Exhibit 10.6


 


GROUND LEASE


 


THIS GROUND LEASE (“Lease”) is
entered into as of the 1st day of February, 2007, by and between AEROSPACE/DEFENSE, INC., a South Carolina corporation (“Landlord”), and FORCE PROTECTION
INDUSTRIES, INC., a Nevada corporation and FORCE
PROTECTION, INC., a Nevada corporation (collectively, the “Tenant”).


 


Upon the terms and subject to the conditions hereinafter set forth, the
Landlord leases to the Tenant and the Tenant leases from Landlord, the property
hereinafter described:


 


1.             THE PREMISES /THE
BUILDING.


 


A.            The real
property hereby leased to the Tenant contains approximately 5.8 acres, and is
part of an industrial development owned by the Landlord and located in Ladson,
Charleston County, South Carolina (“Project”).  The term “Premises”
or “Leased Area” means and is comprised of
the following: (i) the approximate 5.8 acres parcel outlined and marked “Premises” on Exhibit A, (the “Parcel”) (ii) the building and improvements to be
constructed by the Tenant on the Parcel (as referenced in subsection C
below) and (iii) subject to Paragraph 5B (viii) hereof, the
non-exclusive right to use in common with the Landlord and other lessees and
occupants of the Project, the “Common Areas”
(hereinafter defined).


 


B.            Tenant represents that Tenant has examined the condition of the Parcel
and has found it satisfactory for all purposes hereof and Tenant accepts the
Parcel in its present condition, “AS IS.” 
The Tenant acknowledges that it has been given the opportunity to
inspect and has, in fact, inspected the Parcel, and is accepting the Parcel in “AS
IS” condition with all faults.  Landlord
hereby disclaims any and all warranties as to the Parcel, including, but not
limited to, any warranty of merchantability or fitness for a particular
purpose.  Notwithstanding the foregoing,
Landlord shall be responsible for any and all obligations under this Lease,
including but not limited to Section 21.


 


C.            The
Tenant agrees to construct upon the Parcel a first-class building (the “Building”) in a good workmanlike manner, using first-grade
materials, and in full compliance with all the laws, rules, regulations and
ordinances of any governmental agency having jurisdiction of the Premises, the
Building and the construction of the Building. 
The new Building to be constructed by the Tenant on the Parcel is
briefly described as follows:


 


Approximately 80,000 square feet of warehouse 2,500 square feet of
offices and 8,000 square feet of a carpenter shop as delineated and shown on Exhibits
C and C-1.  The Tenant agrees to
commence construction of the Building together with all improvements connected
and associated therewith (hereinafter collectively the “Building”
or “Building No. 6”) within thirty
(30) days of the Commencement Date of this Lease and agrees that the Building
will be substantially completed within one hundred twenty (120) days of the
Commencement Date - - all without unreasonably interfering with the other
occupants and tenants of the Project.  In
order to avoid having the Building interfere with the future use of the
railroad 


 

















 


tracks surrounding a portion of the Premises,
the Tenant agrees not to construct the Building closer than 25 feet to the
existing rail lines (subject to the right of the Tenant to remove a portion of
the railroad track crossing the Premises as referenced in Section 22D of
this Lease).  Also, for the safety of all
tenants and users and invitees of the Project, the Tenant agrees not to
construct the Building within 50 feet of the interior road (bordering the
western side of the Parcel) so any vehicle parking between the building and
such road will not block or interfere with the view of sight of those driving
along the road or those pedestrians walking to and from the Building.  For purposes of Section 10, the Building
shall be considered an “Alternation” as that term is defined in Section 10.


 


Within thirty (30) days of the date hereof,
the Tenant shall deliver to the Landlord final plans and specifications of the
Building to be constructed on the Premises. 
The Landlord shall have five (5) days after receipt to approve or
disapprove the plans and specifications. 
This Lease shall be subject to and conditioned upon the Tenant’s
approval of the final plans and specifications. 
If the Landlord does not approve the final plans and specifications for
any reason within the five-day period, this Lease shall be null and void.


 


Assuming approval of the final plans and
specifications for the construction of the Building, the Tenant agrees that no
substantial modification shall be made in the final plans and specifications
without the Landlord’s prior written consent.


 


2.             TERM


 


A.            The term
of this Lease shall commence as of February 1, 2007 and expire on July 14,
2008 (“Initial Term”).  The Initial Term and any extension thereof
are hereinafter referred to collectively as the “Term.”


 


B.            For
purposes of this Lease, the term “Lease Year”
shall refer to a period of twelve (12) consecutive months.  The first Lease Year shall commence on February 1,
2007 (“Commencement Date”) and end July 14,
2008.  Each subsequent Lease Year shall
commence on the anniversary of the Commencement Date.


 


C.            The
Initial Term of this Lease and any extension thereof may be extended at the
option of the Tenant for three (3) separate and successive periods of five
(5) years each (each an “Option Period”) commencing on the day following
the expiration date of the Initial Term or the last day of the then-current
Option Period, as the case may be. 
Tenant may exercise the option by notice in writing to Landlord served
at least six (6) months and not more than twelve (12) months prior to the
end of the last year of the Initial Term or the then-current Option Period, as
the case may be.  It shall be a condition
of the exercise of any option to renew that Tenant shall not be in default in
the performance of any terms, covenants, or conditions of this Lease at the
time Tenant gives any such notice to renew this Lease.  All terms and conditions of this Lease shall
be applicable to the Option Periods referred to in this Section 2C.


 


D.            Notwithstanding
the foregoing in this Section 2, the Term of this Lease and the term of
that certain Lease between the parties dated as of July 13, 2004 covering
Building No. 2 located within the Project (the “Building No. 2
Lease”) shall be coterminous; that is, the Term of this Lease must
be the same as the term of the Building No. 2 Lease.  For clarification, for the Tenant to exercise
its option to renew and extend this Lease under Section 2C above, the
Tenant shall have also exercised its option to renew fro the same 5-year period



 


2

















 


pursuant
to Section 2C of the Building No. 2 Lease, and if the Building No. 2
Lease expires or terminates, this Lease shall also expire and terminate at the
same time.  (See also, cross-default
provision in Section 20 of this Lease.)


 


3.             BASE RENT.


 


A.            Beginning
on the Commencement Date, and for the remainder of the first Lease Year, the
Tenant agrees to pay to the Landlord, without previous demand therefore, and
without setoff or deduction whatsoever, the following net monthly rent (“Base Rent”):


 


(i)            Beginning
on the Commencement Date through May 30, 2007 - no Base Rent shall be due;
and


 


(ii)           From June 1,
2007 through the remainder of the first Lease Year, the monthly Base Rent shall
be $7,500.00 per month.


 


B.            Commencing
with the first day of the second Lease Year, to-wit:  February 1, 2008 (“First
Adjustment Date”) and on the first day of each Lease Year thereafter
(“Subsequent Adjustment Date”) during the
Initial Term and any Option Period, the amount of the monthly Base Rent due
under this Lease shall be adjusted to an amount equal to the product of the
then-current monthly Base Rent multiplied by a fraction having as its numerator
the Consumer Price Index (hereinafter defined) published most recently prior to
applicable Adjustment Date and as its denominator the Consumer Price Index
published most recently prior to Commencement Date.  In the event the new Base Rate cannot be determined
as of the Adjustment Date, Tenant shall continue to pay the Base Rent due
during the prior Lease Year until Landlord notifies Tenant of the Base Rent,
and, within ten (10) days after deliver of such notice, Tenant shall
reimburse Landlord for any accrued but unpaid increase.  In no event shall the monthly Base Rent, as
adjusted on any Adjustment Date, be less than three percent (3%) over the Base
Rent payable during the prior Lease year, nor increase by more than seven
percent (7%) over the monthly Base Rent payable during the prior Lease Year.


 


C.            As used
herein, the term “Consumer Price Index”
shall mean the bi-monthly Consumer Price Index published by the Bureau of Labor
Statistics of the U.S. Department of Labor, using the index titled “Consumer
Price Index - - All Items - - All Urban Consumer (CPI-U) (1982-84=100)” for the
Atlanta, Georgia Standard Metropolitan Statistical Area.  If the Consumer Price Index shall no longer
be published or cannot be adjusted, then another index generally recognized as
authoritative shall be substituted therefore by Landlord, and the term “Consumer
Price Index” shall refer to such substituted index.


 


D.            All
monthly Base Rent payments and any other payments dues Landlord under this
lease shall be made without any setoff or deduction whatsoever and without
prior notice or demand and shall be payable and delivered to:


 


Aerospace/Defense, Inc.


4838 Jenkins Avenue


North Charleston, SC 29405


 


3

















 


or to such other place as may be designated by notice in writing from
Landlord to Tenant.  Base Rent and other
payments due Landlord by the Tenant under this Lease received more than ten (10) days
after the due date of such payment shall be subjected to a late penalty of one
(1%) percent of the amount of such payment for each month, or portion thereof,
such payment is late.  No payment by
Tenant or receipt by Landlord of any lesser sum than the monthly Base Rent
stipulated in this Lease shall be deemed to waive the right of Landlord to
receive in a timely manner the full amount due and payable to the Landlord.


 


4.             UTILITIES.


 


A.            It is
understood that utility services at the Project of which the Premises is a part
are supplied at one point of delivery through one meter.  Subject to Subsections 4A (a), (b) and
(c) hereof, Tenant shall reimburse Landlord for Landlord’s cost of
providing utility services to the premises on the basis of the Landlord’s
reasonable determination of Tenant’s usage of same.  With respect to electricity, the amount for
which Landlord will be reimbursed includes both the consumption factor and
so-called “demand” or “standby” factor, if the latter factor is employed for
billing purposes by the company providing electricity.  Tenant will also procure, or cause to be
procured, without cost to Landlord, any and all necessary permits, licenses, or
other authorizations required for the lawful and proper installation and
maintenance upon the Premises of wires, pipes, conduits, tubes, and other
equipment and appliances for use in supplying any of the utility services to
and upon the Building and Premises. 
Landlord, upon request of Tenant, and at the sole expense and liability
of Tenant, will join with Tenant in any application required for obtaining or
continuing any of the foregoing services; provided Landlord shall not be liable
for the same.


 


(a)           Provided
Tenant only consumes water for personal and normal maintenance and not for any
manufacturing or industrial process, Tenant’s pro rata portion of the Project’s
water and sanitary sewer bill will be an amount equal to the product of (1) the
total water or sewer bill, as the case may be, for the entire Project,
multiplied by (2) a fraction having as its numerator the total number of
employees who work in all buildings in the Project.  If the Tenant consumes water for any
manufacturing or industrial process, the Tenant’s pro-rata portion of the
Project’s water and sanitary sewer bill will increase on the basis of the
Landlord’s reasonable determination of the Tenant’s usage of same.


 


(b)           Tenant’s
pro rata share of the country solid waste recycling fee paid by the Project for
solid waste hauled from the Project shall be an amount equal to the product of (1) the
total solid waste recycling fee paid by the Project for the period in question,
multiplied by (2) a fraction having as its numerator the volume of all
trash dumpsters at the Premises picked up during the period in question and as
its denominator the volume of all trash dumpsters at all buildings in the
Project picked up during the same time period; provided, however, if the County
allocates a separate and specific amount to the Tenant’s share of the solid
waste recycling fee under this subparagraph. 
For purposes of this paragraph, the volume of a trash dumpster picked
during a billing period will be determined by multiplying the capacity of the
trash dumpster in cubic yards by the number of times such trash dumpster is
picked up during the billing period, whether or not such trash dumpster was
filled to capacity at the time it was picked up.  It is acknowledged by the parties that the
Tenant shall provide the Tenant’s own trash dumpsters and shall pay for the
hauling of trash therefrom.


 


4

















 


(c)           Without
the express prior written consent of the Landlord (pursuant to any written
amendment to this Lease signed by both parties), the Tenant agrees that it will
not wash machinery within the Premises.


 


B.            Except
to the extent such utilities are in the future separately metered and billed to
the Tenant directly, Landlord shall bill Tenant as soon as practicable the
monthly charges for the utilities associated with the Leased Area and the use
of the fixtures located therein.  All
monthly utility charges paid more than Thirty (30) day after receipt of an
invoice from the Landlord shall be subject to a late penalty of five percent
(5%) of the amount of such payment.


 


C.            If the
parties are unable to agree upon Tenant’s usage of utilities, Tenant shall have
the option either (i) to install, at Tenant’s expense, separate meters or
submeters, or (ii) to cause Landlord to employ (not more than once each
Lease Year) a mutually acceptable engineering firm, whose fess will be equally
shared by Landlord and Tenant, to determine Tenant’s share of utilities
consumed in the Project by usage survey. 
Tenant will be responsible for the maintenance of separate meters or
sub-meters.  Until any such engineering
firm determines Tenant’s share of any disputed utility charges, the Tenant
agrees to reimburse all amounts invoiced by the Landlord based on the Landlord’s
estimate of Tenant’s share of utility charges.


 


D.            Landlord
will cause the lawns in the Project to be cut periodically.  Tenant will reimburse Landlord for the
portion of the cost of cutting and trimming all lawns in the Project
attributable to the Premises.  Tenant’s
pro rata portion of the cost of cutting and trimming all lawns in the Project
shall be an amount equal to the product of the total cost of cutting and
trimming all lawns in the Project multiplied by a fraction having as its numerator
the square footage of Building No. 6 and as its denominator the square
footage of all buildings in the Project (to-wit: 570,000 square feet);
provided, however, the Tenant’s proportionate share of such cost of cutting and
trimming during any Lease Year will not increase by more than twenty (20%)
percent over the prior Lease Year.


 


5.             ADDITIONAL
RENT/TAXES AND FEES.


 


A.            If the
Premises are not a separate tax parcel, Landlord shall pay, prior to
delinquency, all “Impositions” (hereinafter defined) which are levied, imposed,
or assessed upon or against the Premises and Project.  Tenant covenants to pay to Landlord, as
additional rent, on or before the later to occur of (a) thirty (30) days
after receipt of an invoice therefore or (b) thirty (30) days before the
day a fine, penalty, interest or cost may be added thereto for the non-payment
thereof, Tenant’s pro rata share determined by multiplying all the Impositions
for the Project by a fraction having as its numerator the same footage of the
Building and as its denominator the total square footage of all buildings in
the Project (such pro rata share being 15.86% as of the date of the anticipated
completion of the Building).


 


(i)            If the
premises is separately assessed and billed, such impositions shall be paid
prior to delinquency by the Tenant directly to the taxing authorities.  Tenant shall furnish to Landlord, promptly
after payment of any Impositions paid directly to taxing authorities, official
receipts or other satisfactory proof evidencing payment of such Imposition.


 


5

















 


(ii)           As used
here, the term “Impositions” shall include any
form of real estate tax or assessment, general, special, ordinary or
extraordinary, and any license fee, or commercial rental tax base don the gross
rents paid hereunder, improvement bond or bonds issued by Commencement Date of
this Lease, levy or tax imposed on the Premises by any authority having the
direct or indirect power to tax, including any city, state or federal government,
or any school, agricultural, sanitary, fire, street, drainage or to the
improvement district thereof, as against any legal or equitable interest of
Landlord’s right to rent therefrom (provided such tax is assessed on gross
rents payable hereunder), and as against Landlord’s business of leasing the
premises (provided such tax is assessed on gross rents payable hereunder).  With respect to any assessment which under
the laws then in force may be paid in installments, there will be included
within the meaning of the term “Impositions” for any tax fiscal year only the
current annual payment.  Impositions will
not include (i) any franchise, gift, estate, inheritance, conveyance,
transfer, or other tax assessed against Landlord or Landlord’s heirs,
successors or assigns, or (ii) any income excess profit or other tax,
assessment, charge or levy on the net rent payable by Tenant under this Lease.


 


(iii)          Tenant
shall pay prior to delinquency all taxes assessed against and levied upon trade
fixtures, furnishings, equipment, machinery, inventory and all other personal
property of Tenant contained in the Premises or elsewhere. When possible,
Tenant shall cause such trade fixtures, furnishings, equipment and other
personal property to be assessed and billed separately from the real property
of Landlord. If any of Tenant’s personal property shall be assessed with
Landlord’s real property, Tenant shall pay Landlord the taxes attributable to
Tenant within thirty (30) days after receipt of a written statement setting
forth the taxes applicable to Tenant’s property, together with a copy of the
taxing authority’s billing to Landlord.


 


(iv)          All Impositions for the partial tax fiscal
years falling within the Term will be prorated by multiplying the amount of
Impositions for the partial tax fiscal year falling within the Term by a fraction having as its numerator the
number of days in such tax fiscal year falling within the Term and having as
its denominator the number “365”.


 


(v)           Tenant will have the right to contest the
amount or validity of Impositions by appropriate administrative and legal
proceedings brought either in Tenant’s name, Landlord’s name or jointly with
Landlord, as Tenant may deem appropriate, by counsel selected and engaged by
Tenant. Landlord will execute and deliver to Tenant whatever documents may be
reasonable, necessary and proper to permit Tenant to contest Impositions or
which may be reasonably necessary to secure payment of any refund which may
result from any such proceedings. Tenant agrees to reimburse Landlord for any
expenses or additional costs assessed to, or incurred by, Landlord in the event
Tenant contests the amount or validity of Impositions. Any refund resulting
from a proceeding brought either by Tenant or Landlord or by them jointly will
be applied first to reimburse the party or parties who brought the proceeding
for the costs incurred with the proceeding (including any reimbursement by
Tenant to Landlord described above), with the remainder being distributed, to
Tenant if the Premises is a separate tax parcel or on a pro-rata basis
(determined in the manner described in Subsection 5A above). to
each of tenants in the Project, if the Premises is not a separate tax parcel.


 


B.            Tenant
shall, in addition to the monthly Base Rent and pro rata portion of Impositions
referred to above, also be responsible for Tenant’s pro rata portion of all
expenses 


 


6

















 


incurred
by Landlord for (i) grounds maintenance (landscaping), (ii) twenty-four
hour controlled vehicular access (through the gate adjacent Building No. 4)
to the Project with on-site personnel, and (iii) other Common Area
maintenance and utility charges such as lighting and maintenance for internal
streets and parking facilities (collectively, “Common
Area Charges”). Tenant’s pro rata portion of Common Area Charges
shall be an amount equal to the product of the total Common Area Charges for
the Project multiplied by a fraction having as its numerator the square footage
of the Building and as its denominator the square footage of all buildings in
the Project.


 


(i)            Common
Area Charges will not include Impositions (unless the Premises is a
separate tax parcel), cost of capital improvements or repairs (provided such
repairs cannot be attributed to Tenant), including, without limitation, cost of
constructing leasehold improvements for any other lessee of Project, legal or
brokerage fees associated with any other lease for space in Project, cost of
advertising by Landlord, management fees, whether payable to Landlord or third
parties, so-called “administrative charges” or other add-ons to the total of
Common Area Charges, principal or interest on debt or amortization payments on
any mortgages or deeds of trust or any other debt for borrowed money and
amortization of improvements, depreciation of Landlord’s original investment in
Project, amounts paid by Landlord to affiliates of Landlord for services in
connection with the Common Areas, but only to the extent that any such fees are
in excess of the ordinary and reasonable fees paid in arms’ length
transactions.


 


(ii)           Tenant’s
pro rata share of Common Area Charges (on an annualized basis) will not
increase in any one calendar year after the first full calendar year of the
Term by more than six percent (6%) of Tenant’s pro rata share of Common Area
Charges for the previous full calendar year.


 


(iii)          Tenant’s
accountants will have the right upon reasonable advance notice to inspect, at
reasonable times and in a reasonable manner, such of Landlord’s books of
account and records as pertain to Common Area Charges.


 


(iv)          Once
each calendar year, Landlord shall deliver a statement (“CAM
Statement”) to Tenant showing: the amount of actual Common Area
Charges for the preceding calendar year, with a breakdown of amounts by major
categories of Common Area Charges and Tenant’s pro rata share and the detail
for determining same. Within thirty (30) days of the receipt of the CAM
Statement, Tenant shall pay Landlord Tenant’s share of any deficiency in
payments made by the Tenant during the preceding calendar year of Tenant’s
proportionate share of the Common Area Charges; the Tenant shall be entitled to
a credit in the next invoice for monthly Base Rent becoming due and payable
following the receipt of the CAM Statement for any excess payments of Common
Area Charges made by the Tenant during the preceding calendar year.


 


(v)           If
the Term commences other than on January 1, or ends other than on December 31,
Tenant’s obligations to pay amounts toward Common Area Charges for such partial
calendar years will be prorated on the basis of the portion of such calendar
years included in the Term. Such proration shall be made by multiplying the
total Common Area Charges for the partial calendar year in question by a
fraction having as its numerator the number of days of the Term within the
partial calendar year, and as its denominator “365”.


 


7

















 


(vi)          The
term “Common Areas” as used in
this Lease means the roadways of the Project (or any substitute therefore) and
the common parking areas - - all as shown on Exhibit B. Landlord
hereby grants to Tenant and Tenant’s customers, invitees and employees for the
entire Term, the non-exclusive right to use, in common with Landlord, Landlord’s
invitees and employees and with the other lessees and occupants of Building and
their respective customers, invitees and employees, the Common Areas for their
intended purposes, subject to reasonable rules and regulations (“Rules and Regulations”) to be promulgated by Landlord
for the convenience and safety of all of the lessees, occupants and users of
the Building; provided, Tenant shall be solely responsible for, and defend,
hold harmless and indemnify the Landlord and its agents and employees from, any
damage for injury caused within the Common Areas and anywhere else within the
Project by any of Tenant’s employees and invitees. Landlord will have the right
to make reasonable modifications and additions to the Rules and
Regulations from time to time. The Tenant shall cause its employees and
invitees using the Premises to park in the common area parking lots designated
in the Building No. 2 Lease.


 


(vii)         During the Term, the Landlord will maintain
the Common Areas in reasonable order; provided, however, the Tenant shall cause
its employees, customers, agents and invitees to keep the Common Areas in neat,
clean, trash free and orderly condition, ordinary wear and tear excepted. If
the necessity for repairs to or cleaning of any Common Areas shall have arisen
from or shall have been caused by the negligence or willful acts of the Tenant,
its agents, concessionaires, officers, employees, licensees, invitees or
contractors, Landlord may make or cause the same to be made, but shall not be
obligated to do so, and Tenant agrees to pay to Landlord promptly upon Landlord’s
demand, the cost of such repairs and/or cleaning, if made.  In
the event Landlord elects not to make such repairs or cleaning, Landlord may
require Tenant perform such at Tenant’ s sole cost and expense. Notwithstanding
anything contained in this Lease to the contrary, nothing contained in this
Lease shall obligate the Landlord to provide security to or within the Common
Areas or to protect the Tenant or its employees and invitees from acts and
actions of employees and invitees of other tenants within the Project or of
other third parties occurring within or upon the Project (of which the Premises
and the Common Areas are a part).


 


(viii)        Landlord
shall have the right, at Landlord’s sole cost and expense, to relocate, change,
move or alter the Common Areas, so long as 24-hour ingress to and egress from
the Premises is not materially disturbed.


 


6.             GENERAL
ASSISTANCE.  The
Tenant shall have the right (i) to seek tax, utility and other abatements
and economic development incentives covering the Premises (such as, for
example, fee in lieu of real estate and personal property taxes, job
development credits, grants for improvements by the Tenant to the Premises)
(collectively, “Abatements and Incentives”), and (ii) to
contest the amount or validity of Impositions covering the Premises by
appropriate administrative and legal proceedings - - both (i) and (ii) above,
brought either in Tenant’s name, Landlord’s name or jointly with Landlord, as
Tenant may deem appropriate, by counsel selected and engaged by Tenant.
Landlord will execute and deliver to Tenant whatever documents may be
reasonably requested by the Tenant to permit the Tenant to seek such Abatements
and Incentives and to 


 


8

















 


contest Impositions or which may be necessary
to secure payment of any refund which may result from any such proceedings, and
Landlord hereby agrees to cooperate as reasonably requested by the Tenant in
such endeavors by executing such documents as reasonably requested by the
Tenant. Tenant agrees to pay to or promptly reimburse Landlord for any expenses
incurred by Landlord with regards to or in connection with assisting the Tenant
under this Paragraph 6 in the event Tenant seeks Abatements and Incentives
and/or contest the amount of validity of the amount of Impositions covering the
Premises. Any refund of amounts previously paid by the Tenant to the Landlord
resulting from a proceeding brought by the Tenant under this Section 6
(either in the name of Tenant or Landlord or in both names) will be applied
first to reimburse the party or parties who brought the proceedings for the
costs incurred with the proceeding (including any reimbursement for costs paid
by Tenant to Landlord described above), with the remainder being distributed to
the Tenant until the Tenant has been reimbursed in full for such amounts
previously paid by the Tenant, with the balance, if any, paid to the Landlord.


 


7.             USE.


 


A.            Tenant
shall use the Premises for office, warehouse and carpentry space.  Tenant shall at its own cost and expense
obtain any and all licenses and permits necessary for any such use. Tenant
shall not permit any objectionable or unpleasant odors, smoke, dust, noise or
vibrations to emanate from the Premises, nor take any other action that would
constitute a nuisance or would disturb or endanger the Landlord or any other
tenants or occupants of the Project or unreasonably interfere with their use of
the Project. Tenant shall not receive, store or otherwise handle any product,
material or merchandise which is explosive or highly flammable, except as
strictly permitted under Laws.


 


B.            Tenant shall not commit or suffer to be
committed any waste upon or about the Premises, the Common Areas, the Project,
and the Building.


 


8.             COMPLIANCE WITH
LAWS AND GOVERNMENTAL REGULATIONS.


 


A.            Tenant
shall at all times during the Term be in full compliance with any and all
federal, state and local governmental rules and regulations, ordinances
and similar provisions having the force and effect of law (collectively, “Laws”) which are or would be applicable to the business
being conducted in the Premises. In particular, all machinery and
equipment installed within the Premises shall be used, maintained and operated
by the Tenant in full compliance with all laws, rules and regulations of
the State of South Carolina and the United States Federal Government and their
respective agencies. In addition and for clarification, the Tenant, at its sole
cost and expense, must obtain all necessary or required permits,
authorizations, and licenses from appropriate governmental agencies to conduct
its business within or about the Premises.


 


B.            Tenant
shall be obligated to make any alterations, repairs or improvements to the
Common Areas that are necessary because they relate primarily to the occupancy
or use of Tenant or Tenant’s business in the Premises.


 


9

















 


9.             MAINTENANCE AND
REPAIR.


 


A.            Tenant
will, at its sole cost and expense, maintain the entire Premises and make
repairs, restorations, and replacements to the Building and Premises,
including, without limitation, the heating, ventilating, air conditioning,
mechanical, electrical, and plumbing systems, interior walls, and the fixtures
and appurtenances to the Building to be constructed thereon by Tenant and when
needed to preserve them in good working order and condition and regardless of
whether the repairs, restorations, and replacements are ordinary or
extraordinary, structural or non-structural, foreseeable or unforeseeable, or
the fault or not the fault of Tenant, its agents, employees, invitees,
visitors, or contractors. All such repairs shall he made in a first-class
manner and quality.


 


B.            In the
event Tenant fails to repair the Premises in accordance herewith for a period
of thirty (30) days after written notice from Landlord, Landlord may, but shall
not be required to, make such repairs at the Tenant’s expense; provided,
however, in the case of an emergency, Landlord shall not be required to provide
prior written notice to Tenant, but shall use its best efforts to notify the
Tenant by telephone prior to making any such emergency repairs. Tenant shall
then reimburse Landlord for the reasonable cost of any such repairs as
additional rent within fifteen (15) days of receipt of an invoice for the same
from Landlord.


 


C.            In
addition to the foregoing, Tenant shall, at its expense, keep the Premises,
including all driveways, parking areas and sidewalks, clean and free from
debris, rubbish and other trash and shall store all such debris, rubbish and
trash in appropriate receptacles. Tenant shall arrange for regular pickup of
such debris, rubbish and trash at its expense. Tenant shall not operate an
incinerator or burn any debris, rubbish or trash on the Premises.


 


D.            Tenant
expressly acknowledges and agrees that the Landlord shall have no maintenance,
repair or replacement obligations with respect to the Premises.


 


10.           CHANGES, ALTERATIONS
AND NEW CONSTRUCTION BY THE TENANT.


 


A.            Tenant
shall make no structural alterations, changes, additions or improvements
(individually, an “Alteration” or
collectively “Alterations”) in or to the
Premises without Landlord’s prior written consent. (See Section 1C related
to the Landlord’s approval of -the final plans and specifications of the
Building.) In the event of Landlord’s consent, any such Alteration(s) shall be
subject to the following:


 


(i)            Any
Alteration shall be at the cost and expense of Tenant and shall be made
promptly, in a good workmanlike manner, and in full compliance with all
applicable permits, authorizations, building and zoning laws, and any other
applicable statute, rule or regulation of any governmental agency or
authority having jurisdiction there over.


 


(ii)           Any such
Alteration shall at the expiration of Term become the property of the Landlord.
For clarification, the Building, including, without limitation, the Building
(including any partitions, carpets, lighting fixtures, doors, and ceilings
therein) and any fences shall remain with the Premises and shall be surrendered
to Landlord at the expiration or 


 


10

















 


earlier termination of this
Lease; provided, however, Tenant shall specifically have the right to remove
its trade fixtures and equipment and other temporary improvements, alterations
and additions it made to the Building including, but no limited to, cabinets,
shelves and modular systems that may be attached to walls or floors provided
the Tenant repairs any damage to the Premises as a result of the installation
or removal of the same.


 


B.            It is
understood that Tenant intends to install equipment and machinery within the
Premises, which Tenant shall remove at the termination of this Lease. Tenant
shall repair any damage to the Premises caused by the installation and/or
removal of Tenant’s machinery, fixtures and movables.


 


C.            No work
which Landlord permits or requires Tenant to perform pursuant to this Lease,
whether in the nature of erection, construction, alteration or repair, shall be
deemed to be for the immediate use and benefit of Landlord so that no
materialmen’s, laborer’s, mechanic’s or other lien shall be alleged against the
estate of Landlord by reason of any consent given by Landlord to Tenant to
improve the Premises or the Project. Tenant shall pay promptly all persons
furnishing labor or materials with respect to any work performed by or for
Tenant in, on or about the Premises. In the event any mechanic’s or other lien
shall at any time be filed against the Project (of which the Premises are a part),
or any interest therein by reason of any labor, services or materials performed
or furnished, or alleged to be performed or furnished to or for the benefit of
Tenant or to anyone holding the Premises through or under Tenant. Tenant shall
cause the same to be discharged of record or bonded to the satisfaction of
Landlord (both as to form of documentation and as to surety company) within
thirty (30) days after notice of the filing thereof. If Tenant shall fail to
cause such lien to he so discharged or bonded within such thirty (30) days,
then in addition to any other right for remedy of Landlord, Landlord may, but
shall not be obligated to, discharge the same by paying the amount claimed to
be due or by deposit or bonding proceedings, and the amount so paid or pledged
by Landlord, including reasonable attorney’s fees and surety costs incurred by
Landlord procuring the discharge of such lien, together with interest thereon
at the rate of eighteen (18%) percent per annum or the highest amount allowed
by law, shall be immediately due and payable by Tenant to Landlord upon demand
as additional rent(s). Tenant shall indemnify, defend and save Landlord
harmless from and against any and all claims (including but not limited to
claims of unjust enrichment and claims based on quasi-contract), actions,
demands, damages, liability and expense, including attorney’s and other
professional fees, arising from or related to, wholly or in part, directly or
indirectly, any labor, services or materials performed or furnished or alleged
to be performed or furnished to or for the benefit of Tenant or to anyone
holding the Premises or the Project through or under Tenant, regardless of
whether such work or material improved or increased the value of the Premises
or the Project as a whole.


 


11.           INDEMNIFICATION.


 


Tenant agrees, to the extent not expressly
prohibited by law, to pay, and to protect, defend, indemnify and save harmless
Landlord from and against all liabilities, damages, costs, expenses (including
reasonable attorneys’ fees and expenses), causes of action, suits, claims,
demands or judgments (collectively, “Liabilities”) of any nature whatsoever
which may be imposed upon or incurred by or asserted against Landlord by reason
of (i) any accident, injury to or illness or death of any person, or any damage to property
occurring on the Premises during 


 


11

















 


the Term or while Tenant,
Tenant’s agents, employees, invitees or contractors or parties claiming through
Tenant are in possession of or conducting any activities on or within the
Premises (except to the extent caused by the negligence or willful misconduct
of Landlord), (ii) any accident, injury to, illness or death of any
person, or any damage to property arising out of the negligence or willful
misconduct of Tenant or Tenant’s agents, employees, invitees or contractors in
any portion of the Project outside the Premises during the Term, (iii) any
matter, act, action or inaction related to or concerning the construction of
the Building, and (iv) any failure by Tenant to perform or comply with any
of the terms of this Lease or of any contracts, agreements, restriction, or
laws affecting the Premises or any part thereof The obligations and liabilities
of the Tenant under this Section shall survive the Term of this Lease and
shall not be limited or diminished by the minimum limits of insurance required
by the Tenant under Section 12.


 


12.           INSURANCE.


 


A.            “All-Risk”
Coverage.  Throughout the Term,
Tenant will keep the Building insured under a property (all risks) insurance
policy in the amount of one hundred percent (100%) of the replacement cost.


 


B.            General
Liability.  Tenant will also maintain
from and after the date of this Lease and throughout the Term, comprehensive
general liability insurance against claims on account of bodily injury, death
or property damage incurred upon any part of the Premises. Such insurance
policy will have limits of not less than Three Million and No/100ths Dollars
($3,000,000) per occurrence, in respect to bodily injury or death and not less
than One Million and No/100ths Dollars ($1,000,000) per occurrence in respect
to property damage and provide contractual coverage of Landlord’s liability to
Tenant assumed under the indemnification provisions of this Lease. Landlord
shall be named as an additional insured under the insurance required under this
Section 12 and the Tenant shall deliver to Landlord a certificate
evidencing such insurance within ten (10) days of the execution of this
Lease and thereafter upon reasonable request. All insurance required of the
Tenant hereunder shall be primary and not excess with any insurance,
coinsurance or self insurance maintained by Landlord.


 


C.            Other
Matters. All insurance required in this Section 12 and all renewals thereof
will be issued by companies authorized to transact business in the State of
South Carolina, and reasonably acceptable to Landlord. All general liability
insurance policies will expressly provide that the policies will not be
canceled or altered without thirty (30) days’ prior written notice to Landlord.
Tenant may satisfy its obligations under this Paragraph by appropriate
endorsements of its blanket insurance policies.


 


D.            Additional
Insured. All policies of liability insurance that Tenant is obligated to
maintain according to this Lease (other than any policy of worker’s
compensation insurance) will name Landlord as an additional insured.
Original certificates of insurance or copies of the original policies (together
with copies of the endorsements naming Landlord as an additional insured) and
evidence of the payment of all premiums of such policies will be delivered to
Landlord prior to Tenant’s occupancy of the Premises and from time to time at
least thirty (30) days prior to the expiration of the term of each policy. All
public liability, property damage liability, and casualty policies maintained
by Tenant will be written as primary policies, not contributing with and not in
excess of coverage that Landlord may carry.


 


12

















 


E.             Waiver.
Tenant waives all rights to recover against Landlord or against the officers,
directors, shareholders, partners, joint venturers, employees, agents,
customers, invitees, or business visitors of Landlord for any property floss or
damage arising from any cause covered by any insurance required to be carried
hereunder. Tenant will cause its insurers to issue appropriate waiver of
subrogation rights endorsements to all policies of insurance it carries in
connection with the Premises or the contents thereof or the Project.


 


13.           DAMAGE AND DESTRUCTION BY CASUALTY.


 


A.            Damages
or Destruction.  Subject to
subsections 13 B and C below, if the Building or other improvements on the
Premises are damaged or destroyed by reason of fire, the elements, unavoidable
accident or any other casualty, Tenant will as soon as practicable at its
expense, repair or rebuild the Building and all improvements located on the
Premises to substantially the same design and condition as the Building and improvements
were in prior to such damage or destruction; Tenant will prosecute the repairs
or rebuilding to completion with due diligence, subject, however, to strikes,
lockouts, acts of God, embargoes, governmental restrictions, and other causes
beyond Tenant’s reasonable control; Tenant will obtain and deliver to Landlord
a temporary or final certificate of occupancy before the Premises are
reoccupied for any purpose. The repairs or rebuilding will be completed free
and clear of mechanics’ or other liens, and in accordance with the building
codes and all applicable laws, ordinances, regulations, or orders of any state,
municipal, or other public authority affecting the repairs or rebuilding, and
also in accordance with all applicable covenants, easements and restrictions
affecting the Premises and all requirements of the insurance rating
organization, or similar body, and of any liability insurance company insuring
against liability for accidents related to the Premises.


 


B.            Rent
Abatement.  If, as a result of a
casualty to the Building, any portion of the Building is rendered untenable and
unusable, the Base Rent shall be equitably suspended or abated for that portion
of the Building rendered untenable and unusable until the Tenant shall have
substantially completed the repairs to that portion of the wilding damaged by
such casualty.


 


C.            Damage
During Last Two Years. 
Notwithstanding the above provisions, if at any time during the last two
(2) years of the Term the Building is so damaged by fire or otherwise that
the cost of restoration exceeds fifty (50%) percent of the replacement value of
the Building (exclusive of foundations) immediately prior to the damage, Tenant
may, within thirty (30) days after such damage, give notice of its election not
to rebuild the Building and to terminate this Lease and, subject to the further
provisions of this paragraph, this Lease will cease as of the date of such
casualty if Tenant so elects to terminate this Lease. Rent will be apportioned
and paid to the time of termination. If this Lease is so terminated, Tenant
will have no obligation to repair or rebuild, but the entire insurance proceeds
will belong to Landlord; provided, however, Landlord shall have no interest or
claim to any insurance proceeds received for Tenant’s personal property, trade
fixtures, equipment or Tenant’s lost income or wages.


 


14.           CONDEMNATION.


 


A.            In the
event that at any time during the Term, title to the whole or materially all of
the Premises shall be taken by the exercise of the right of condemnation or
eminent domain or by agreement between the Landlord and those authorized to
exercise such 


 


13

















 


right, this Lease shall
terminate and expire on the date of such taking and the rent provided to be
paid by the Tenant shall be apportioned and paid to the date of such taking.


 


B.            Tenant,
at Tenant’s cost and expense, shall be entitled to separately claim, in any
condemnation proceeding, any damages payable for movable trade fixtures and
leasehold improvements paid for and installed by Tenant without any
contribution or reimbursement therefore by Landlord, and for Tenant’s loss of
business, and for Tenant’s relocation costs; provided Landlord’s award is not
reduced or otherwise adversely affected thereby.


 


15.           SUBORDINATION; NONDISTURBANCE


 


A.            Upon
Landlord’s written request, Tenant will execute and deliver to Landlord an
agreement in recordable form subordinating Tenant’s rights to the lien of any mortgage
hereafter encumbering the Premises. Tenant, however, will not be required to
subordinate Tenant’s rights hereunder to any mortgage unless and until the
holder of such mortgage executes and delivers to Tenant a written agreement
providing in substance (i) that so long as Tenant faithfully discharges
Tenant’s obligations under this Lease, Tenant’s right of possession to the
Premises and other rights under this Lease will not be affected by any default
by Landlord under any instrument creating or secured by such mortgage, and (ii) that
in the event of foreclosure or any other enforcement of such mortgage, the
rights of Tenant hereunder will expressly survive and this Lease will continue
in full force and effect. If any mortgage, trustee or ground lessor shall elect
to have this Lease prior to the lien of its mortgage, deed of trust or ground
lease, and shall give written notice thereof to Tenant, this Lease shall be
deemed prior to such mortgage, deed of trust, or ground lease, whether this
Lease is dated prior or subsequent to the date of said mortgage, deed of trust
or ground lease or the date of recording thereof.


 


B.            Landlord
represents and warrants that no lien encumbers the Premises on the date of this
Lease.


 


16.           NONWAIVER.


 


Neither a failure by either party to exercise
any of its options hereunder, nor failure to enforce its rights or seek its
remedies upon any default, nor the acceptance by the Landlord of any rent
accruing before or after any default, shall effect or constitute a waiver of
such party’s right to exercise such option, to enforce such right, or to seek
such remedy with respect to that default or to any prior or subsequent default.


 


17.           QUIET ENJOYMENT.


 


If Tenant pays the rent Tenant is obligated
hereunder to pay, and observes all other terms, covenants and conditions
hereof, Tenant may peaceably and quietly have, hold and enjoy the Premises
during the Term, subject, however, to all the terms of this Lease.


 


18.           ASSIGNMENT AND
SUBLETTING.


 


A.            Tenant
shall not sublet the Premises, nor any part thereof, nor assign, or otherwise
dispose of this Lease or any interest therein, or any part thereof, without
Landlord’s prior written consent in each of the foregoing cases, which consent
shall not be unreasonably 


 


14

















 


withheld or delayed. Landlord’s
disapproval of a proposed assignee or sublessee will be considered reasonable
if the proposed assignee or sublessee is not of a generally comparable quality
with Tenant, if the proposed use of the Premises is not compatible with the
Premises, or if the proposed assignee or sublessee is not the same assignee or
sublessee, as the case may be, of the Building No. 2 Lease.


 


B.            Notwithstanding
the provisions of Section 18A hereof, Tenant may assign or sublet
the Premises, or any portion thereof, without Landlord’s consent but with prior
written notice to the Landlord, to any corporation that controls, is controlled
by or is under common control with Tenant, or to any corporation resulting from
the merger or consolidation with Tenant, or to any person or entity that acquires
all the assets of Tenant as a going concern of the business that is being
conducted on the Premises. Tenant and any guarantor of the obligations of
Tenant under this Lease shall remain liable despite any assignment or sublease
of this Lease by Tenant pursuant to this Section 18.


 


19.           ENTRY.


 


Landlord, and any mortgagee, and their
respective duly authorized representatives shall have the right to enter the
Premises at all reasonable times for the purposes of inspecting the conditions
of same, and making such repairs, alterations, additions, or improvements
thereto as may be necessary or desirable if Tenant fails to do so as required
hereunder (but the Landlord shall have no duty whatsoever to make any such
inspections, repairs, alterations, additions, or improvements).


 


20.           DEFAULT.


 


A.            The
following shall be defined and deemed as an “Event of Default” by Tenant: (i) if
Tenant shall default in the payment of the Base Rent or any additional rent,
utility charges (referenced in Section 4), and amounts due the Landlord
under Section 5, and in any other section of this Lease, and if
Tenant shall fail to cure said default within fifteen (15) days after receipt
of notice of such default from Landlord; or, (ii) if Tenant shall default
in the performance or observance of any other material term, covenant or
condition to be performed or observed by Tenant under this Lease and if Tenant
shall fail to cure said default within thirty (30) days after receipt of notice
of said default from Landlord or if such default is of a nature which cannot be
corrected in thirty (30) days, if Tenant shall fail to commence to cure same
within thirty (30) days and thereafter diligently pursue such cure to
completion, or (iii) if an Event of Default (as that term is defined in
each of the Leases referenced in this subsentence (iii)) shall occur in the
Building No. 2 Lease.


 


(i)            In case
of any Event of Default hereinbefore provided the Landlord shall have the
immediate right of reentry and may remove all persons and property from the
Premises by summary proceedings, force or otherwise. No such reentry or taking
possession of the Premises by Landlord shall be construed as an election on
Landlord’s part to terminate this Lease unless a written notice of such
intention to be given to Tenant or unless the termination thereof be decreed by
a court of competent jurisdiction.


 


15

















 


(ii)           In
addition, in the event of any Event of Default (whether or not Landlord shall
elect to re-enter or to take possession pursuant to legal proceedings or
pursuant to any notice provided for by laws), Landlord shall have the right, at
Landlord’s option,


 


1)             to
terminate this Lease on not less than two (2) days’ notice to Tenant and
upon the giving of said notice, is Lease and the term hereof shall cease and
expire on the date set forth in said notice as if said date were the expiration
originally set forth herein, or


 


2)             to
relet the Premises or any part(s) thereof for such term or terms (which may
extend beyond the Term) and at such rental(s) and upon such other terms and
conditions as Landlord in Landlord’s sole discretion may deem advisable.
Landlord shall have the right from time to time to make such alterations and
repairs as may be reasonably necessary in order to relet the Premises. Upon
each such reletting all rentals received by the Landlord from such reletting
shall be applied, first, to the payment of any indebtedness (other than rents
due hereunder) of Tenant to Landlord, second, to the payment of any costs and expenses
of such reletting, including, without limitation, reasonable attorneys’ fees
and of the cost of such alterations and repairs, third, to the payment of rents
due and unpaid hereunder; and the residue, if any, shall be held by Landlord
and applied in payment of future rents and other payments required to be made
by Tenant hereunder as the same may become due and payable hereunder, with the
right reserved to Landlord to bring such action(s) or proceeding(s) for the
recovery of any deficits remaining unpaid without being obliged to await the
end of the term for a final determination of Tenant’s account, and the
commencement or maintenance of any one or more actions for further accruals
pursuant to the provisions of this Section. If such rentals to be paid during
that month by Tenant hereunder, Tenant shall pay any such deficiency to
Landlord. Such deficiency shall be calculated and paid monthly subject to
Landlord’s right of action(s) or proceeding(s) as aforesaid. Notwithstanding
any such reletting without termination, Landlord may at any time thereafter
elect to terminate this Lease for such previous breach.


 


(iii)          Should
Landlord at any time terminate this Lease for any breach, in addition to any
other remedies Landlord may have, Landlord may recover from Tenant all damages
Landlord may incur by reason of such breach as damages for loss of the bargain
and not as a penalty, including the cost of recovering the Premises, reasonable
attorneys’ fees, and including the present value determined by using a discount
rate of eight percent (8%), at the time of such termination, of the excess if
any, of the amount of rental and charges equivalent to rental reserved in this
Lease for the remainder of the Term, over the aggregate rental value of the
Premises for the remainder of such time, all of which shall be immediately due
and payable from Tenant to Landlord. If any laws shall validly limit the amount
of the damages provided for in the immediately preceding sentence to less than
the amount above agreed upon, Landlord shall be entitled to the maximum amount
allowable under such laws.


 


(iv)          Landlord
shall use reasonable efforts to mitigate its damages after a default by Tenant.


 


B.            Landlord shall not be in default unless
Landlord fails to perform obligations required of Landlord within a reasonable
time, but in no event later than thirty (30) days after written notice by
Tenant to Landlord and to the holder of any first mortgage or deed of 


 


16

















 


trust covering the Premises
whose name and address shall have theretofore been furnished to Tenant in
writing, specifying wherein Landlord has failed to perform such obligation;
provided, however, that if the nature, of Landlord’s obligation is such that
more than thirty (30) days are required of performance then Landlord shall not
be in default if Landlord commences performance within such 30-day period and
thereafter diligently prosecutes the same to completion. In the event Landlord
fails to discharge any obligation set forth in this Lease on or before the date
such obligation or payment is due, Tenant may, at Tenant’s option, discharge
such obligation. Tenant shall use reasonable efforts to mitigate its damages
after a default by the Landlord. In the event Tenant elects to discharge
Landlord’s obligation(s), Landlord agrees to reimburse Tenant on demand for the
amount of expenses incurred by Tenant.


 


21.           ENVIRONMENTAL
PROVISIONS.


 


A.            For the
purposes of this Section 21, the following shall have the
respective meanings set forth below:


 


(i)            “Hazardous
Material” means any substance, material or waste which is regulated by any
applicable governmental authority of the United States or the State of South
Carolina, including without limitation, any material, substance or waste which
is defined as “hazardous”, “hazardous waste”, “hazardous material”, “hazardous
substance”, “extremely hazardous waste”, “restricted hazardous waste”, “pollutant”,
“contaminant”, “toxic substance” or “toxic waste” under any provision of any
applicable Environmental Law, and includes, but is not limited to, petroleum,
petroleum products, asbestos, urea formaldehyde and polychlorinated biphenyls.


 


(ii)           “Hazardous
Materials Contamination” means any disposal, transportation, storage, arranging
of disposal, spillage, discharge, emission, leakage, release or threatened
release of any Hazardous Materials at, in, on, under, from, about, or affecting
the soil, air, water, fixtures, personal property, animals or buildings.


 


(iii)          “Environmental
Condition” means any unlawful environmental condition, event or circumstance.


 


(iv)          “Damages”
means all demands, claims, actions, assessments, losses, damages, liabilities,
costs and expenses of every nature (including, without limitation, reasonable
attorneys’ fees, fines, penalties and costs of settlements of any kind), known
or unknown, foreseen or unforeseen, contingent or otherwise.


 


(v)           “Landlord-Related
Party” means an employee, agent, contractor, licensee, customer, invitee or
affiliate of Landlord, but specifically excludes Tenant and any other lessee or
tenant of the Project. “Tenant-Related Party” means an employee, agent,
contractor, licensee, customer, invitee or affiliate of Tenant but specifically
excludes Landlord.


 


B.            Landlord
shall defend, indemnify, protect and hold Tenant harmless against Damages
resulting from or arising out of the following Hazardous Materials
Contamination or Environmental Conditions:


 


17

















 


(i)            existing
or occurring within the Premises on or before Tenant takes occupancy of the
Premises or after the expiration or early termination of the Lease Term but
only to the extent not caused by Tenant or a Tenant-Related Party; or


 


(ii)           existing
or occurring within the Premises or any other portion of the Project and caused
by Landlord or a Landlord-Related Party.


 


C.            Tenant
shall defend, indemnify, protect and hold Landlord harmless against all Damages
resulting from or arising out of Hazardous Materials Contamination or
Environmental Conditions existing or occurring within the Premises or any other
portion of the Project and caused by Tenant or a Tenant-Related Party, but only
to the extent not caused by Landlord or a Landlord-Related Party.


 


D.            The
Tenant shall store and handle Hazardous Materials at the Premises or at the
Project in strict compliance with applicable laws, rules and regulations,
and shall indemnify, defend and save harmless the Landlord from all Damages
arising out of or in any way connected with Tenant or Tenant-Related Party’s
storage or handling of Hazardous Materials. In no event shall Tenant’s handling
or storage of Hazardous Materials in compliance with applicable laws make
Tenant liable for Hazardous Materials Contamination or Environmental Conditions
in existence or occurring on or before Tenant takes occupancy of the Premises.
In particular, the Tenant shall take extra precaution not to allow Hazardous
Materials or any other material to wash into the drains of the Wash Area (which
lead to the oil/water separator system) except as specifically permitted under
all required permits and licenses and as intended for the Project’s oil/water
separator system.


 


E.             The
obligations and liabilities of both parties under this Section 21
shall survive the Term of this Lease.


 


F.             The
failure by either party to abide by the terms of this Section 21
shall be restrainable by injunction.


 


22.           SURRENDER OF TENANT.


 


A.            Tenant
will surrender possession of the Premises and remove all goods and production
equipment and other personal property owned by Tenant at the end of the Term,
or at such other time as Landlord may be entitled to reenter and take
possession of the Premises pursuant to any provision of this Lease, and Tenant
shall leave the Premises broom clean and in good order and condition, ordinary
wear and tear excepted, except in the event of termination due to fire or other
casualty pursuant to Section 13 or termination due to condemnation
pursuant to Section 14. Tenant shall deliver to Landlord all keys,
locks and other fixtures connected with the Premises (such fixtures shall
include, but are not limited to: cranes, doors (interior and exterior), HVAC
units, roof fans, truck doors, truck, truck docks, and lights) in good repair,
order and condition. In default of such surrender of possession and removal of
goods and chattels at the time aforesaid, Tenant will pay to Landlord the rent
set forth in this Lease for such period as Tenant either holds over possession
of the Premises or allows Tenant’s goods and production equipment or other
personal property at such time to remain in the Premises, and in addition
thereto, statutory penalties and all other damages which Landlord shall suffer
by reason of 


 


18

















 


Tenant’s holding over in
violation of the terms and provisions of this Lease, including, without
limitation, all reasonable claims for damages made by any succeeding tenant or
purchase of the Premises against Landlord which may be founded upon delay by
Landlord in giving possession of the Premises to such succeeding tenant or
purchaser, so far as such damages are occasioned by the unlawful holding over
of Tenant.


 


B.            Tenant
shall have the absolute right to remove all of Tenant’s goods, production
equipment, and other personal property from the Premises at any time during the
Term.


 


C.            Tenant
shall be responsible for the clean-up and removal of all raw materials,
packaging, solid waste, unused and used lubricants, oils, solvents and any
hazardous wastes placed, abandoned or located on the Premises and the area surrounding
the Premises by Tenant (or any of Tenant’s employees, agent, invitees or
subcontractors) during the teen hereof.


 


D.            As of the Commencement Date, there exist four (4) railroad tracks which cross a portion of
the Premises as shown on Exhibit A. At the request of the Tenant,
the Landlord has agreed to allow the Tenant, at its sole cost and expense, to remove those
portions of the four (4) railroad tracks crossing the Premises; provided,
however, at least thirty (30) days prior to the expiration or termination of
the Lease, the Tenant, at its sole cost and expense (without contribution from the Landlord), shall (i) install
crossties along current location of the existing railroad tracks to be removed,
(ii) reinstall the railroad tracks removed by or on behalf of the Tenant
in the same location of the existing tracks; and (iii) in general, will place the railroad tracks removed by the Tenant in good,
operative condition. For clarification and avoidance of doubt: (f) Tenant
shall cause the work of re-installing the ties and tracks to be performed in
good and workmanlike manner by duly qualified and licensed contractors, using
first-grade materials, and in full compliance with all local, state and federal
applicable laws, rules, regulations and ordinances; and (ii) for purposes
of Section 10A(i) and Section 10C of the Lease, the
re-installation of the tracks to operational condition shall be considered an “Alteration.”


 


E.             The
liability and the obligations of Tenant under this Section shall survive
the termination of this Lease.


 


23.           FORCE MAJEURE.


 


In the event
that Landlord or Tenant shall be delayed or hindered in or prevented from the
performance or any act (other than either party’s monetary obligations), by
reason of strikes, lockouts, unavailability of materials, failure of power,
restrictive governmental laws or regulations, riots, insurrections, war or
other reason beyond its reasonable control, then performance of such act shall
be excused for the period of the delay and the period for the performance of
such act shall be extended for a period equivalent to the actual period of such
delay. Notwithstanding the foregoing, lack of funds shall not be deemed to be a
cause beyond the reasonable control of either party.


 


24.           SECURITY DEPOSIT.


 


No security deposit shall be required.


 


19

















 


25.           COMMISSIONS.


 


Both Landlord and Tenant acknowledge that no
real estate broker is involved with respect to this Lease and the negotiations
thereof. Both parties agree to hold each other harmless from any claims for
commissions arising out of this Lease.


 


26.           ESTOPPEL
CERTIFICATE.


 


At any time and from time to time Landlord
and Tenant each agree, upon request in writing from the other, promptly to
execute, acknowledge and deliver to the other or to any person designated by
the other a statement in writing certifying that this Lease is unmodified and
is in full force and effect, or if there have been modifications, that the same
is in full force and effect as modified (stating the modifications), that the
other party is not in default in the performance of its covenants hereunder, or
if there have been such defaults, specifying the same, the dates to which the
Rent and other charges have been paid, and such other matters may be reasonably
requested.


 


27.           MISCELLANEOUS PROVISIONS.


 


A.            All
notices under this Lease shall be in writing and shall be deemed given if
delivered personally or by overnight courier or if sent by confirmed facsimile
transmitted during the regular business hours of the recipient, or when mailed,
postage prepaid, by registered or certified mail, return receipt requested,
addressed to the parties at their addresses as set forth below (or at such
other address as a party may from time to time designate by written notice
given in accordance with this Section):


 


	
  TO TENANT:

  	
   

  	
  TO LANDLORD:

  
	
   

  	
   

  	
   

  
	
  Force
  Protection, Inc.

  	
   

  	
  Aerospace/Defense, Inc.

  
	
  Force
  Protection Industries, Inc.

  	
   

  	
  4838 Jenkins
  Avenue

  
	
  9801 Highway
  78

  	
   

  	
  North
  Charleston, SC 29406

  
	
  Ladson, SC
  29456

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ATTN:

  	
  Raymond W.
  Pollard and

  	
   

  	
  ATTN: Jerry
  Zucker and Jerry Garfinkle

  
	
   

  	
  John F.
  Wall, III

  	
   

  	
  Fax No:
  (843) 747-4092

  
	
  Fax No:
  (843) 553-1311

  	
   

  	
   

  



 


B.            It is
the intention of the parties hereto to create the relationship of Landlord and
Tenant, and no other relationship whatsoever, and unless expressly otherwise
provided herein nothing herein shall be construed to make the parties hereto
liable for any of the debts, liabilities or obligations of the other party.


 


C.            This Lease shall be governed
exclusively under the laws of
the State of South Carolina. Each of the parties (i) irrevocably consents to the exclusive
jurisdiction of any state or
federal court located within Charleston County, South Carolina, and (ii) waives trial by a jury.


 


20

















 


D.            If any
term or provision of this Lease or the application thereof to any person or
circumstance shall, to any extent, be invalid or unenforceable, the remainder
of this Lease, or the application of such term or provision to persons or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby and each term and provision of this Lease shall be valid and
be enforced to the fullest extent permitted by law.


 


E.             Failure
on the part of either party to complain of any action or non-action on the part
of the other party, no matter how long the same may continue, shall never be
deemed to be a waiver by either party of any of its rights hereunder.
Acceptance by Landlord of the Base Rent or any other charges paid by Tenant
hereunder shall not be or be deemed to be a waiver by Landlord of any default
by Tenant, whether or not Landlord knows of such default. No waiver at any time
of any of the provisions hereof by either party shall be construed as a waiver
of any of the other provisions hereunder and a waiver at any time of any of the
provisions hereof shall not be construed as a waiver at any subsequent time of
the same provisions.


 


F.             Tenant
acknowledges and agrees that the submission of this Lease to Tenant for its
review and consideration shall not and does not constitute an offer to lease
the Premises. Tenant and Landlord understand and agree that there can be no
agreement for the lease of the Premises until all parties hereto have signed,
delivered and accepted this Lease.


 


G.            The
captions of the several Sections and Subsections of this Lease and any table of
contents are not a part of the context hereof and shall be ignored in
construing this Lease. They are intended only as aids in locating various
provisions hereof.


 


H.            Nothing
contained in this Lease shall be construed so as to confer upon any other party
the rights of a third party beneficiary except the rights contained herein for
the benefit of a mortgagee of the Landlord and except as provided in the
following Subsection (I).


 


I.              Except
as expressly otherwise provided herein, the terms, covenants and conditions
hereof shall inure to the benefit of and shall be binding upon Landlord and
Landlord’s successors and assigns and the terms, covenants and indentures
hereof shall inure to the benefit of and shall be binding upon Tenant and
Tenant’s successors, legal representatives, and permitted assigns.


 


J.             This
constitutes the entire and complete agreement between the parties with respect
to its subject matter. This Lease has been mutually negotiated by the parties
and no rule of construction shall be implied based upon the presumed
drafter or author of this Lease.


 


K.            This
Lease may only be amended by a writing specifically referencing this Subsection 27K
and duly executed by authorized officers for both parties.


 


21

















 


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


 


	
  IN THE PRESENCE OF:

  	
  Landlord:

  
	
   

  	
   

  
	
   

  	
   

  	
  AREOSPACE
  DEFENSE, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ M. Jerry
  Garfinkle

  	
   

  
	
   

  	
  Name:

  	
  M. Jerry
  Garfinkle

  	
   

  
	
   

  	
  Title:

  	
  Assistant
  Secretary

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  IN THE PRESENCE OF:

  	
  Tenant:

  
	
   

  	
   

  
	
   

  	
   

  	
  FORCE
  PROTECTION INDUSTRIES INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Raymond
  W. Pollard

  	
   

  
	
   

  	
  Name:

  	
  Raymond W.
  Pollard

  	
   

  
	
   

  	
  Title:

  	
  COO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  IN THE PRESENCE OF:

  	
  FORCE PROTECTION INC.

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Gordon
  R. McGilton

  	
   

  
	
   

  	
  Name:

  	
  Gordon R.
  McGilton

  	
   

  
	
   

  	
  Title:

  	
  CEO

  	
   

  
							



 


22