Exhibit
10.13


 


THIRD AMENDMENT TO LEASE


 


THIS THIRD
AMENDMENT TO LEASE (“Amendment”)
effective as of October 1, 2006 by and between Aerospace/Defense,
Inc., a South Carolina corporation (hereinafter call the “Landlord”) and Force Protection
Industries, Inc. and Force Protection, Inc.,
Nevada corporations (collectively, the “Tenant”).


 


RECITALS


 


1.                                      By
industrial Lease effective as of January 15, 2006, as amended by instrument
dated as of May 1, 2006, entitled “First Amendment to Lease” (“First Amendment”) and further amended by instrument dated as
of July 1, 2006, entitled “Second Amendment to Lease” (“Second
Amendment”), the Landlord leased unto Tenant certain premises within
Building No. 1 situated in an industrial project (the “Project”)
located in Ladson (Charleston County), South Carolina. The Industrial Lease as
amended by the First and Second Amendments shall hereinafter be referenced
collectively as the “Lease.” By the
execution of this third Amendment, the parties intend to amend the Lease
according to the terms of Subsection 27K of the Lease. Each capitalized term
used and not otherwise defined or modified herein shall have the meaning
ascribed thereto in the Lease.


 


2.                                      At
the request of the Tenant, the Landlord has agreed to modify the term “Premises” under the terms, conditions and reservations
hereunder as follows:


 


A.                                   Adding
a total of 70,507 square feet to Paragraph 1A, Clause (i) of the Lease which
square footage is comprised of and added to the definition of “Leased Area” as of the dates listed below:


 


1.                                      1,040 square feet
comprised of an area measuring approximately 13 feet by 80 feet located in the
mezzanine above D-Bay in Building No. 1 as shown on Exhibit A to this
Amendment (being the remaining portion of D-Bay mezzanine not heretofore leased
to the Tenant) — to become a portion of the Leased Area as of November 1, 2006;


 


2.                                      38,419 square
feet comprised of two areas of C-Bay in Building No. 1, one area measuring
approximately 114 feet by 241 feet and delineated as “Area (C)” on Exhibit B
to this Amendment and the other area measuring approximately 55 feet by 199
feet and delineated as “Area (D)” on Exhibit B (being the remaining
portion of C-Bay not heretofore leased to the Tenant) — to become a portion of
the Leased Area as of November 1, 2006;


 


3.                                      (a)                                  3,540 square feet of
floor area measuring approximately 59 feet by 60 feet of A-Bay of Building No.
I together with the existing 4 truck docks and doors (representing the eastern
portion of A-Bay situated to the east of and adjacent to that portion of A-Bay
currently leased to Z-Man Fishing Products, Inc. and to the north of a portion
of B-Bay


 


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currently
leased to the Tenant) and delineated as “Area A” on Exhibit C to this
Amendment — to become a portion of the Leased Area as of November 1, 2006;


 


3.                                      (b)                                 10,620 square feet of
floor area measuring approximately 180 feet by 59 feet of A Bay of Building No.
1 (representing the western portion of the industrial area of A Bay situated to
the west of and adjacent to that portion of A Bay referenced in subsection 3(a)
above) and delineated as “Area B” on Exhibit C to This Amendment — to
become a portion of the Leased Premises as of December 1, 2006;


 


3.                                      (c)                                  2,880 square feet of
floor area measuring approximately 12 feet by 240 feet of B Bay of Building I
and delineated as “Area C” on Exhibit C to this Amendment — to become a
portion of the Leased Premises as of December 1, 2006; and


 


3.                                      (d)                                 5,952 square feet of
floor area measuring approximately 16 feet by 372 feet of B Bay of Building No.
1 and delineated as “Area D” on Exhibit C to this Amendment (note — the
Leased Area under this subparagraph (d) does not include a 7-foot wide strip of
floor area adjacent to and running along the northern edge of the Machine Pit
as shown on Exhibit C) — to become a portion of the Leased Area as
of December 1, 2006.


 


4.                                      4,936 square feet
comprising office areas shown as the cross-hatched area on Exhibit D to
this Amendment (being the remaining office area on the northern side of
Building No. 1 not heretofore leased to the Tenant) — to become a portion of
the Leased Area as of January 1, 2007; and


 


5                                         3,120 square
feet (measuring approximately 13 feet by 240 feet) and comprising the floor
area of the mezzanine situated between B-Bay and C-Bay of Building No. 1 as
shown on Exhibit E to this Amendment — to become a portion of the Leased
Area as of January 1, 2007.


 


For clarification, once all the
additional square footage referenced in subsections 2A1 through 2A5 above have
become added to and a part of the Leased Area as hereinabove provided, the
total square footage of Leased Area shall total 169,767 square feet (26,180
square feet referenced in Clause (i) of Paragraph 1A of the original Lease,
plus 35,529 square feet referenced in the First Amendment and 37,551 square
feet referenced in the Second Amendment and 70,507 square feet referenced
above).


 


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B.                                     Modifying
Clause (ii) of Paragraph 1A to read as follows: . . (ii) the fixtures located
therein, including the Paint Spray Booth shown, and marked on Exhibit A as “Paint,” the Sandblast Booth shown and marked on Exhibit A
as “Blast,” 100 HP compressor and 75 HP
compress (the “Compressors”) and other machinery
associated with the Paint Booth, Sandblast Booth and Compressors as listed on Exhibit
A-1, but excluding any overhead cranes located above Bay B, but including
the use of (x) the radio controlled overhead/bridge crane located above the
floor area of Bay D (the “D-Crane”), (y) the
radio controlled overhead/bridge crane located above the floor area of Bay C
(the “C-Crane”), and (z) (as of December 1,
2006) the three overhead/bridge cranes located above the floor area of Bay A
(the “A-Cranes”).


 


C.                                     Modifying
Paragraph 1A by adding a new Clause “(iv)” to read as follows:


 


..., the “Common Areas” (hereinafter
defined), and (iv) two outdoor areas for the testing of vehicles (collectively,
the “Outdoor Testing Areas”) described as
(y) approximately 500 feet of the entrance road (connecting Highway 78 and
Stoney Road and located to the east of the common parking areas) (the “Entrance Road”) running from a point adjacent the
southeastern corner of the Building No. 3 common parking area and running in a
southerly direction for 500 feet to a point north of the location of the
Entrance Road across which railroad tracks have been installed — shown as the
redline on Exhibit F to this Amendment and marked “Vehicle
Brake Test Track” thereon (the “Brake Test Area”)
and (z) an approximately 25 foot wide area running westerly from the Entrance
Road and continuing around the former pond area (on which pond area the
Landlord is growing pine trees) — shown as the green line on Exhibit F
to this Amendment and marked “FPII Vehicle Obstacle
Course” thereon (the “Obstacle Course Area”).


 


The use by the Tenant of the Outdoor Testing Areas shall be subject to
all of the terms, conditions and provisions of the Lease and this Amendment,
especially including, without limiting the forgoing, those provisions contained
in Paragraph 12 of this Amendment.


 


The D-Crane, C-Crane, A-Cranes and jib cranes located in Building No. 1
(the “Jib Cranes”) shall be included within
the definition of “Equipment” as that term is defined in Paragraph 1A of the
Lease. There are approximately 25 Jib Cranes (of one and two tons each) located
throughout Building No. 1. Tenant agrees not to remove any of the Jib Cranes
from Building No. 1 without the prior written consent of the Landlord.


 


3.                                      In
consideration for amending the Lease as referenced in Recitals 1 and 2 above,
the Tenant agrees to amend Paragraph 3A (a) by increasing the Base Rent for the
Leased Area as hereinafter provided.


 


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4.                                      The
Landlord and Tenant now wish to enter into this Amendment to amend the Lease
according to the terms, provisions and conditions hereinafter set forth.


 


NOW THEREFORE,
in consideration of the mutual promises given one to the other, the parties do
hereby covenant and agree to amend and modify the Lease as follows:


 


1.                                      All
the recitals set forth above in the “Recitals”
clauses are hereby made an integral part of this Agreement.


 


2.                                      Paragraph
1 (The Premises), Section A, Clause (i) of the Lease is modified by
adding to the definition of Leased Area 70,507 square feet according to Recital
2A above for a total square footage of Leased Area in Building No. 1 of 169,767
square feet.


 


3.                                      Paragraph
1 (The Premises), Section A, Clause (ii) of the Lease is modified
according to Recital 2B above.


 


4.                                      Paragraph
1 (The Premises), Section A of the Lease is modified according to
Recital 2C above.


 


5.                                      Paragraph
4D and Paragraph 5A are hereby amended by amending the square footage of the
Leased Area and the pro rata percentage share based on the square footage of
the Leased Area.


 


6.                                      Paragraph
5B(vi) of the Lease is modified by deleting the Hallways (shown on Exhibit D
to the Second Amendment) adjacent to the offices and restrooms (leased under
the Second Amendment) from the meaning of Common Areas. For clarification,
these areas were added to the meaning of “Common Areas”
pursuant to Paragraph 4 of the Second Amendment, but with the execution of this
third Amendment, the Tenant is now leasing the entire office area of Building
No. 1, such Hallways and Restrooms should not be included within the meaning of
Common Areas.


 


7.                                      Paragraph
5B is modified by adding the following subparagraphs after the existing
subparagraph (viii):


 


(ix)                              It is understood that the
road-testing of armor-plated vehicles and other similar heavy vehicles within
the Project is prohibited with the sole exception that such vehicles may be
road-tested within the Outdoor Testing Areas defined in Recital 2C above. The
meaning of “road-testing” in the previous sentence includes exceeding the speed
limit, making sudden sharp turns and sudden stops, and accelerating at high
speeds.


 


(x)                                 It is acknowledged
that the Landlord is repaving the parking lot in front (north) of the office
area of Building No. 1 (the “Front Parking Lot”).
It is understood that the Front Parking Lot is designed and constructed for the
parking of automobiles and light-duty truck traffic (such as, for example, US
Postal Service, Federal Express, and other light-duty delivery trucks). No
heavy vehicles (such as, for example, tractor trailer trucks and armor-plated
vehicles) will be allowed on or within the Front Parking Lot.


 


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Any damage to
the Front Parking Lot caused by the Tenant or any of its employees, contractors
or invitees in violation of this paragraph will be for the account of the
Tenant.


 


8.                                      Notwithstanding
any term or provision contained in this Amendment and the Lease, the Landlord
reserves to itself and other occupants and tenants of Building No. 1 and their
respective employees and invitees the non-exclusive access and rights of
ingress and egress across, and use of, certain portions of the Premises as
follows:


 


A.                                   Pedestrian
and vehicular access across the area that measures approximately 15 feet on
each side of and including the railroad tracks running near and parallel along
the western boundary of C-Bay. For clarification, this access area (which is
marked “RR Track” on Exhibit B) is
retained by the Landlord in order to drive vehicles (such as, for example,
switch engine, railroad engine, mobile crane and other vehicles) across C-Bay
to and from Bay B and from time-to-time transport materials across this access
area;


 


B.                                     The
four (4) truck docks and truck doors at the east end of A-Bay (referenced in
Recital 2A(3) above) for loading and unloading purposes and pedestrian and
forklift (and similar vehicles) access across A-Bay leading to and from the
four (4) truck docks to other areas of Building No. 1 not now leased to the
Tenant (for example, the west end of B-Bay).


 


The area reserved for access
and use under this Paragraph 8 of this Amendment shall not be blocked by either
party during the term of this Lease. The parties agree to cooperate with each
other so that neither party unreasonably interferes with the business,
operations, employees and invitees of the other party while ingress and egress
rights are being utilized by the Landlord and other occupants and tenants of
Building No. 1 as contemplated under this Paragraph 8.


 


9.                                      For
avoidance of doubt, the parties acknowledge and reaffirm Paragraph 1B of the
Lease (as well as the other terms and provisions thereof not inconsistent with
the terms and provisions of this Amendment) under which the Landlord makes no
representations or warranty as to the condition of the Premises and the Tenant
represents to the Landlord that Tenant has examined the physical conditions of
(a) the 70,507 square feet to be added to the Leased Area according to
Paragraph 2 of this Amendment and (b) the Brake Test Area and the Obstacle
Course Area (both of which comprise the Outdoor Testing Areas) and has found
them satisfactory for all purposes hereof and the Tenant accepts the Leased
Area in their present condition, “As-Is.” It is contemplated that the Tenant
will renovate the office area referenced in Paragraph 2A(4) of the Recitals
including installing new carpeting and HVAC systems.


 


10.                                Paragraph
3A (a) is amended so that the entire subsection (a) shall read as follows:


 


(a)                                  For
the Leased Area –


 


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(i)                                  Beginning on the
Commencement Date through March 31, 2006 –no Base Rent shall be due.


 


(ii)                               From April 1, 2006
through June 30, 2006, the monthly Base Rent shall be $8,181.25 per month.


 


(iii)                            From July 1, 2006 through
October 31, 2006, the monthly Base Rent shall be $31,018.75.


 


(iv)                           From November 1, 2006
through November 30, 2006 (one (1) month), the monthly Base Rent shall be
$42,843.48.


 


(v)                                From December 1, 2006
through December 31, 2006 (one (1) month), the monthly Base Rent shall be
$48,192.78.


 


(vi)                             From January 1, 2007
through the remainder of the first Lease Year, the monthly Base Rent shall be
$50,408.18. The net effect is that overall rent goes down from $3.75 to $3.56 a
square foot.


 


11.                                Paragraph
9B of the Lease (Care and Maintenance of the Leased Area) is amended by
adding the following to the existing paragraphs:


 


It is
acknowledged that the Tenant has cut and installed utility trenches in the
concrete flooring of D-Bay and may desire to cut and install utility trenches
in C-Bay. Prior to cutting and installing any additional utility trenches
within the Leased Area, the Tenant shall be required to obtain prior written
approval and consent from the Landlord. Prior to the expiration or termination
of this Lease, the Tenant, at its sole cost and expense, will fill all utility
trenches cut and installed by or on behalf of the Tenant (with rebar and with
the same or better grade of concrete existing at the commencement of this
Lease) and place the concrete flooring in the same condition as it was at the commencement
of the Lease; provided, however, prior to filling such utility trenches, the
Tenant shall notify the Landlord in writing (the “Tenant’s
Notice”) and the Landlord shall have the right to designate in
writing those portions of the utility trenches that the Landlord desires to
remain unfilled. For clarification, if, after the Tenant’s Notice is delivered
to the Landlord, the Landlord does not specify in writing to the Tenant within
ten (10) days of receipt by the Landlord of the Tenant’s Notice which trenches
the Landlord desires to remain unfilled, the Tenant shall fill all such utility
trenches as required above.


 


12.                                Paragraph
9 (Maintenance and Repair) is amended by adding the following
subparagraph D:


 


D.                                    Use,
Care and Maintenance of the Outdoor Testing Areas.


 


(a)                                  General
Provisions


 


(i)                                     The
Tenant agrees to accept the Outdoor Testing Areas in their current “As-Is,” “Where-Is”
condition and the Landlord does not make any claims, warranties or promises
whatsoever about the condition or compliance with law of the Outdoor Testing
Areas. The Landlord shall not be required to take any action or make


 


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any
improvements whatsoever with respect to the Outdoor Testing Areas. Throughout
the period that the Outdoor Testing Areas are included in the term Premises,
the Tenant shall keep the Outdoor Testing Areas in neat, clean, orderly and
environmentally clean condition, free of debris and trash.


 


(ii)                                  The
Tenant shall use the Outdoor Testing Areas for the sole purpose of daylight
testing of vehicles that are manufactured within the Project and for no other
purpose. Testing of its Vehicles shall occur only during daylight hours. For
avoidance of doubt, the Tenant shall not allow (a) any vehicles not manufactured
within the Project to be driven or tested on the Outdoor Testing Areas, and (b)
any repairs or maintenance of any vehicles within the Outdoor Testing Areas.
Tenant agrees to take extra precaution to ensure that no spillage occurs of any
substance (including, but not limited to, oil, grease, gasoline and similar
substances (collectively “Petroleum Products”))
within the Outdoor Testing Areas or any where else within the Project. It shall
be the responsibility of the Tenant to ensure that no spillage of Petroleum
Products occurs as a result of the Tenant’s use of the Outdoor Testing Areas.
(In the event of a spill, Tenant shall immediately notify the Landlord, and the
Tenant at its sole cost and expense shall promptly and diligently (until
complete) and in compliance with all applicable laws, clean and remediate any
area of the Project contaminated by such spillage. For further clarification,
nothing contained herein shall limit the provisions of Paragraph C of Section
21 (Environmental Provisions) of this Lease.


 


(b)                                 Brake
Test Area. It shall be the sole responsibility of the Tenant to clearly
delineate the boundaries of the Brake Test Area and in this regards, the Tenant
shall (i) ensure that its vehicles are tested only within the Brake Test Area
and not tested within any other area of the Project (with the sole exception of
the Obstacle Course Area), (ii) prior to utilizing the Brake Test Area for
testing of its vehicles, install a gate across the Entrance Road at the
starting (northern) end of the Brake Test Area and other clearly-marked caution
barriers so that those utilizing the Entrance Road and other parts of the
Project will not enter into the Brake Test Area during those times that the
Tenant is testing its vehicles within the Brake Test Area, and (iii) take such
other measures and actions to ensure the safety of the public. A set of keys to
the gate referenced in the preceding sentence shall be provided to the
Landlord, who, with other occupants of the Project, or in the case of an
emergency, can use that portion of the Entrance Road comprising the Brake Test
Area when the Tenant is not testing its vehicles thereon. In addition to the
requirements of Section 22 (Surrender of Tenant) as they would apply to
the Brake Test Area, at the termination of the Lease (with respect to the Brake
Test Area), the Tenant shall repave that portion of the Entrance Road
comprising the Brake Test Area. For clarification, the damage to the Entrance
Road and that portion of the Entrance Road comprising the Brake Test Area caused
by the breaking, sudden breaking and road testing of vehicles shall not be
considered “ordinary wear and tear” and the repaving of the Brake. Test Area is
intended to repair the damage to the Brake Test Area caused by the Tenant
testing its vehicles thereon.


 


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(c)                                  Obstacle
Course Area -  It is understood that
the use by the Tenant of the Obstacle Course Area does not include the
remaining acreage owned by the Landlord, including, in particular, but without
limitation, the storm water drainage ditch to the west of the Obstacle Course
Areas and the areas within the former pond site (which Obstacle Course Area
surrounds) and without the Obstacle Course Area which the Landlord is using for
the purpose of growing trees. In order to avoid damaging the storm water
ditches of the Project and the seedlings, trees and surface conditions of the
remainder of the Landlord’s real property (outside the 25-foot wide Obstacle
Course Area), the Tenant shall not permit anyone driving its vehicles on the
Obstacle Course Area to drive outside the Obstacle Course Area, and shall take
precautions to ensure that its employees and invitees testing its vehicles
confine themselves to the Obstacle Course Area. It shall be the sole responsibility
of the Tenant to clearly mark and delineate the boundaries of the Obstacle
Course Area. The Tenant further agrees to install gates and clearly-marked
caution barriers to ensure the safety of the public and to protect the
seedlings and trees outside the Obstacle Course Area. To allow Landlord,
governmental and regulatory personnel access to the storm water ditch and
drainage system of the Project without entering the Obstacle Course Area,
promptly after signing this Amendment, the Tenant agrees to install a gate
(with lock) on the Project property adjacent the sewer lift station on Stoney
Road. The Tenant further agrees not to (i) damage, obstruct or interfere with
any of the storm water ditches within or upon the Project and (ii) allow any debris,
trash or other items to fall or flow into the storm water ditch system (which
could cause it to clog or damage the system). Cutting, removal and damage to
trees and seedlings by Tenant or its employees or invitees (without the express
prior written permission of the Landlord) shall not be permitted and will be
considered a breach of this Lease.


 


At the termination of the Lease (with respect to the Obstacle Course
Area), the Tenant shall restore and landscape the entire Obstacle Course Area
to the same surficial condition and stability as existing at the execution of
this Amendment. For clarification and without limiting the foregoing, such
restoration and landscaping shall include leveling the surface of the Obstacle
Course Area to the same level as it exists at the execution of this Amendment,
filling-in holes and ruts with environmental clean dirt (substantially similar
to the composition and kind of dirt currently on or near the surface of the
Obstacle Course Area), reseeding with the same kind of grass currently thereon
and fertilizing the seed to permit rapid growth thereon to help prevent erosion
of the newly filled and seeded areas. All obstacles, articles and other items
installed by the Tenant within or associated with the Obstacle Course Area shall
be completely removed by the Tenant prior to such restoration and landscaping.


 


13.                                 This
Amendment may be executed in several counterparts, each of which shall be
deemed an original and such counterparts shall constitute but one and the same
instrument. If this Amendment or the signature page, as executed, is
transmitted by one party to the other by


 


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facsimile
transmission or electronically “pdf” transmission, such transmission shall be
deemed an executed original of this Amendment and of such signature.


 


14.                                 Except
as modified by this Amendment, the Lease remains unchanged.


 


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IN WITNESS
WHEREOF, the parties hereto have duly executed this Amendment under seal as of
the day and year first above written.


 


	
   

  	
  LANDLORD:

  
	
   

  	
   

  
	
   

  	
  AEROSPACE/DEFENSE,
  INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ M. Jerry
  Garfinkle

  
	
   

  	
   

  
	
   

  	
  Its:

  	
  Assistant
  Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
  FORCE
  PROTECTION INDUSTRIES, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Raymond
  Pollard

  
	
   

  	
   

  
	
   

  	
  Its:

  	
  COO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FORCE
  PROTECTION, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Raymond
  Pollard

  
	
   

  	
   

  
	
   

  	
  Its:

  	
  COO

  



 


See Attached Exhibits


 


10