[ DMC LETTERHEAD ]


                                February 1, 2000



Spin Forge, LLC
1700 East Grand Avenue
El Segundo, California  90245

          Re:   Dynamic Materials Corporation/Spin Forge, LLC
                Loan Agreement Termination

Dear Ladies and Gentlemen:

          Reference is hereby made to (i) the Loan Agreement (the "Loan
Agreement"), dated as of March 18, 1998, between Spin Forge, LLC, a California
limited liability company ("Spin Forge") and Dynamic Materials Corporation, a
Delaware corporation ("DMC"), (ii) the Master Promissory Note, dated as of March
18, 1998, from Spin Forge to and in favor of DMC, in the principal amount of
$600,000 (the "Note"), (iii) the Stock Pledge Agreement, dated as of March 18,
1998, between Spin Fore and DMC (the "Pledge") and (iv) the Personal Guaranty,
dated as of March 18, 1998, from Joseph Allwein and Darlene Bauer, jointly and
severally, as the two owners and managers of Spin Forge, to and in favor of DMC
(the "Guaranty"). Capitalized terms used but not separately defined herein shall
have the meaning given thereto in the Loan Agreement. DMC and Spin Forge hereby
acknowledge that as of the date hereof and as a condition hereto, Spin Forge has
repaid in full the principal outstanding under the Loan Agreement and the Note
prior to the Maturity Date thereunder, and DMC and Spin Forge agree that DMC has
no further obligation to advance funds to Spin Forge under the Loan Agreement or
the Note. DMC and Spin Forge further agree that the Loan Agreement, the Note and
the Pledge, and all exhibits and schedules to any of the foregoing, and all
security interests, liens and encumbrances created thereby, are hereby
terminated and cancelled and of no further force and effect, except for the
survival and continuance of certain agreements between DMC and Spin Forge with
respect to the Dover Note, which agreements have been continued and restated in
the Agreement and Amendment to Operating Lease, dated as of February 1, 2000,
between DMC and Spin Forge, and the Guaranty is released and discharged.

          The parties hereto agree to execute such further and other documents
or instruments and to provide such further and other assurances as may be
reasonably required to effect the transactions contemplated hereby and the
intent of the parties hereto.




Spin Forge, LLC
February 1, 2000
Page 2


          DMC shall deliver to Spin Forge the cancelled Note and all
certificates representing the shares of stock of DMC owned by Spin Forge and
pledged and delivered to DMC pursuant to the Pledge.

          If you agree with the foregoing, please execute each of the copies of
this Letter Agreement and return an executed copy to us.

                                     Sincerely yours,

                                     DYNAMIC MATERIALS CORPORATION


                                     By: /s/ R.A. Santa
                                        --------------------------
                                     Name:  Richard A. Santa
                                          ------------------------
                                     Title: VP-Finance & CFO
                                           -----------------------


Agreed and Accepted as of the 1st day of February, 2000.

SPIN FORGE, LLC

By:  /s/ Joseph P. Allwein
   -------------------------
Name: Joseph P. Allwein
     -----------------------
Title: President
      ----------------------