DEFERRAL AND WAIVER AGREEMENT
THIS DEFERRAL AND WAIVER AGREEMENT is made and entered into this 15th day of October, 1999,
by and between KEYBANK NATIONAL ASSOCIATION, a national banking association ("LENDER") and
DYNAMIC MATERIALS CORPORATION, a Delaware corporation (the "COMPANY").
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 has 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. Company hereby acknowledges that as of the date hereof, it continues to be in default under the Loan
Documents and is unable to cure such defaults.
D. Company has requested that