AGREEMENT AND AMENDMENT TO OPERATING LEASE
This Agreement and Amendment to Operating Lease (the "Amendment") is
made and entered into as of February 1, 2000, by and between Spin Forge, LLC, a
California limited liability company ("Lessor") and Dynamic Materials
Corporation, a Delaware corporation ("Lessee").
RECITALS
A. Lessee and Lessor entered into that certain Operating Lease (the
"Lease"), dated as of March 18, 1998, which was also signed by Joe Allwein with
respect to Article 3, whereby Lessor leased to Lessee and Lessee leased from
Lessor certain real property located in Los Angeles County, California, with a
street address of 1700 East Grand Avenue, El Segundo, California, as more
particularly described therein, together with the manufacturing, storage and
administrative buildings and all other improvements located thereon.
B. The Lessee and the Lessor desire hereby to set forth their agreement
with respect to certain matters set forth herein and to amend the Lease as
provided herein.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged by the parties hereto, Lessor and
Lessee hereby agree as follows:
1. DEFINED TERMS. Capitalized terms used herein which are not
specifically defined will have the meaning given thereto in the Lease.
2. AGREEMENT.
a. SURVIVAL AND RESTATEMENT. In connection with the Lease, the Lessor
and the Lessee entered into a Loan Agreement, dated as of March 18, 1998 (the
"Loan Agreement"), which is being terminated by a Letter Agreement of even date
herewith between the Lessor and the Lessee. Lessor and Lessee acknowledge and
agree that certain agreements between Lessor and Lessee with respect to that
certain Assumption of and Second Modification of Unconditional Promissory Note,
dated December 11, 1996, between Lessor and DDI Properties, Inc. (the "Dover
Note") should survive the termination and cancellation of the Loan Agreement and
continue with full force and effect, so the parties hereto restate such
agreements as follows.
b. COVENANTS OF LESSOR. During the Term, including the Extended
Term, if any, of the Lease, Lessor will at all times comply with the covenants
contained herein:
i. Lessor will make all payments of principal and interest, on or
before the date on which such payments become due and payable, with respect to
the Dover Note.
ii. Lessor will provide Lessee with copies of all documents,
including correspondence, relating to any amendments or modifications of the
Dover Note, including, without limitation, any changes in the payment schedule
under the Dover Note.
iii. Lessor will not grant, create, incur, assume, permit or
suffer to exist any lien, mortgage, pledge, security interest or other
encumbrance with respect to the Premises, except for the Second Amended Deed of
Trust securing the Dover Note.
iv. Lessor will not incur or suffer to exist any indebtedness,
contingently or otherwise, as obligor, guarantor or otherwise, or other
obligation with respect to which it is directly or indirectly liable, whether as
borrower, guarantor or otherwise, except for the Dover Note and that certain
Assumption and Modification of Promissory Note and Restated Promissory Note
dated December 11, 1996, between Lessor and Freedom Forge Corporation.
v. Lessor will promptly provide to Lessee all letters,
documents, writings or instruments alleging an event of default under the Dover
Note.
c. DEFAULTS. An Event of Default shall occur hereunder and under
the Lease if the Lessor shall fail to make any payment of principal or interest
due under or otherwise defaults in any other manner under the Dover Note.
d. REMEDIES. Upon the occurrence of an Event of Default, Lessee
shall, in its sole and absolute discretion, have the right to either (i) assume
Lessor's obligations under the Dover Note, (ii) repay to DDI Properties, Inc.
the outstanding principal and accrued interest on the Dover Note or (iii)
purchase the Dover Note from the holder of the Dover Note provided the holder
consents to such sale.
3. AMENDMENTS TO LEASE. The Lease is hereby amended and modified as
follows:
a. Section A of Article 2 of the Lease is hereby deleted in its
entirety and the following is substituted therefor:
"A. During the initial Term of this Lease, Lessee shall pay to
Lessor base rent in an amount equal to $30,244 per month (the
"Base Rent") payable, without deduction or offset of any kind
except as provided in Section C of Article 2 hereof, in lawful
money of the United States, on the first business day of each
month (the "Rent Due Date"); provided, however, that Base Rent
for any fraction of a month at the commencement or expiration
of this Lease shall be prorated. All payments of rent shall be
made payable to Lessor and shall be sent to Lessor at the
address set forth herein or such other address as Lessor shall
from time to time designate by written notice to Lessee."
b. Section C of Article 2 of the Lease is hereby deleted in its
entirety and the following is substituted therefor:
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"In the event that Lessee assumes, repays or otherwise
relieves or releases Lessor from Lessor's obligations under
the Dover Note, the Base Rent shall be offset and reduced in
the amount of such assumption or the amount of liability under
the Dover Note from which the Lessor is relieved or released."
c. Schedule A (Payment Schedule) to the Lease is hereby deleted in
its entirety.
4. RATIFICATION AND CONFIRMATION. Lessor and Lessee hereby ratify,
approve and confirm the Lease, as amended hereby, and agree that the Lease
remains in full force and effect in accordance with its terms, except as amended
hereby.
5. GENERAL PROVISIONS.
a. All references to the Lease in any other agreement, document,
instrument or writing shall hereafter be deemed to refer to the Lease as amended
hereby.
b. This Amendment may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
c. This Amendment is binding upon and will inure to the benefit of
the Lessor and the Lessee, and their respective successors and assigns.
d. This Amendment shall be governed by and construed in accordance
with the laws of the State of California (without regard to its conflict of law
doctrines), and the venue for any action to enforce or to interpret this
Amendment shall be in a court of competent jurisdiction located in the State of
Colorado and each of the parties consents to the jurisdiction of such court in
any such action or proceeding and waives any objection to venue laid therein.
IN WITNESS WHEREOF, the undersigned have caused this Amendment to be duly
executed and delivered as of the date first above written.
LESSOR:
SPIN FORGE, LLC,
a California limited liability company
By: /s/ Joseph P. Allwein
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Name: Joseph P. Allwein
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Title: President
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LESSEE:
DYNAMIC MATERIALS CORPORATION,
a Delaware corporation
By: /s/ Richard A. Santa
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Name: Richard A. Santa
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Title: VP-Finance and CFO
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