOT TO
EXECUTE THIS AMENDMENT TO EMPLOYMENT AGREEMENT AND THAT THE EXECUTIVE
INTENDS TO BE LEGALLY BOUND BY IT.  DURING A PERIOD OF SEVEN DAYS FOLLOWING
THE DATE OF THE EXECUTIVE'S EXECUTION OF THIS AMENDMENT TO EMPLOYMENT
AGREEMENT, THE EXECUTIVE SHALL HAVE THE RIGHT TO REVOKE THE RELEASE OF
CLAIMS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT BY SERVING WITHIN
SUCH PERIOD WRITTEN NOTICE OF REVOCATION.

      7.    IMPACT ON OTHER AGREEMENTS.  This Amendment to Employment
Agreement supersedes all of the provisions of Sections 1 through 4 of the
Employment Agreement; the remaining provisions of the Employment Agreement
shall continue in full force and effect.  Nothing contained herein shall be
deemed to limit or otherwise affect the provisions of any noncompetition
agreement or code of conduct arrangement between the Executive and the
Company or the provisions of any other agreement or arrangement between the
Executive and the Company that is unrelated to the subject matter of this
Amendment to Employment Agreement.

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      IN WITNESS WHEREOF, the parties hereto have executed this Amendment
to Employment Agreement as of the day and year first above written.

                                    LANDAUER, INC.

                                    By
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                                    EXECUTIVE:

                                    ------------------------------------
                                                Brent A. Latta

                                     5CREDIT AGREEMENT

     THIS CREDIT AGREEMENT (this "Agreement") is entered into as of September
15, 2005, by and between DYNAMIC MATERIALS CORPORATION, a Delaware corporation
("Borrower"), and WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank").

                                    RECITALS

     Borrower has requested that Bank extend or continue credit to Borrower as
described below, and Bank has agreed to provide such credit to Borrower on the
terms and conditions contained herein.

     NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Bank and Borrower hereby agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

     "advance" has the meaning set forth in Section 2.1(a)

     "Business Day" means (i) for all purposes other than are covered by clause
(ii) below, any day except a Saturday, Sunday or any other day on which
commercial banks in California are authorized or required by law to close and
(ii) with respect to all notices, determinations, fundings, issuances and
payments in connection with any Euro-denominated Advances, any day that is a
Business Day described in clause (i) above and that is also (a) a day for
trading by and between banks in Dollar or Euro, as the case may be, deposits in
the London interbank market and (b) a day on which banking institutions are open
for business in London.

     "Commitment Amount" means the Dollar Equivalent Amount of $7,500,000.

     "Credit Notice" means a notice in the form of Exhibit A hereto.

     "Dollars" means the lawful currency of the United States of America.

     "Dollar-denominated Advance" means an advance under the Line of Credit
which is made in Dollars.

     "Dollar Equivalent Amount" means, at any time, (a) with respect to any
amount denominated in Dollars, such amount, and (b) with respect to any amount
denominated in Euro, the equivalent amount thereof in Dollars as determined by
Bank at such time on the basis of the Spot Rate (determined in respect of the
most recent Revaluation Date) for the purchase of Dollars with Euro.

     "EMU" means the economic and monetary union in accordance with the Treaty
of Rome 1957, as amended by the Single European Act 1986, the Maastricht Treaty
of 1992 and the Amsterdam Treaty of 1998.

     "EMU Legislation" means the legislative measures of the European Council
for the introduction of, changeover to or operation of a single or unified
European currency.

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     "Euro" means the lawful currency of the Participating Member States
introduced in accordance with the EMU Legislation

     "Euro-denominated Advances" means advances under the Line of Credit which
are made in Euro.

     "Euro Sublimit" means the Dollar Equivalent Amount of $2,000,000.

     "Line of Credit" has the meaning set forth in Section 2.1(a)

     "Note" has the meaning set forth in Section 2.1(a).

     "Participating Member State" means each state so described in any EMU
Legislation.

     "Revaluation Date" means each of the following: (a) each date on which a
Euro-denominated Advance is made, (b) each date on which a Fixed Rate Term (as
defined in the Note) applicable to a Euro-denominated Advance is continued, (c)
the last Business Day of each week, and (d) such additional dates as Bank may
determine during the continuance of an Event of Default (as defined in the
Note).

     "Spot Rate" for Dollars or Euro means the rate quoted by the Bank as the
spot rate for the purchase by the Bank of such currency with the other currency
through its foreign exchange desk at approximately 11:00 A.M. (San Francisco
time) on the date two Business Days prior to the date as of which the foreign
exchange computation is made.

                                   ARTICLE II
                                  CREDIT TERMS

     SECTION 2.1.   LINE OF CREDIT.

     (a)  Line of Credit. Subject to the terms and conditions of this Agreement,
Bank hereby agrees to make advances (each, an "advance") to Borrower from time
to time up to and including June 30, 2007 ("Line of Credit"), the proceeds of
which shall be used for working capital and general corporate purposes.
Borrower's obligation to repay advances under the Line of Credit shall be
evidenced by a promissory note dated as of September 15, 2005 ("Note"), all
terms of which are incorporated herein by this reference. Advances under the
Line of Credit shall be Dollar-denominated Advances or Euro-denominated
Advances, provided, however, that as of each Revaluation Date, (i) the maximum
principal balance of outstanding Euro-denominated Advances shall not exceed the
Euro Sublimit, and (ii) the aggregate maximum principal balance of outstanding
Dollar-denominated Advances and Euro-denominated Advances shall at not exceed
Commitment Amount.

     (b)  Letter of Credit Subfeature. As a subfeature under the Line of Credit,
Bank agrees from time to time during the term thereof to issue or cause an
affiliate to issue standby letters of credit denominated only in Dollars for the
account of Borrower (each, a "Letter of Credit" and collectively, "Letters of
Credit"); provided however, that the aggregate undrawn amount of all outstanding
Letters of Credit shall not at any time exceed Five Hundred Thousand Dollars
($500,000.00). The form and substance of each Letter of Credit shall be subject
to approval by Bank, in its sole discretion. No Letter of Credit shall have an
expiration date subsequent to the maturity date of the Line of Credit. The
undrawn amount of all Letters of Credit shall be

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reserved under the Line of Credit and shall not be available for borrowings
thereunder. Each Letter of Credit shall be subject to the additional terms and
conditions of the Letter of Credit agreements, applications and any related
documents required by Bank in connection with the issuance thereof. Each drawing
paid under a Letter of Credit shall be deemed a Dollar-denominated Advance under
the Line of Credit and shall be repaid by Borrower in accordance with the terms
and conditions of this Agreement applicable to such advances; provided however,
that if advances under the Line of Credit are not available, for any reason, at
the time any drawing is paid, then Borrower shall immediately pay to Bank the
full amount drawn, together with interest thereon from the date such drawing is
paid to the date such amount is fully repaid by Borrower, at the rate of
interest applicable to Dollar-denominated Advances under the Line of Credit. In
such event Borrower agrees that Bank, in its sole discretion, may debit any
account maintained by Borrower with Bank for the amount of any such drawing.

     (c)  Borrowing and Repayment. Borrower may from time to time during the
term of the Line of Credit borrow, partially or wholly repay its outstanding
borrowings, and reborrow, subject to all of the limitations, terms and
conditions contained herein or in the Line of Credit Note; provided however,
that the total outstanding borrowings under the Line of Credit shall not at any
time exceed the maximum principal amount available thereunder, subject to the
terms of Section 2.1(d) below.

     (d)  Spot Rate Determination. Bank will determine the Spot Rate as of each
Revaluation Date to be used for calculating Dollar Equivalent Amounts of
Euro-denominated Advances. Such Spot Rate will become effective as of such
Revaluation Date and will be the Spot Rate employed in converting any amounts
between the applicable currencies until the next Revaluation Date to occur.

     (e)  Limitations. If Bank notifies Borrower at any time that the aggregate
outstanding principal balance of Dollar-denominated Advances at such time
exceeds 100% of the Commitment Amount, then, within 2 Business Days after
receipt of such notice, Borrower will prepay advances in an aggregate amount
sufficient to reduce such aggregate outstanding principal balance as of such
date of payment to an amount not to exceed 100% of the Commitment Amount. If
Bank notifies Borrower at any time that the outstanding principal balance of
Euro-denominated Advances at such time exceeds 105% of the Euro Sublimit, then,
within 3 Business Days after receipt of such notice, Borrower will prepay
advances in an aggregate amount sufficient to reduce such outstanding principal
balance as of such date of payment to an amount not to exceed 100% of the Euro
Sublimit. All payments required hereunder shall be subject to the prepayment
provisions of the Note.

     SECTION 2.2.   INTEREST/FEES.

     (a)  Interest. The outstanding principal balance of the Line of Credit
shall bear interest at the rate of interest set forth in the Line of Credit
Note.

     (b)  Computation and Payment. Interest shall be computed on the basis of a
360-day year, actual days elapsed. Interest shall be payable at the times and
place set forth in each promissory note or other instrument or document required
hereby.

     (c)  Fees. Borrower shall pay to Bank a non-refundable fee in the amount of
$1,000.00 for each Euro-denominated Advance at the time such advance is made.

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     SECTION 2.4.   COLLECTION OF PAYMENTS. Borrower authorizes Bank to collect
all principal and interest due in connection with Dollar-denominated Advances
and all fees due under the Line of Credit by charging Borrower's deposit account
number 4123769044 with Bank, or any other deposit account maintained by Borrower
with Bank, for the full amount thereof. Should there be insufficient funds in
any such deposit account to pay all such sums when due, the full amount of such
deficiency shall be immediately due and payable by Borrower. Principal and
interest on Euro-denominated Advances shall paid by Borrower when due into the
following account:

          Bank: Deutsche Bank Ag Frankfurt
                Frankfurt, Germany
          Account Number: 100958748600
          Swift ID: DEUTDEFF

     SECTION 2.5.   COLLATERAL.

     As security for all indebtedness of Borrower to Bank under the Line of
Credit, Borrower hereby grants to Bank security interests of first priority
(subject to the terms of Section 6.8 below) in (a) all Borrower's accounts
receivable and other rights to payment, general intangibles, and inventory, and
(b) notwithstanding any provision to the contrary set forth in the security
agreement or UCC covering equipment, only equipment acquired after the date
hereof. Notwithstanding the inclusion of "general intangibles" above and in the
definitions of Collateral in the security agreements executed by Borrower, Bank
hereby disclaims a security interest in Borrower's patents, copyrights,
trademarks and other forms of intellectual property (collectively, "IP");
provided, however, that except that the Collateral shall include the proceeds of
all the IP that are accounts, (i.e. accounts receivable) of Borrower, or general
intangibles consisting of rights to payment, if a judicial authority (including
a U.S. Bankruptcy Court) holds that a security interest in the underlying IP is
necessary to have a security interest in such accounts and general intangibles
of Borrower that are proceeds of the IP, then the Collateral shall
automatically, and effective as of the closing date, include the IP to the
extent necessary to permit perfection of Bank's security interest in such
accounts and general intangibles of Borrower that are proceeds of the IP.

All of the foregoing shall be evidenced by and subject to the terms of such
security agreements, financing statements and other documents as Bank shall
reasonably require, all in form and substance satisfactory to Bank. Borrower
shall reimburse Bank immediately upon demand for all costs and expenses incurred
by Bank in connection with any of the foregoing security, including without
limitation, filing and recording fees and the costs of all appraisals and audits
during the existence of an Event of Default.

                                   ARTICLE III
                         REPRESENTATIONS AND WARRANTIES

     Borrower makes the following representations and warranties to Bank, which
representations and warranties shall survive the execution of this Agreement and
shall continue in full force and effect until the full and final payment, and
satisfaction and discharge, of all obligations of Borrower to Bank subject to
this Agreement.

     SECTION 3.1.   LEGAL STATUS. Borrower is a corporation, duly incorporated
and existing and in good standing under the laws of Delaware, and is qualified
or licensed to do

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business (and is in good standing as a foreign corporation, if applicable) in
all jurisdictions in which such qualification or licensing is required or in
which the failure to so qualify or to be so licensed could have a material
adverse effect on Borrower.

     SECTION 3.2.   AUTHORIZATION AND VALIDITY. This Agreement and each
promissory note, contract, instrument and other document required hereby or at
any time hereafter delivered to Bank in connection herewith (collectively, the
"Loan Documents") have been duly authorized, and upon their execution and
delivery in accordance with the provisions hereof will constitute legal, valid
and binding agreements and obligations of Borrower or the party which executes
the same, enforceable in accordance with their respective terms.

     SECTION 3.3.   NO VIOLATION. The execution, delivery and performance by
Borrower of each of the Loan Documents do not violate any provision of any law
or regulation, or contravene any provision of the Articles of Incorporation or
By-Laws of Borrower, or result in any breach of or default which could be
reasonably expected to have a material adverse effect on Borrower under any
contract, obligation, indenture or other instrument to which Borrower is a party
or by which Borrower may be bound.

     SECTION 3.4.   LITIGATION. There are no pending, or to the best of
Borrower's knowledge threatened, actions, claims, investigations, suits or
proceedings by or before any governmental authority, arbitrator, court or
administrative agency which could be reasonably likely to have a material
adverse effect on the financial condition or operation of Borrower other than
those disclosed by Borrower to Bank in writing prior to the date hereof.

     SECTION 3.5.   CORRECTNESS OF FINANCIAL STATEMENT. The financial statement
of Borrower dated June 30, 2005, a true copy of which has been delivered by
Borrower to Bank prior to the date hereof, (a) is complete and correct and
presents fairly the financial condition of Borrower, (b) discloses all
liabilities of Borrower that are required to be reflected or reserved against
under generally accepted accounting principles, whether liquidated or
unliquidated, fixed or contingent, and (c) has been prepared in accordance with
generally accepted accounting principles consistently applied. Since the date of
such financial statement there has been no material adverse change in the
financial condition of Borrower, nor has Borrower mortgaged, pledged, granted a
security interest in or otherwise encumbered any of its assets or properties
except in favor of Bank or for liens arising by operation of law in the ordinary
course of business or liens for unpaid taxes, mechanics' liens, materialmen or
workmens' liens payment for which is not yet due or is being contested in good
faith or as otherwise permitted by Bank in writing.

     SECTION 3.6.   INCOME TAX RETURNS. Borrower has no knowledge of any pending
assessments or adjustments of its income tax payable with respect to any year
which could be reasonably expected to have a material adverse effect on
Borrower.

     SECTION 3.7.   NO SUBORDINATION. There is no agreement, indenture, contract
or instrument to which Borrower is a party or by which Borrower may be bound
that requires the subordination in right of payment of any of Borrower's
obligations subject to this Agreement to any other obligation of Borrower.

     SECTION 3.8.   PERMITS, FRANCHISES. Borrower possesses, and will hereafter
possess, all permits, consents, approvals, franchises and licenses required and
rights to all trademarks, trade names, patents, and fictitious names, if any,
necessary to enable it to conduct the business in which it is now engaged in
compliance with applicable law.

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<PAGE>

     SECTION 3.9.   ERISA. Borrower is in compliance in all material respects
with all applicable provisions of the Employee Retirement Income Security Act of
1974, as amended or recodified from time to time ("ERISA"); Borrower has not
violated any provision of any defined employee pension benefit plan (as defined
in ERISA) maintained or contributed to by Borrower (each, a "Plan"); no
Reportable Event as defined in ERISA has occurred and is continuing with respect
to any Plan initiated by Borrower; Borrower has met its minimum funding
requirements under ERISA with respect to each Plan; and each Plan will be able
to fulfill its benefit obligations as they come due in accordance with the Plan
documents and under generally accepted accounting principles.

     SECTION 3.10.  OTHER OBLIGATIONS. Borrower is not in default on any
obligation for borrowed money, any purchase money obligation or any other
material lease, commitment, contract, instrument or obligation, which default
could be reasonably expected to have a material adverse effect on the Borrower.

     SECTION 3.11.  ENVIRONMENTAL MATTERS. Except as disclosed by Borrower to
Bank in writing prior to the date hereof, Borrower is in compliance in all
material respects with all applicable federal or state environmental, hazardous
waste, health and safety statutes, and any rules or regulations adopted pursuant
thereto, which govern or affect any of Borrower's operations and/or properties,
including without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, the Superfund Amendments and
Reauthorization Act of 1986, the Federal Resource Conservation and Recovery Act
of 1976, and the Federal Toxic Substances Control Act, as any of the same may be
amended, modified or supplemented from time to time. To Borrower's knowledge,
none of the operations of Borrower is the subject of any federal or state
investigation evaluating whether any remedial action involving an expenditure is
needed to respond to a release of any toxic or hazardous waste or substance into
the environment which could be reasonably expected to have a material adverse
effect on Borrower. Borrower has no material contingent liability in connection
with any release of any toxic or hazardous waste or substance into the
environment.

                                   ARTICLE IV
                                   CONDITIONS

     SECTION 4.1.   CONDITIONS OF INITIAL EXTENSION OF CREDIT. The obligation of
Bank to extend any credit contemplated by this Agreement is subject to the
fulfillment to Bank's satisfaction of all of the following conditions:

     (a)  Approval of Bank Counsel. All legal matters incidental to the
extension of credit by Bank shall be satisfactory to Bank's counsel.

     (b)  Documentation. Bank shall have received, in form and substance
satisfactory to Bank, each of the following, duly executed:

     (i)    This Agreement and each promissory note or other instrument or
            document required hereby.
     (ii)   Corporate Resolution-Borrowing.
     (iii)  Certificate of Incumbency.
     (iv)   Security Agreement Right to Payment and Inventory.
     (v)    Security Agreement Equipment.

                                       6
<PAGE>

     (vi)   Exhibit A to UCC Financing Statement.
     (vii)  Insurance Letter.
     (viii) Such other documents as Bank may require under any other Section of
            this Agreement.

     (c)  Financial Condition. There shall have been no material adverse change,
as determined by Bank, in the financial condition or business of Borrower, nor
any material decline, as determined by Bank, in the market value of any
collateral required hereunder or a substantial or material portion of the assets
of Borrower.

     (d)  Insurance. Borrower shall have delivered to Bank evidence of insurance
coverage on all Borrower's property, in form, substance, amounts, covering risks
and issued by companies satisfactory to Bank, and where required by Bank, with
loss payable endorsements in favor of Bank.

     SECTION 4.2.   CONDITIONS OF EACH EXTENSION OF CREDIT. The obligation of
Bank to make each extension of credit requested by Borrower hereunder shall be
subject to the fulfillment to Bank's satisfaction of each of the following
conditions:

     (a)  Compliance. The representations and warranties contained herein and in
each of the other Loan Documents shall be true on and as of the date of the
signing of this Agreement and on the date of each extension of credit by Bank
pursuant hereto, with the same effect as though such representations and
warranties had been made on and as of each such date except to the extent that
such representations expressly relate to a specific date, and on each such date,
no Event of Default as defined herein, and no condition, event or act which with
the giving of notice or the passage of time or both would constitute such an
Event of Default, shall have occurred and be continuing or shall exist.

     (b)  Documentation. Bank shall have received all additional documents which
may be required in connection with such extension of credit, which, in the case
of each Euro-denominated Advance, shall include a Credit Notice, duly completed,
delivered not later than 4 Business Days prior to the date of the requested
advance.

                                    ARTICLE V
                              AFFIRMATIVE COVENANTS

     Borrower covenants that so long as Bank remains committed to extend credit
to Borrower pursuant hereto, or any liabilities (whether direct or contingent,
liquidated or unliquidated) of Borrower to Bank under any of the Loan Documents
remain outstanding, and until payment in full of all obligations of Borrower
subject hereto, Borrower shall, unless Bank otherwise consents in writing:

     SECTION 5.1.   PUNCTUAL PAYMENTS. Punctually pay all principal, interest,
fees or other liabilities due under any of the Loan Documents at the times and
place and in the manner specified therein.

     SECTION 5.2.   ACCOUNTING RECORDS. Maintain adequate books and records in
accordance with generally accepted accounting principles consistently applied,
and permit any representative of Bank, at any reasonable time, to inspect, audit
and examine such books and records, to make copies of the same, and to inspect
the properties of Borrower.

                                       7
<PAGE>

     SECTION 5.3.   FINANCIAL STATEMENTS. Provide to Bank all of the following,
in form and detail satisfactory to Bank:

     (a)  not later than 90 days after and as of the end of each fiscal year,
Borrower's 10K report filed with the Securities Exchange Commission with respect
to such fiscal year;

     (b)  not later than 45 days after and as of the end of each quarter,
Borrower's 10Q report filed with the Securities Exchange Commission with respect
to such fiscal quarter;

     (c)  not later that 10 days after filing, a copy of any other report or
document filed with the Securities Exchange Commission.

     (d)  not later than 30 days after each fiscal year, projections, prepared
by Borrower, for the fiscal year then commencing;

     (e)  contemporaneously with each annual and quarterly 10K and 10Q report
required hereby, a certificate of the president or chief financial officer of
Borrower that said reports are accurate and that there exists no Event of
Default nor any condition, act or event which with the giving of notice or the
passage of time or both would constitute an Event of Default;

     (f)  from time to time such other information as Bank may reasonably
request.

     SECTION 5.4.   COMPLIANCE. Preserve and maintain all licenses, permits,
governmental approvals, rights, privileges and franchises necessary for the
conduct of its business; and comply with the provisions of all documents
pursuant to which Borrower is organized and/or which govern Borrower's continued
existence and with the requirements of all laws, rules, regulations and orders
of any governmental authority applicable to Borrower and/or its business.

     SECTION 5.5.   INSURANCE. Maintain and keep in force insurance of the types
and in amounts customarily carried in lines of business similar to that of
Borrower, including but not limited to fire, extended coverage, public
liability, flood, property damage and workers' compensation, with all such
insurance carried with companies and in amounts reasonably satisfactory to Bank,
and deliver to Bank from time to time at Bank's request schedules setting forth
all insurance then in effect.

     SECTION 5.6.   FACILITIES. Keep all properties useful or necessary to
Borrower's business in good repair and condition, and from time to time make
necessary repairs, renewals and replacements thereto so that such properties
shall be fully and efficiently preserved and maintained.

     SECTION 5.7.   TAXES AND OTHER LIABILITIES. Pay and discharge when due any
and all indebtedness, obligations, assessments and taxes, both real or personal,
including without limitation federal and state income taxes and state and local
property taxes and assessments, except such (a) as Borrower may in good faith
contest or as to which a bona fide dispute may arise, and (b) for which Borrower
has made provision, to Bank's satisfaction, for eventual payment thereof in the
event Borrower is obligated to make such payment.

                                       8
<PAGE>

     SECTION 5.8.   LITIGATION. Promptly give notice in writing to Bank of any
litigation pending or threatened against Borrower which could be reasonably
likely to have a material adverse effect on Borrower.

     SECTION 5.9.   FINANCIAL CONDITION. Maintain Borrower's consolidated
financial condition as follows using generally accepted accounting principles
consistently applied and used consistently with prior practices (except to the
extent modified by the definitions herein):

     (a)  Tangible Net Worth, determined as of each fiscal quarter end, not less
than $16,000,000.00, increasing, on a cumulative basis as of the end of each
fiscal quarter (commencing with FQE September 30, 2005), by an amount equal to
50% of Borrower's net income in such fiscal quarter, with no deduction for
losses, with "Tangible Net Worth" defined as the aggregate of total
stockholders' equity plus subordinated debt less any intangible assets.

     (b)  Net income after taxes not less than $650,000.00 on a quarterly basis,
determined as of each fiscal quarter end in fiscal year 2005, and thereafter not
less than $700,000.00 on a quarterly basis, determined as of each fiscal quarter
end.

     SECTION 5.10.  NOTICE TO BANK. Promptly (but in no event more than five (5)
days after the occurrence of each such event or matter) give written notice to
Bank in reasonable detail of: (a) the occurrence of any Event of Default, or any
condition, event or act which with the giving of notice or the passage of time
or both would constitute an Event of Default; (b) any change in the name or the
organizational structure of Borrower; (c) the occurrence and nature of any
Reportable Event or Prohibited Transaction, each as defined in ERISA, or any
funding deficiency with respect to any Plan; or (d) any termination or
cancellation of any insurance policy which Borrower is required to maintain, or
any uninsured or partially uninsured loss through liability or property damage,
or through fire, theft or any other cause affecting Borrower's property.

                                   ARTICLE VI
                               NEGATIVE COVENANTS

     Borrower further covenants that so long as Bank remains committed to extend
credit to Borrower pursuant hereto, or any liabilities (whether direct or
contingent, liquidated or unliquidated) of Borrower to Bank under any of the
Loan Documents remain outstanding, and until payment in full of all obligations
of Borrower subject hereto, Borrower will not without Bank's prior written
consent:

     SECTION 6.1.   USE OF FUNDS. Use any of the proceeds of any credit extended
hereunder except for the purposes stated in Article I hereof.

     SECTION 6.2.   CAPITAL EXPENDITURES. Make any additional investment in
fixed assets in any fiscal year in excess of $4,000,000.00.

     SECTION 6.3.   LEASE EXPENDITURES. Incur operating lease expense in any
fiscal year in excess of $1,000,000.00.

     SECTION 6.4.   OTHER INDEBTEDNESS. Create, incur, assume or permit to exist
any indebtedness or liabilities resulting from borrowings, loans or advances,
whether secured or unsecured, matured or unmatured, liquidated or unliquidated,
joint or several, except (a) the

                                       9
<PAGE>

liabilities of Borrower to Bank, (b) any other liabilities of Borrower existing
as of, and disclosed to Bank prior to, the date hereof, (c) a real estate loan
not to exceed $2,880,000.00 and any refinancing or extension thereof secured by
the "Spin Forge" real property located at 1700 E. Grand Avenue, El Segundo,
California, and (d) additional liabilities not to exceed an aggregate
outstanding principal balance of $1,000,000.00.

     SECTION 6.5.   MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Merge into or
consolidate with any other entity; make any substantial change in the nature of
Borrower's business as conducted as of the date hereof; acquire all or
substantially all of the assets of any other entity; nor sell, lease, transfer
or otherwise dispose of all or a substantial or material portion of Borrower's
assets except in the ordinary course of its business.

     SECTION 6.6.   GUARANTIES. Guarantee or become liable in any way as surety,
endorser (other than as endorser of negotiable instruments for deposit or
collection in the ordinary course of business), accommodation endorser or
otherwise for, nor pledge or hypothecate any assets of Borrower as security for,
any liabilities or obligations of any other person or entity, except any of the
foregoing in favor of Bank.

     SECTION 6.7.   LOANS, ADVANCES, INVESTMENTS. Make any loans or advances to
or investments in any person or entity, except any of the foregoing existing as
of, and disclosed to Bank prior to, the date hereof, and loans and advances to
employees in the ordinary course of business not to exceed an aggregate amount
of $100,000.00 outstanding at any time (inclusive of any such existing loans and
advances).

     SECTION 6.8.   PLEDGE OF ASSETS. Mortgage, pledge, grant or permit to exist
a security interest in, or lien upon, all or any portion of Borrower's assets
now owned or hereafter acquired, except (a) any of the foregoing in favor of
Bank or which is existing as of, and disclosed to Bank in writing prior to, the
date hereof, (b) security interests in equipment owned by Borrower as of the
date of this Agreement, (c) purchase money security interests in equipment,
subject to the restrictions on indebtedness set forth in Section 6.4, (d) liens
arising by operation of law in the ordinary course of business or liens for
unpaid taxes, mechanics' liens, materialmen or workmens' liens payment for which
is not yet due or is being contested in good faith, and (e) a lien on the real
estate described in Section 6.4(c) to secure the indebtedness described therein.

                                   ARTICLE VII
                                EVENTS OF DEFAULT

     SECTION 7.1.   The occurrence of any of the following shall constitute an
"Event of Default" under this Agreement:

     (a)  Borrower shall fail to pay when due any principal, or, within 5
calendar days of the applicable due date, any interest, fees or other amounts,
payable under any of the Loan Documents.

     (b)  Any financial statement or certificate furnished to Bank in connection
with, or any representation or warranty made by Borrower or any other party
under this Agreement or any other Loan Document shall prove to be incorrect,
false or misleading in any material respect when furnished or made.

                                       10
<PAGE>

     (c)  Any default in the performance of or compliance with any obligation,
agreement or other provision contained herein or in any other Loan Document
(other than those referred to in subsections (a) and (b) above), and with
respect to any such default which by its nature can be cured, such default shall
continue for a period of twenty (20) days from its occurrence.

     (d)  Any default in the payment or performance of any obligation, or any
defined event of default, under the terms of any contract or instrument (other
than any of the Loan Documents) pursuant to which Borrower or any guarantor
(with each such guarantor referred to as a "Third Party Obligor") has incurred
any debt or other liability to any person or entity, including Bank, and, if the
debt is owed to a party other than Bank, the amount thereof exceeds $250,000.00
and the default is not cured within any applicable cure period, if any, provided
therefor in the documents governing such debt. As of the date hereof, there
exist no Third Party Obligors.

     (e)  The filing of a notice of judgment lien against Borrower or any Third
Party Obligor; or the recording of any abstract of judgment against Borrower or
any Third Party Obligor in any county in which Borrower or such Third Party
Obligor has an interest in real property; or the service of a notice of levy
and/or of a writ of attachment or execution, or other like process, against the
assets of Borrower or any Third Party Obligor; or the entry of a judgment
against Borrower or any Third Party Obligor, and with respect to each of the
foregoing, the amount claimed exceeds $250,000.00.

     (f)  Borrower or any Third Party Obligor shall become insolvent, or shall
suffer or consent to or apply for the appointment of a receiver, trustee,
custodian or liquidator of itself or any of its property, or shall generally
fail to pay its debts as they become due, or shall make a general assignment for
the benefit of creditors; Borrower or any Third Party Obligor shall file a
voluntary petition in bankruptcy, or seeking reorganization, in order to effect
a plan or other arrangement with creditors or any other relief under the
Bankruptcy Reform Act, Title 11 of the United States Code, as amended or
recodified from time to time ("Bankruptcy Code"), or under any state or federal
law granting relief to debtors, whether now or hereafter in effect; or any
involuntary petition or proceeding pursuant to the Bankruptcy Code or any other
applicable state or federal law relating to bankruptcy, reorganization or other
relief for debtors is filed or commenced against Borrower or any Third Party
Obligor, or Borrower or any Third Party Obligor shall file an answer admitting
the jurisdiction of the court and the material allegations of any involuntary
petition; or Borrower or any Third Party Obligor shall be adjudicated a
bankrupt, or an order for relief shall be entered against Borrower or any Third
Party Obligor by any court of competent jurisdiction under the Bankruptcy Code
or any other applicable state or federal law relating to bankruptcy,
reorganization or other relief for debtors.

     (g)  The death or incapacity of any individual Third Party Obligor. The
dissolution or liquidation of Borrower or Third Party Obligor which in not an
individual, or Borrower or any such Third Party Obligor or any of its directors
or stockholders or members shall take action seeking to effect the dissolution
or liquidation of Borrower or such Third Party Obligor.

     (i)  Groupe SNPE shall, directly or indirectly, own or control less than
25% of the outstanding voting equity interests in Borrower.

     SECTION 7.2.   REMEDIES. Upon the occurrence of any Event of Default:
(a) all indebtedness of Borrower under each of the Loan Documents, any term
thereof to the contrary notwithstanding, shall at Bank's option and without
notice become immediately due and payable without presentment, demand, protest
or notice of dishonor, all of which are hereby expressly waived by each
Borrower; (b) the obligation, if any, of Bank to extend any further credit under

                                       11
<PAGE>

any of the Loan Documents shall immediately cease and terminate; and (c) Bank
shall have all rights, powers and remedies available under each of the Loan
Documents, or accorded by law, including without limitation the right to resort
to any or all security for any credit subject hereto and to exercise any or all
of the rights of a beneficiary or secured party pursuant to applicable law. All
rights, powers and remedies of Bank may be exercised at any time by Bank and
from time to time after the occurrence of an Event of Default, are cumulative
and not exclusive, and shall be in addition to any other rights, powers or
remedies provided by law or equity.

                                  ARTICLE VIII
                                  MISCELLANEOUS

     SECTION 8.1.   NO WAIVER. No delay, failure or discontinuance of Bank in
exercising any right, power or remedy under any of the Loan Documents shall
affect or operate as a waiver of such right, power or remedy; nor shall any
single or partial exercise of any such right, power or remedy preclude, waive or
otherwise affect any other or further exercise thereof or the exercise of any
other right, power or remedy. Any waiver, permit, consent or approval of any
kind by Bank of any breach of or default under any of the Loan Documents must be
in writing and shall be effective only to the extent set forth in such writing.

     SECTION 8.2.   NOTICES. All notices, requests and demands which any party
is required or may desire to give to any other party under any provision of this
Agreement must be in writing delivered to each party at the following address:

     BORROWER: DYNAMIC MATERIALS CORPORATION
               5404 Spine Road
               Boulder, CO 80301
               (Attention: Richard A. Santa or Chief Financial Officer)

     BANK:     WELLS FARGO BANK, NATIONAL ASSOCIATION
               Colorado RCBO
               1740 Broadway, 3rd Floor
               Denver, CO 80274

or to such other address as any party may designate by written notice to all
other parties. Each such notice, request and demand shall be deemed given or
made as follows: (a) if sent by hand delivery, upon delivery; (b) if sent by
mail, upon the earlier of the date of receipt or three (3) days after deposit in
the U.S. mail, first class and postage prepaid; and (c) if sent by telecopy,
upon receipt.

     SECTION 8.3.   COSTS, EXPENSES AND ATTORNEYS' FEES. Borrower shall pay to
Bank immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys' fees (to include outside
counsel fees and all allocated costs of Bank's in-house counsel), expended or
incurred by Bank in connection with (a) the preparation of any amendments to and
waivers under this Agreement or the other Loan Documents, (b) the enforcement of
Bank's rights and/or the collection of any amounts which become due to Bank
under any of the Loan Documents, and (c) the prosecution or defense of any
action in any way related to any of the Loan Documents, including without
limitation, any action for declaratory relief, whether incurred at the trial or
appellate level, in an arbitration proceeding or otherwise, and including any of
the foregoing incurred in connection with any bankruptcy proceeding (including
without limitation, any adversary proceeding, contested matter

                                       12
<PAGE>

or motion brought by Bank or any other person) relating to any Borrower or any
other person or entity.

     SECTION 8.4.   SUCCESSORS, ASSIGNMENT. This Agreement shall be binding upon
and inure to the benefit of the heirs, executors, administrators, legal
representatives, successors and assigns of the parties; provided however, that
Borrower may not assign or transfer its interest hereunder without Bank's prior
written consent. Bank reserves the right to sell, assign, transfer, negotiate or
grant participations in all or any part of, or any interest in, Bank's rights
and benefits under each of the Loan Documents. In connection therewith, Bank may
disclose all documents and information which Bank now has or may hereafter
acquire relating to any credit subject hereto, Borrower or its business, or any
collateral required hereunder.

     SECTION 8.5.   ENTIRE AGREEMENT; AMENDMENT. This Agreement and the other
Loan Documents constitute the entire agreement between Borrower and Bank with
respect to each credit subject hereto and supersede all prior negotiations,
communications, discussions and correspondence concerning the subject matter
hereof. This Agreement may be amended or modified only in writing signed by each
party hereto.

     SECTION 7.6.   NO THIRD PARTY BENEFICIARIES. This Agreement is made and
entered into for the sole protection and benefit of the parties hereto and their
respective permitted successors and assigns, and no other person or entity shall
be a third party beneficiary of, or have any direct or indirect cause of action
or claim in connection with, this Agreement or any other of the Loan Documents
to which it is not a party.

     SECTION 8.7.   TIME. Time is of the essence of each and every provision of
this Agreement and each other of the Loan Documents.

     SECTION 8.8.   SEVERABILITY OF PROVISIONS. If any provision of this
Agreement shall be prohibited by or invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or any remaining provisions
of this Agreement.

     SECTION 8.9.   COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which when executed and delivered shall be deemed to be
an original, and all of which when taken together shall constitute one and the
same Agreement.

     SECTION 8.10.  GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Colorado.

     SECTION 8.11.  ARBITRATION.

     (a)  Arbitration. The parties hereto agree, upon demand by any party, to
submit to binding arbitration all claims, disputes and controversies between or
among them (and their respective employees, officers, directors, attorneys, and
other agents), whether in tort, contract or otherwise arising out of or relating
to in any way (i) the loan and related Loan Documents which are the subject of
this Agreement and its negotiation, execution, collateralization,
administration, repayment, modification, extension, substitution, formation,
inducement, enforcement, default or termination; or (ii) requests for additional
credit.

     (b)  Governing Rules. Any arbitration proceeding will (i) proceed in a
location in Colorado selected by the American Arbitration Association ("AAA");
(ii) be governed by the

                                       13
<PAGE>

Federal Arbitration Act (Title 9 of the United States Code), notwithstanding any
conflicting choice of law provision in any of the documents between the parties;
and (iii) be conducted by the AAA, or such other administrator as the parties
shall mutually agree upon, in accordance with the AAA's commercial dispute
resolution procedures, unless the claim or counterclaim is at least
$1,000,000.00 exclusive of claimed interest, arbitration fees and costs in which
case the arbitration shall be conducted in accordance with the AAA's optional
procedures for large, complex commercial disputes (the commercial dispute
resolution procedures or the optional procedures for large, complex commercial
disputes to be referred to, as applicable, as the "Rules"). If there is any
inconsistency between the terms hereof and the Rules, the terms and procedures
set forth herein shall control. Any party who fails or refuses to submit to
arbitration following a demand by any other party shall bear all costs and
expenses incurred by such other party in compelling arbitration of any dispute.
Nothing contained herein shall be deemed to be a waiver by any party that is a
bank of the protections afforded to it under 12 U.S.C. ss.91 or any similar
applicable state law.

     (c)  No Waiver of Provisional Remedies, Self-Help and Foreclosure. The
arbitration requirement does not limit the right of any party to (i) foreclose
against real or personal property collateral; (ii) exercise self-help remedies
relating to collateral or proceeds of collateral such as setoff or repossession;
or (iii) obtain provisional or ancillary remedies such as replevin, injunctive
relief, attachment or the appointment of a receiver, before during or after the
pendency of any arbitration proceeding. This exclusion does not constitute a
waiver of the right or obligation of any party to submit any dispute to
arbitration or reference hereunder, including those arising from the exercise of
the actions detailed in sections (i), (ii) and (iii) of this paragraph.

     (d)  Arbitrator Qualifications and Powers. Any arbitration proceeding in
which the amount in controversy is $5,000,000.00 or less will be decided by a
single arbitrator selected according to the Rules, and who shall not render an
award of greater than $5,000,000.00. Any dispute in which the amount in
controversy exceeds $5,000,000.00 shall be decided by majority vote of a panel
of three arbitrators; provided however, that all three arbitrators must actively
participate in all hearings and deliberations. The arbitrator will be a neutral
attorney licensed in the State of Colorado or a neutral retired judge of the
state or federal judiciary of Colorado, in either case with a minimum of ten
years experience in the substantive law applicable to the subject matter of the
dispute to be arbitrated. The arbitrator will determine whether or not an issue
is arbitratable and will give effect to the statutes of limitation in
determining any claim. In any arbitration proceeding the arbitrator will decide
(by documents only or with a hearing at the arbitrator's discretion) any
pre-hearing motions which are similar to motions to dismiss for failure to state
a claim or motions for summary adjudication. The arbitrator shall resolve all
disputes in accordance with the substantive law of Colorado and may grant any
remedy or relief that a court of such state could order or grant within the
scope hereof and such ancillary relief as is necessary to make effective any
award. The arbitrator shall also have the power to award recovery of all costs
and fees, to impose sanctions and to take such other action as the arbitrator
deems necessary to the same extent a judge could pursuant to the Federal Rules
of Civil Procedure, the Colorado Rules of Civil Procedure or other applicable
law. Judgment upon the award rendered by the arbitrator may be entered in any
court having jurisdiction. The institution and maintenance of an action for
judicial relief or pursuit of a provisional or ancillary remedy shall not
constitute a waiver of the right of any party, including the plaintiff, to
submit the controversy or claim to arbitration if any other party contests such
action for judicial relief.

     (e)  Discovery. In any arbitration proceeding discovery will be permitted
in accordance with the Rules. All discovery shall be expressly limited to
matters directly relevant to the dispute

                                       14
<PAGE>

being arbitrated and must be completed no later than 20 days before the hearing
date and within 180 days of the filing of the dispute with the AAA. Any requests
for an extension of the discovery periods, or any discovery disputes, will be
subject to final determination by the arbitrator upon a showing that the request
for discovery is essential for the party's presentation and that no alternative
means for obtaining information is available.

     (f)  Class Proceedings and Consolidations. The resolution of any dispute
arising pursuant to the terms of this Agreement shall be determined by a
separate arbitration proceeding and such dispute shall not be consolidated with
other disputes or included in any class proceeding.

     (g)  Payment Of Arbitration Costs And Fees. The arbitrator shall award all
costs and expenses of the arbitration proceeding.

     (h)  Miscellaneous. To the maximum extent practicable, the AAA, the
arbitrators and the parties shall take all action required to conclude any
arbitration proceeding within 180 days of the filing of the dispute with the
AAA. No arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by
a party required in the ordinary course of its business or by applicable law or
regulation. If more than one agreement for arbitration by or between the parties
potentially applies to a dispute, the arbitration provision most directly
related to the Loan Documents or the subject matter of the dispute shall
control. This arbitration provision shall survive termination, amendment or
expiration of any of the Loan Documents or any relationship between the parties.

     SECTION 8.12.  JUDGMENT CURRENCY.

     (a)  Conversion Rate. If, for the purposes of obtaining judgment in any
court, it is necessary to convert a sum due hereunder in any currency (the
"Original Currency") into another currency (the "Other Currency"), the parties
hereto agree, to the fullest extent permitted by law, that the rate of exchange
used shall be that at which in accordance with normal banking procedures the
Bank could purchase the Original Currency with the Other Currency on the
Business Day preceding that on which final judgment is given.

     (b)  Discharge of Judgment. The obligations of the Borrower in respect of
any sum due from it to the Bank hereunder shall, notwithstanding any judgment in
such Other Currency, be discharged only to the extent that, on the Business Day
following receipt by the Bank of any sum adjudged to be so due in the Other
Currency, the Bank may in accordance with normal banking procedures purchase the
Original Currency with the Other Currency; if the Original Currency so purchased
is less than the sum originally due to the Bank in the Original Currency, the
Borrower agrees, as a separate obligation and notwithstanding any such judgment,
to indemnify the Bank against such loss, and if the amount of the Original
Currency so purchased exceeds the sum originally due to the Bank in the Original
Currency, the Bank shall remit such excess to the Borrower.

                                       15
<PAGE>

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

                                            WELLS FARGO BANK,
DYNAMIC MATERIALS CORPORATION                NATIONAL ASSOCIATION

By:  /s/ Richard A. Santa                   By:  /s/ Marc Rosenberg
     --------------------------------            ----------------------------
     Richard A. Santa, Vice President            Marc Rosenberg, Relationship
     & CFO                                       Manager

                                       16
<PAGE>

                                    EXHIBIT A

                              FORM OF CREDIT NOTICE
                           (Euro-denominated Advances)
                                                        Date: ___________, _____

To:  Wells Fargo Bank, N.A.

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement, dated as of _____________,
2005 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the "Agreement;" the terms defined therein being used
herein as therein defined) between DYNAMIC MATERIALS CORPORATION ("Borrower")
and WELLS FARGO BANK, N.A. ("Bank").

The undersigned hereby requests (select one):

[ ]  A borrowing of a Euro-denominated Advance

[ ]  A continuation of a Euro-denominated Advance

1.   On _________________________________________ (a Business Day).
2.   In the amount of ___________________________; denominated in Euro
3.   With a Fixed Rate Term ____ months (1, 2 or 3).

The undersigned hereby certifies that the following statements are true on the
date hereof, and will be true on the above date, before and after giving effect
to the advance (or continuation, as the case may be) requested above:

(a)  The representations and warranties made by the Borrower in the Agreement,
or which are contained in any certificate, document or financial or other
statement furnished at any time under or in connection therewith, are and will
be correct on and as of the date of the advance requested above, except to the
extent that such representations and warranties specifically refer to any
earlier date; and

(b)  no Event of Default has occurred and is continuing on the date hereof or
after giving effect to the advance requested above.

IN WITNESS WHEREOF, the undersigned have executed this Credit Notice as of the
date first written above.

THE "BORROWER"

DYNAMIC MATERIALS CORPORATION

By: ________________________________
Title: _______________________________

                                       17

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