Document:

SECOND AMENDMENT TO DEFERRAL AND WAIVER AGREEMENT

        THIS SECOND AMENDMENT TO DEFERRAL AND WAIVER AGREEMENT is made and
entered into this 27th day of MARCH, 2000, by and between KEYBANK NATIONAL
ASSOCIATION, a national banking association ("LENDER") and DYNAMIC MATERIALS
CORPORATION, a Delaware corporation (the "COMPANY").

                                    RECITALS

        A.  On December 31, 1998, the Company and Lender entered into a First
Amendment to Amended and Restated Credit Facility and Security Agreement ("FIRST
AMENDMENT"), which amended the terms of a November 30, 1998 Amended and Restated
Credit Facility and Security Agreement (the First Amendment and the Amended and
Restated Credit Facility and Security Agreement shall be hereinafter
collectively referred to as the "CREDIT AGREEMENT"). Pursuant to the terms of
the First Amendment, Lender agreed to provide credit facilities to the Company
in an aggregate principal amount of up to $14,000,000, consisting of an
Acquisition Line with a maximum credit limit of $5,700,000, an Accommodation
Line with a maximum credit limit of $2,300,000, and a Working Capital Credit
Line with a maximum credit limit of $6,000,000.

        B.  By letter dated July 21, 1999, Lender waived for the period ended
September 30, 1999 certain of the Company's covenant defaults under the Credit
Agreement and under that certain Reimbursement Agreement between the parties
dated as of September 1, 1998, executed in connection with Lender's issuance of
a letter of credit to support principal and interest payments under certain
industrial development revenue bonds (the Credit Agreement and the Reimbursement
Agreement are sometimes hereinafter collectively referred to as the "LOAN
DOCUMENTS"). In addition, by letter dated September 30, 1999, Lender deferred
until October 15, 1999 certain principal payments that were required to be made
by the Company on September 30, 1999.

        C.  On or about October 15, 1999, Company and Lender executed a Deferral
and Waiver Agreement, pursuant to which Lender agreed, conditioned upon certain
undertakings and covenants of Company, to forbear from declaring any further
defaults under the Loan Documents, to accelerate amounts due thereunder, or to
otherwise exercise its rights and remedies under the Loan Documents for the
period from October 16, 1999 through December 30, 1999 (the "INITIAL DEFERRAL
PERIOD").

        D.  On or about December 30, 1999, Company and Lender executed a First
Amendment to Deferral and Waiver Agreement pursuant to which Lender agreed,
conditioned upon certain under takings and covenants of Company, to forbear from
declaring any further defaults under the loan documents, to accelerate amounts
due thereunder, or to otherwise exercise its rights and remedies under the loan
documents for the period from December 31, 1999 to March 30, 2000 (the "SECOND
DEFERRAL PERIOD").

        E.  Company has requested that Lender enter into this Second Amendment
to Deferral and Waiver Agreement in order to give the Company additional time to
close that certain Stock Purchase Agreement dated January 20, 2000 between
Company and SNPE, Inc.

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        F.  Lender is willing to enter into this Second Amendment to Deferral
and Waiver Agreement, but only upon the terms and conditions set forth herein.

        NOW, THEREFORE, in consideration of the above Recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
mutually acknowledged, the parties do hereby agree as follows:

        1.  AFFIRMATION OF RECITALS.  The Recitals set forth above are true
and correct and are incorporated herein by this reference.

        2.  ACKNOWLEDGMENT OF INDEBTEDNESS.  Company acknowledges that as of
the date hereof, the following loan balances are outstanding from Company to
Lender:

            Principal amount outstanding
               under Acquisition Line                         $4,930,000.00

            Principal amount outstanding
               under Accommodation Line                       $2,300,000.00

            Of the foregoing amounts, Company further acknowledges that the
following amounts are due and owing to Lender as of the date hereof (the
"Current Principal Loan Payments"):

            Current Principal Loan Payment
               due under Acquisition Line                     $777,272.73

            Current Principal Loan Payment
               due under Accommodation Line                   $690,000.00

        3.  LENDER'S FORBEARANCE. Provided that Company is not in default under
the terms of this Second Amendment to Deferral and Waiver Agreement, Lender
agrees not to declare any further defaults under the Loan Documents, to
accelerate the amounts due under the Loan Documents, or to otherwise exercise
its other rights and remedies under the Loan Documents for the period from March
30, 2000, to May 15, 2000 (the "SECOND AMENDED DEFERRAL PERIOD"). The Current
Principal Loan Payments referred to in paragraph 2 above shall be due and
payable on the earlier of (i) May 15, 2000 and (ii) the closing of the Stock
Purchase Agreement with SNPE, Inc. referred to in recital E above.

        4.  INTEREST RATE ON ACCOMMODATION LINE. From and after the date hereof,
interest on the unpaid principal due with respect to the Accommodation Line
shall accrue and be payable at the Prime Rate (as defined in the First
Amendment) PLUS two hundred twenty five (225) basis points.

        5.  INTEREST RATE ON ACQUISITION LINE AND WORKING CAPITAL CREDIT LINE.
From and after the date hereof, interest on the unpaid principal due with
respect to the Acquisition Line and the Working Capital Credit Line shall accrue
and be payable at the Prime Rate (as defined in the First Amendment) PLUS one
hundred (100) basis points.

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        6.  WAIVER OF COVENANT VIOLATIONS.  Provided that the Company is not
in default hereunder, Lender agrees, during the Second Amended Deferral Period,
to waive the Company's Covenant Defaults under the Loan Documents.

        7.  NO DEFENSES, WAIVERS. As of the date of this Second Amendment to
Deferral and Waiver Agreement, the Principal Loan Payments set forth in
paragraph 2 above are due and payable by the Company to Lender, and the Company
acknowledges that it has no defense, offset, or counterclaims to any of
Company's obligations under the Loan Documents. To the extent that any such
defenses, claims or offsets exist as of the date hereof, they are hereby waived
and released in consideration of Lender's execution of this Second Amendment to
Deferral and Waiver Agreement. Company has duly authorized, executed and
delivered this Second Amendment to Deferral and Waiver Agreement to Lender, and
the Company acknowledges that the Loan Documents are valid and enforceable in
accordance with their terms against the Company.

        8.  DEFAULTS.  The occurrence of any one or more of the following shall
constitute a default under this Second Amendment to Deferral and Waiver
Agreement:

            (i) the untruth of any representation or warranty contained in
this Second Amendment to Deferral and Waiver Agreement, or the existence of a
misrepresentation of fact or fraud contained in any document or information
heretofore or hereafter submitted or communicated to Lender in support of this
Second Amendment to Deferral and Waiver Agreement;

            (ii) breach or violation of any terms, covenant or condition
contained in this Second Amendment to Deferral and Waiver Agreement;

            (iii) any other default (other than non-payment of principal
acknowledged in paragraph 2 above and the Company's Covenant Defaults referred
to in paragraph 7 above) under any of the Loan Documents;

            (iv) any variation by Two Hundred and Fifty Thousand Dollars
($250,000) or more (on a cumulative basis) between (i) the proforma cash flow
summary (September 21, 1999 update) and monthly income statement summary
(September 21, 1999 update) which have been submitted by the Company to Lender
in accordance with the Loan Documents and (ii) the actual cash flow and
operating income of the company calculated and submitted to Lender within twenty
(20) days following the end of each calender month during the Second Amended
deferral Period; or

            (v) termination of the January 20, 2000 Stock Purchase Agreement
between the Company and SNPE, Inc.

        9.  TERMINATION; REMEDIES.  Immediately following the occurrence of any
default under this Second Amendment to Deferral and Waiver Agreement, Lender
may, at its option, (i) terminate its obligations to waive Covenant Defaults and
defer payments as contained herein without notice or demand to the Company and
(ii) pursue any other remedies available to it under the Loan Documents

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or otherwise. If not sooner terminated, Lender's obligation to waive Covenant
Defaults and defer payments as set forth herein shall terminate automatically
and without notice to or action by Company on May 15, 2000.

        10. NO WAIVER OF REMEDIES. Lender expressly reserves any and all rights
and remedies available to it under this Second Amendment to Deferral and Waiver
Agreement and the Loan Documents, at law or in equity in the event the Company
defaults under this Second Amendment to Deferral and Waiver Agreement. No
failure to exercise, or delay by Lender in exercising, any right, power or
privilege hereunder shall preclude any other or further exercise thereof, or the
exercise of any other right, power or privilege. The rights and remedies
provided in this Second Amendment to Deferral and Waiver Agreement and the Loan
Documents are cumulative and not exclusive of each other or of any right or
remedy provided by law or in equity. Except as expressly provided in the Loan
Documents, no notice to or demand upon the Company in any instance shall, in
itself, entitle the Company to any other or further notice or demand in similar
or other circumstances or constitute a waiver of the right of Lender to any
other or further action in any circumstances without notice or demand.

        11. EXPENSES; ATTORNEYS' FEES. In addition to all other amounts that are
now due or may hereafter become due to Lender under the Loan Documents or this
Second Amendment to Deferral and Waiver Agreement, the Company shall reimburse
Lender for all amounts reasonably incurred by or on behalf of Lender for
attorneys' fees, recording expenses, title insurance fees, UCC searches, and all
other reasonable expenses incurred by or on behalf of Lender by reason of the
matters specified herein and for the preparation of this Second Amendment to
Deferral and Waiver Agreement and all other documents necessary and required to
effectuate the provisions hereof including, without limitation, all reasonable
costs and expenses with respect to the Company's compliance with the terms and
conditions hereof and Lender's enforcement thereof. In the event any dispute
shall arise concerning the subject matter of this Second Amendment to Deferral
and Waiver Agreement, Lender shall be entitled to recover from the Company its
reasonable attorneys' fees and costs incurred in the enforcement of any of the
provisions set forth herein. The rights and remedies of Lender contained in this
paragraph shall be in addition to, and not in lieu of, the rights and remedies
contained in the Loan Documents and as provided by law.

        12. GOVERNING LAW.  This Second Amendment to Deferral and Waiver
Agreement shall be construed in accordance with the laws of the State of
Colorado, without regard to its conflict of laws principles.

        13. CONSTRUCTION. This Second Amendment to Deferral and Waiver Agreement
shall not be construed more strictly against Lender merely by virtue of the fact
that the same has been prepared by Lender or its counsel, it being recognized
that the Company and Lender have contributed substantially and materially to the
preparation of this Second Amendment to Deferral and Waiver Agreement, and the
Company and Lender each acknowledge and waive any claim contesting the existence
and the adequacy of the consideration given by any of the other parties hereto
in entering into this Second Amendment to Deferral and Waiver Agreement.

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        14. ENTIRE AGREEMENT. Company and Lender each acknowledge that there are
no other agreements or representations, either oral or written, express or
implied, not embodied in this Second Amendment to Deferral and Waiver Agreement
and the Loan Documents, which, together, represent a complete integration of all
prior and contemporaneous agreements and understandings of the Company and
Lender, and the provisions of the Loan Documents are hereby ratified and
confirmed.

        15. BENEFIT.  Except as provided herein, this Second Amendment to
Deferral and Waiver Agreement shall be binding upon and shall inure to the
benefit of the Company and Lender, and their respective successors and assigns.

        16. RATIFICATION.  The Loan Documents shall remain in full force and
effect, and all of the terms and provisions of the Loan Documents, as herein
modified, are hereby ratified and reaffirmed.

        17. CONSENT TO AGREEMENT. Company acknowledges that it has thoroughly
read and reviewed the terms and provisions of this Second Amendment to Deferral
and Waiver Agreement and is familiar with the same, that the terms and
provisions contained herein are clearly understood by it and have been fully and
unconditionally consented to by it and that the Company has had the full benefit
and advice of counsel of its own selection, or the opportunity to obtain the
benefit and advice of counsel of its own selection, in regard to understanding
the terms, meaning and effect of this Second Amendment to Deferral and Waiver
Agreement and that this Second Amendment to Deferral and Waiver Agreement has
been entered into by the Company freely, voluntarily, with full knowledge, and
without duress, and that in executing this Second Amendment to Deferral and
Waiver Agreement, the Company is relying on no other representations either
written or oral, express or implied, made to the Company by any other party
hereto, and that the consideration received by the Company hereunder has been
actual and adequate.

        18. RELEASE. As additional consideration for Lender entering into this
Second Amendment to Deferral and Waiver Agreement, the Company hereby fully and
unconditionally releases and forever discharges Lender, its agents, servants,
employees, directors, officers, attorneys, branches, affiliates, subsidiaries,
successors and assigns and all persons, firms, corporations, and organizations
acting in its behalf of and from all damage, loss, claims, demands, liabilities,
obligations, actions and causes of action whatsoever which the Company may now
have or claim to have against Lender as of the date of this Second Amendment to
Deferral and Waiver Agreement, whether presently known or unknown, and of every
nature and extent whatsoever on account of or in any way affecting, concerning,
arising out of or founded upon the Loan Documents including, but not limited to,
all such loss or damage of any kind heretofore sustained, or that may arise as a
consequence of the dealings between the parties up to and including the date of
this Second Amendment to Deferral and Waiver Agreement.

        19. COUNTERPARTS. It is understood and agreed that this Second Amendment
to Deferral and Waiver Agreement may be executed in several counterparts, each
of which shall, for all purposes, be deemed an original and all of such
counterparts, taken together, shall constitute one and the same Second Amendment
to Deferral and Waiver Agreement, even though all of the parties hereto may

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<PAGE>

not have executed the same counterpart of this Second Amendment to Deferral and
Waiver Agreement.

        20. LENDER NOT LIABLE FOR EXPENSES. Nothing in this Second Amendment to
Deferral and Waiver Agreement shall be intended or construed to hold Lender
liable or responsible for any expenses, disbursement, liability or obligation of
any kind or nature whatsoever including, but not limited to, wages, salaries,
payroll taxes, deposits, withholding, benefits or other amounts payable to or on
behalf of the Company.

        21. COMPANY REMAINS IN CONTROL.  Company and Lender agree that the
Company remains in control of the Company, that it determines the business plan
for, and employment, management and operating directions and decisions for
Company.

        22. MISCELLANEOUS. This Second Amendment to Deferral and Waiver
Agreement is made for the sole protection of Lender and the Company and their
respective successors and assigns. No other person shall have any right
whatsoever hereunder. Notices to parties hereunder may be given to them at the
addresses and in the manner provided in the Loan Documents. Time shall be of the
strictest essence in the performance of each and every one of the Company's
obligations hereunder. If any provision of this Second Amendment to Deferral and
Waiver Agreement is held to be invalid or unenforceable, the remaining
provisions shall remain in effect without impairment.

        IN WITNESS WHEREOF, this Second Amendment to Deferral and Waiver
Agreement has been executed by the parties hereto in manner and form sufficient
to bind them, as of the day and year first above written.

                                    KEYBANK NATIONAL ASSOCIATION
                                    a national banking association

                                    By:   /s/ H. Daniel Willetts
                                       -----------------------------------------
                                    Name: H. Daniel Willetts
                                    Its:  Vice President

                                    DYNAMIC MATERIALS CORPORATION,
                                    a Delaware corporation

                                    By:   /s/ Joseph P. Allwein
                                       -----------------------------------------
                                    Name: Joseph P. Allwein
                                    Its:  President and CEO

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<PAGE>

STATE OF COLORADO            )
                             ) ss.
COUNTY OF _________________  )

        The foregoing was acknowledged before me this ____ day of _____________,
1999, by _________________, as _________________________ of KEYBANK NATIONAL
ASSOCIATION, a national banking association.

        WITNESS my hand and official seal.

        My commission expires_________________________

                                    _______________________________________
                                    Notary Public

STATE OF COLORADO            )
                             ) ss.
COUNTY OF _________________  )

        The foregoing was acknowledged before me this ____ day of _____________,
1999, by _________________, as _________________________ of DYNAMIC MATERIALS
CORPORATION, a Delaware corporation.

        WITNESS my hand and official seal.

        My commission expires_________________________

                                    _______________________________________
                                    Notary Public

                                        7INDEMNIFICATION AGREEMENT

      Each of the following directors and officers of Dynamic Materials
Corporation (the "Corporation") has executed an indemnification agreement with
the Corporation in a form substantially similar to the form attached hereto:

      1.  Dean K. Allen, Director.
      2.  David E. Bartlett, Director.
      3.  Dr. George W. Morgenthaler, Director
      4.  Michael C. Franson, Director.
      5.  Joseph P. Allwein, Director, President and Chief Executive Officer.
      6.  Richard A. Santa, Vice President, Finance, Chief Financial Officer
          and Secretary.
      7.  Mark W. Jarman, Vice President of Corporate Development

<PAGE>

                            INDEMNIFICATION AGREEMENT

      THIS AGREEMENT is made and entered into as of this ___ day of _______,
____, by and between Dynamic Materials Corporation, a Delaware corporation (the
"CORPORATION"), and _______________ ("AGENT").

                                    RECITALS

      WHEREAS,  Agent  performs a valuable  service to the  Corporation in his
capacity as a _________________ of the Corporation;

      WHEREAS, the stockholders of the Corporation have adopted bylaws (the
"BYLAWS") providing for the indemnification of the directors, officers,
employees and other agents of the Corporation, including persons serving at the
request of the Corporation in such capacities with other corporations or
enterprises, as authorized by the Delaware General Corporation Law, as amended
(the "CODE");

      WHEREAS, the Bylaws and the Code, by their non-exclusive nature, permit
contracts between the Corporation and its agents, officers, employees and other
agents with respect to indemnification of such persons; and

      WHEREAS, in order to induce Agent to continue to serve as a
__________________ of the Corporation, the Corporation has determined and agreed
to enter into this Agreement with Agent.

      NOW, THEREFORE, in consideration of Agent's continued service as a
_____________________ after the date hereof, the parties hereto agree as
follows:

                                    AGREEMENT

      1.  SERVICES TO THE CORPORATION. Agent will serve, at the will of the
Corporation or under separate contract, if any such contract exists, as a
__________________________ of the Corporation or as a director, officer or other
fiduciary of an affiliate of the Corporation (including any employee benefit
plan of the Corporation) faithfully and to the best of his ability so long as he
is duly elected and qualified in accordance with the provisions of the Bylaws or
other applicable charter documents of the Corporation or such affiliate;
provided, however, that Agent may at any time and for any reason resign from
such position (subject to any contractual obligation that Agent may have assumed
apart from this Agreement) and that the Corporation or any affiliate shall have
no obligation under this Agreement to continue Agent in any such position.

      2.  INDEMNITY OF AGENT. The Corporation hereby agrees to hold harmless and
indemnify Agent to the fullest extent authorized or permitted by the provisions
of the

<PAGE>

Bylaws and the Code, as the same may be amended from time to time (but,
only to the extent that such amendment permits the Corporation to provide
broader indemnification rights than the Bylaws or the Code permitted prior to
adoption of such amendment).

      3.  ADDITIONAL  INDEMNITY.  In  addition to and not in  limitation  of
the  indemnification  otherwise  provided for herein,  and subject only to the
exclusions  set forth in  Section 4 hereof,  the  Corporation  hereby  further
agrees to hold harmless and indemnify Agent:

          (a) against any and all expenses (including attorneys' fees), witness
fees, damages, judgments, fines and amounts paid in settlement and any other
amounts that Agent becomes legally obligated to pay because of any claim or
claims made against or by him in connection with any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, arbitration,
administrative or investigative (including an action by or in the right of the
Corporation) to which Agent is, was or at any time becomes a party, or is
threatened to be made a party, by reason of the fact that Agent is, was or at
any time becomes a director, officer, employee or other agent of the
Corporation, or is or was serving or at any time serves at the request of the
Corporation as a director, officer, employee or other agent of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise; and

          (b) otherwise to the fullest extent as may be provided to Agent by
the Corporation under the non-exclusivity provisions of the Code and of the
Bylaws.

      4.  LIMITATIONS  ON  ADDITIONAL  INDEMNITY.  No indemnity  pursuant to
Section 3 hereof shall be paid by the Corporation:

          (a) on account of any claim against Agent for an accounting of profits
made from the purchase or sale by Agent of securities of the Corporation
pursuant to the provisions of Section 16(b) of the Securities Exchange Act of
1934 and amendments thereto or similar provisions of any federal, state or local
statutory law;

          (b) on account of Agent's conduct that was knowingly fraudulent or
deliberately dishonest or that constituted willful misconduct;

          (c) on account of Agent's conduct that constituted a breach of Agent's
duty of loyalty to the Corporation or resulted in any personal profit or
advantage to which Agent was not legally entitled;

          (d) for which payment is actually made to Agent under a valid and
collectible insurance policy or under a valid and enforceable indemnity clause,
bylaw or agreement, except in respect of any excess beyond payment under such
insurance, clause, bylaw or agreement;

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<PAGE>

          (e) if indemnification is not lawful (and, in this respect, both the
Corporation and the Agent have been advised that the Securities and Exchange
Commission believes that indemnification for liabilities arising under the
federal securities laws is against public policy and is, therefore,
unenforceable and that claims for indemnification should be submitted to
appropriate courts for adjudication); or

          (f) in connection with any proceeding (or part thereof) initiated by
Agent, or any proceeding by Agent against the Corporation or its directors,
officers, employees or other agents, unless (i) such indemnification is
expressly required to be made by law, (ii) the proceeding was authorized by the
Board of Directors of the Corporation, (iii) such indemnification is provided by
the Corporation, in its sole discretion, pursuant to the powers vested in the
Corporation under the Code, or (iv) the proceeding is initiated pursuant to
Section 9 hereof.

      5.  CONTINUATION OF INDEMNITY. All agreements and obligations of the
Corporation contained herein shall continue during the period Agent is a
director, officer, employee or other agent of the Corporation (or is or was
serving at the request of the Corporation as a director, officer, employee or
other agent of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise) and shall continue thereafter so long as Agent
shall be subject to any possible claim or threatened, pending or completed
action, suit or proceeding, whether civil, criminal, arbitration, administrative
or investigative, by reason of the fact that Agent was serving in the capacity
referred to herein.

      6.  PARTIAL INDEMNIFICATION. Agent shall be entitled under this Agreement
to indemnification by the Corporation for a portion of the expenses (including
attorneys' fees), witness fees, damages, judgments, fines and amounts paid in
settlement and any other amounts that Agent becomes legally obligated to pay in
connection with any action, suit or proceeding referred to in Section 3 hereof
even if not entitled hereunder to indemnification for the total amount thereof,
and the Corporation shall indemnify Agent for the portion thereof to which Agent
is entitled.

      7.  NOTIFICATION AND DEFENSE OF CLAIM. Not later than thirty (30) days
after receipt by Agent of notice of the commencement of any action, suit or
proceeding, Agent will, if a claim in respect thereof is to be made against the
Corporation under this Agreement, notify the Corporation of the commencement
thereof; but the omission so to notify the Corporation will not relieve it from
any liability which it may have to Agent otherwise than under this Agreement.
With respect to any such action, suit or proceeding as to which Agent notifies
the Corporation of the commencement thereof:

          (a) the Corporation will be entitled to participate therein at its own
expense;

          (b) except as otherwise provided below, the Corporation may, at its
option and jointly with any other indemnifying party similarly notified and
electing to

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assume such defense, assume the defense thereof, with counsel reasonably
satisfactory to Agent. After notice from the Corporation to Agent of its
election to assume the defense thereof, the Corporation will not be liable to
Agent under this Agreement for any legal or other expenses subsequently incurred
by Agent in connection with the defense thereof except for reasonable costs of
investigation or otherwise as provided below. Agent shall have the right to
employ separate counsel in such action, suit or proceeding but the fees and
expenses of such counsel incurred after notice from the Corporation of its
assumption of the defense thereof shall be at the expense of Agent unless (i)
the employment of counsel by Agent has been authorized by the Corporation, (ii)
Agent shall have reasonably concluded that there may be a conflict of interest
between the Corporation and Agent in the conduct of the defense of such action
or (iii) the Corporation shall not in fact have employed counsel to assume the
defense of such action, in each of which cases the fees and expenses of Agent's
separate counsel shall be at the expense of the Corporation. The Corporation
shall not be entitled to assume the defense of any action, suit or proceeding
brought by or on behalf of the Corporation or as to which Agent shall have made
the conclusion provided for in clause (ii) above; and

          (c) the Corporation shall not be liable to indemnify Agent under this
Agreement for any amounts paid in settlement of any action or claim effected
without its written consent, which shall not be unreasonably withheld. The
Corporation shall be permitted to settle any action except that it shall not
settle any action or claim in any manner which would impose any penalty or
limitation on Agent without Agent's written consent, which may be given or
withheld in Agent's sole discretion.

      8.  EXPENSES. The Corporation shall advance, prior to the full disposition
of any proceeding, promptly following request therefor, all expenses incurred by
Agent in connection with such proceeding upon receipt of an undertaking by or on
behalf of Agent to repay said amounts if it shall be determined ultimately that
Agent is not entitled to be indemnified under the provisions of this Agreement,
the Bylaws, the Code or otherwise.

      9.  ENFORCEMENT. Any right to indemnification or advances granted by this
Agreement to Agent shall be enforceable by or on behalf of Agent in any court of
competent jurisdiction if (i) the claim for indemnification or advances is
denied, in whole or in part, or (ii) no disposition of such claim is made within
ninety (90) days of request therefor. Agent, in such enforcement action, if
successful in whole or in part, shall be entitled to be paid also the expense of
prosecuting his claim. It shall be a defense to any action for which a claim for
indemnification is made under Section 3 hereof (other than an action brought to
enforce a claim for expenses pursuant to Section 8 hereof, provided that the
required undertaking has been tendered to the Corporation) that Agent is not
entitled to indemnification because of the limitations set forth in Section 4
hereof. Neither the failure of the Corporation (including its Board of Directors
or its stockholders) to have made a determination prior to the commencement of
such enforcement action that indemnification of Agent is proper in the
circumstances, nor an actual determination by the Corporation (including its
Board of Directors or its stockholders) that such

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<PAGE>

indemnification is improper shall be a defense to the action or create a
presumption that Agent is not entitled to indemnification under this Agreement
or otherwise.

      10. SUBROGATION. In the event of payment under this Agreement, the
Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of Agent, who shall execute all documents required and shall
do all acts that may be necessary to secure such rights and to enable the
Corporation effectively to bring suit to enforce such rights.

      11. NON-EXCLUSIVITY OF RIGHTS. The rights conferred on Agent by this
Agreement shall not be exclusive of any other right which Agent may have or
hereafter acquire under any statute, provision of the Corporation's Certificate
of Incorporation or Bylaws, agreement, vote of stockholders or directors, or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding office.

      12. SURVIVAL OF RIGHTS.

          (a) The rights conferred on Agent by this Agreement shall continue
after Agent has ceased to be a director, officer, employee or other agent of the
Corporation or to serve at the request of the Corporation as a director,
officer, employee or other agent of another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise and shall inure to the
benefit of Agent's heirs, executors and administrators.

          (b) The Corporation shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Corporation, expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Corporation would be required to perform if no such succession
had taken place.

      13. SEPARABILITY. Each of the provisions of this Agreement is a separate
and distinct agreement and independent of the others, so that if any provision
hereof shall be held to be invalid for any reason, such invalidity or
unenforceability shall not affect the validity or enforceability of the other
provisions hereof. Furthermore, if this Agreement shall be invalidated in its
entirety on any ground, then the Corporation shall nevertheless indemnify Agent
to the fullest extent provided by the Bylaws, the Code or any other applicable
law.

      14. GOVERNING  LAW. This Agreement  shall be interpreted  and enforced
in accordance with the laws of the State of Delaware.

      15. AMENDMENT AND TERMINATION.  No amendment, modification, termination or
cancellation of this Agreement shall be effective unless in writing signed by
both parties hereto.

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      16. IDENTICAL COUNTERPARTS.  This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
but all of which together shall constitute but one and the same Agreement. Only
one such counterpart need be produced to evidence the existence of this
Agreement.

      17. HEADINGS. The headings of the sections of this Agreement are inserted
for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction hereof.

      18. NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given (i)
upon delivery if delivered by hand to the party to whom such communication was
directed or (ii) upon the third business day after the date on which such
communication was mailed if mailed by certified or registered mail with postage
prepaid:

          (a) If to Agent, at the address  indicated on the signature page
hereof.

          (b) If to the Corporation, to:

              Dynamic Materials Corporation
              551 Aspen Ridge Drive
              Lafayette, Colorado 80026

          or to such other  address as may have been  furnished  to Agent by
the Corporation.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                        6

<PAGE>

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

                                    DYNAMIC MATERIALS CORPORATION

                                    By:________________________________________

                                    Name:______________________________________

                                    Title:_____________________________________

Agent:

____________________________________

____________________________________
      (Home Address)

____________________________________
      (Telephone Number)

____________________________________
Signature

                                        7

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