**Exhibit10.13**

 

**THIRD AMENDMENT TO LEASE**

 

THIS THIRDAMENDMENT 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 ProtectionIndustries, Inc.** and **Force Protection, Inc.**,Nevada corporations (collectively, the “**Tenant**”).

 

RECITALS

 

1.                                      Byindustrial Lease effective as of January 15, 2006, as amended by instrumentdated as of May 1, 2006, entitled “First Amendment to Lease” (“**First Amendment**”) and further amended by instrument dated asof July 1, 2006, entitled “Second Amendment to Lease” (“**SecondAmendment**”), the Landlord leased unto Tenant certain premises withinBuilding No. 1 situated in an industrial project (the “**Project**”)located in Ladson (Charleston County), South Carolina. The Industrial Lease asamended by the First and Second Amendments shall hereinafter be referencedcollectively as the “**Lease**.” By theexecution of this third Amendment, the parties intend to amend the Leaseaccording to the terms of Subsection 27K of the Lease. Each capitalized termused and not otherwise defined or modified herein shall have the meaningascribed thereto in the Lease.

 

2.                                      Atthe request of the Tenant, the Landlord has agreed to modify the term “**Premises**” under the terms, conditions and reservationshereunder as follows:

 

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

 

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

 

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

 

3.                                      (a)                                  3,540 square feet offloor 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 easternportion of A-Bay situated to the east of and adjacent to that portion of A-Baycurrently leased to Z-Man Fishing Products, Inc. and to the north of a portionof B-Bay

 

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

 

3.                                      (b)                                 10,620 square feet offloor 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 tothe 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 — tobecome a portion of the Leased Premises as of December 1, 2006;

 

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

 

3.                                      (d)                                 5,952 square feet offloor 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 — theLeased Area under this subparagraph (d) does not include a 7-foot wide strip offloor area adjacent to and running along the northern edge of the Machine Pitas shown on Exhibit C) — to become a portion of the Leased Area asof December 1, 2006.

 

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

 

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

 

For clarification, once all theadditional square footage referenced in subsections 2A1 through 2A5 above havebecome added to and a part of the Leased Area as hereinabove provided, thetotal square footage of Leased Area shall total 169,767 square feet (26,180square 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 squarefeet referenced in the Second Amendment and 70,507 square feet referencedabove).

 

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B.                                     ModifyingClause (ii) of Paragraph 1A to read as follows: . . (ii) the fixtures locatedtherein, including the Paint Spray Booth shown, and marked on Exhibit A as “**Paint**,” the Sandblast Booth shown and marked on Exhibit Aas “**Blast**,” 100 HP compressor and 75 HPcompress (the “**Compressors**”) and other machineryassociated with the Paint Booth, Sandblast Booth and Compressors as listed on ExhibitA-1, but excluding any overhead cranes located above Bay B, but includingthe use of (x) the radio controlled overhead/bridge crane located above thefloor area of Bay D (the “**D-Crane**”), (y) theradio 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.                                     ModifyingParagraph 1A by adding a new Clause “(iv)” to read as follows:

 

..., the “**Common Areas**” (hereinafterdefined), 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 andStoney Road and located to the east of the common parking areas) (the “**Entrance Road**”) running from a point adjacent thesoutheastern corner of the Building No. 3 common parking area and running in asoutherly direction for 500 feet to a point north of the location of theEntrance Road across which railroad tracks have been installed — shown as theredline on Exhibit F to this Amendment and marked “**VehicleBrake Test Track**” thereon (the “**Brake Test Area**”)and (z) an approximately 25 foot wide area running westerly from the EntranceRoad and continuing around the former pond area (on which pond area theLandlord is growing pine trees) — shown as the green line on Exhibit Fto this Amendment and marked “**FPII Vehicle ObstacleCourse**” thereon (the “**Obstacle Course Area**”).

 

The use by the Tenant of the Outdoor Testing Areas shall be subject toall of the terms, conditions and provisions of the Lease and this Amendment,especially including, without limiting the forgoing, those provisions containedin 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 withinthe definition of “Equipment” as that term is defined in Paragraph 1A of theLease. There are approximately 25 Jib Cranes (of one and two tons each) locatedthroughout Building No. 1. Tenant agrees not to remove any of the Jib Cranesfrom Building No. 1 without the prior written consent of the Landlord.

 

3.                                      Inconsideration 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 theLeased Area as hereinafter provided.

 

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4.                                      TheLandlord and Tenant now wish to enter into this Amendment to amend the Leaseaccording to the terms, provisions and conditions hereinafter set forth.

 

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

 

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

 

2.                                      Paragraph1 (The Premises), Section A, Clause (i) of the Lease is modified byadding to the definition of Leased Area 70,507 square feet according to Recital2A above for a total square footage of Leased Area in Building No. 1 of 169,767square feet.

 

3.                                      Paragraph1 (The Premises), Section A, Clause (ii) of the Lease is modifiedaccording to Recital 2B above.

 

4.                                      Paragraph1 (The Premises), Section A of the Lease is modified according toRecital 2C above.

 

5.                                      Paragraph4D and Paragraph 5A are hereby amended by amending the square footage of theLeased Area and the pro rata percentage share based on the square footage ofthe Leased Area.

 

6.                                      Paragraph5B(vi) of the Lease is modified by deleting the Hallways (shown on Exhibit Dto the Second Amendment) adjacent to the offices and restrooms (leased underthe 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 thisthird Amendment, the Tenant is now leasing the entire office area of BuildingNo. 1, such Hallways and Restrooms should not be included within the meaning ofCommon Areas.

 

7.                                      Paragraph5B is modified by adding the following subparagraphs after the existingsubparagraph (viii):

 

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

 

(x)                                 It is acknowledgedthat the Landlord is repaving the parking lot in front (north) of the officearea of Building No. 1 (the “**Front Parking Lot**”).It is understood that the Front Parking Lot is designed and constructed for theparking of automobiles and light-duty truck traffic (such as, for example, USPostal Service, Federal Express, and other light-duty delivery trucks). Noheavy vehicles (such as, for example, tractor trailer trucks and armor-platedvehicles) will be allowed on or within the Front Parking Lot.

 

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

 

8.                                      Notwithstandingany term or provision contained in this Amendment and the Lease, the Landlordreserves to itself and other occupants and tenants of Building No. 1 and theirrespective employees and invitees the non-exclusive access and rights ofingress and egress across, and use of, certain portions of the Premises asfollows:

 

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

 

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

 

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

 

9.                                      Foravoidance of doubt, the parties acknowledge and reaffirm Paragraph 1B of theLease (as well as the other terms and provisions thereof not inconsistent withthe terms and provisions of this Amendment) under which the Landlord makes norepresentations or warranty as to the condition of the Premises and the Tenantrepresents 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 toParagraph 2 of this Amendment and (b) the Brake Test Area and the ObstacleCourse Area (both of which comprise the Outdoor Testing Areas) and has foundthem satisfactory for all purposes hereof and the Tenant accepts the LeasedArea in their present condition, “As-Is.” It is contemplated that the Tenantwill renovate the office area referenced in Paragraph 2A(4) of the Recitalsincluding installing new carpeting and HVAC systems.

 

10.                                Paragraph3A (a) is amended so that the entire subsection (a) shall read as follows:

 

(a)                                  Forthe Leased Area –

 

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

 

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

 

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

 

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

 

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

 

(vi)                             From January 1, 2007through 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 asquare foot.

 

11.                                Paragraph9B of the Lease (Care and Maintenance of the Leased Area) is amended byadding the following to the existing paragraphs:

 

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

 

12.                                Paragraph9 (Maintenance and Repair) is amended by adding the followingsubparagraph D:

 

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

 

(a)                                  GeneralProvisions

 

(i)                                     TheTenant 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 promiseswhatsoever about the condition or compliance with law of the Outdoor TestingAreas. The Landlord shall not be required to take any action or make

 

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

 

(ii)                                  TheTenant shall use the Outdoor Testing Areas for the sole purpose of daylighttesting of vehicles that are manufactured within the Project and for no otherpurpose. Testing of its Vehicles shall occur only during daylight hours. Foravoidance of doubt, the Tenant shall not allow (a) any vehicles not manufacturedwithin 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 anysubstance (including, but not limited to, oil, grease, gasoline and similarsubstances (collectively “**Petroleum Products**”))within the Outdoor Testing Areas or any where else within the Project. It shallbe the responsibility of the Tenant to ensure that no spillage of PetroleumProducts 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 theTenant at its sole cost and expense shall promptly and diligently (untilcomplete) and in compliance with all applicable laws, clean and remediate anyarea of the Project contaminated by such spillage. For further clarification,nothing contained herein shall limit the provisions of Paragraph C of Section21 (Environmental Provisions) of this Lease.

 

(b)                                 BrakeTest Area. It shall be the sole responsibility of the Tenant to clearlydelineate the boundaries of the Brake Test Area and in this regards, the Tenantshall (i) ensure that its vehicles are tested only within the Brake Test Areaand not tested within any other area of the Project (with the sole exception ofthe Obstacle Course Area), (ii) prior to utilizing the Brake Test Area fortesting of its vehicles, install a gate across the Entrance Road at thestarting (northern) end of the Brake Test Area and other clearly-marked cautionbarriers so that those utilizing the Entrance Road and other parts of theProject will not enter into the Brake Test Area during those times that theTenant is testing its vehicles within the Brake Test Area, and (iii) take suchother measures and actions to ensure the safety of the public. A set of keys tothe gate referenced in the preceding sentence shall be provided to theLandlord, who, with other occupants of the Project, or in the case of anemergency, can use that portion of the Entrance Road comprising the Brake TestArea when the Tenant is not testing its vehicles thereon. In addition to therequirements of Section 22 (Surrender of Tenant) as they would apply tothe Brake Test Area, at the termination of the Lease (with respect to the BrakeTest Area), the Tenant shall repave that portion of the Entrance Roadcomprising the Brake Test Area. For clarification, the damage to the EntranceRoad and that portion of the Entrance Road comprising the Brake Test Area causedby the breaking, sudden breaking and road testing of vehicles shall not beconsidered “ordinary wear and tear” and the repaving of the Brake. Test Area isintended to repair the damage to the Brake Test Area caused by the Tenanttesting its vehicles thereon.

 

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(c)                                  ObstacleCourse Area -  It is understood thatthe use by the Tenant of the Obstacle Course Area does not include theremaining acreage owned by the Landlord, including, in particular, but withoutlimitation, the storm water drainage ditch to the west of the Obstacle CourseAreas and the areas within the former pond site (which Obstacle Course Areasurrounds) and without the Obstacle Course Area which the Landlord is using forthe purpose of growing trees. In order to avoid damaging the storm waterditches of the Project and the seedlings, trees and surface conditions of theremainder of the Landlord’s real property (outside the 25-foot wide ObstacleCourse Area), the Tenant shall not permit anyone driving its vehicles on theObstacle Course Area to drive outside the Obstacle Course Area, and shall takeprecautions to ensure that its employees and invitees testing its vehiclesconfine themselves to the Obstacle Course Area. It shall be the sole responsibilityof the Tenant to clearly mark and delineate the boundaries of the ObstacleCourse Area. The Tenant further agrees to install gates and clearly-markedcaution barriers to ensure the safety of the public and to protect theseedlings and trees outside the Obstacle Course Area. To allow Landlord,governmental and regulatory personnel access to the storm water ditch anddrainage 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 StoneyRoad. The Tenant further agrees not to (i) damage, obstruct or interfere withany 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 (whichcould cause it to clog or damage the system). Cutting, removal and damage totrees and seedlings by Tenant or its employees or invitees (without the expressprior written permission of the Landlord) shall not be permitted and will beconsidered a breach of this Lease.

 

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

 

13.                                 ThisAmendment may be executed in several counterparts, each of which shall bedeemed an original and such counterparts shall constitute but one and the sameinstrument. If this Amendment or the signature page, as executed, istransmitted by one party to the other by

 

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facsimiletransmission or electronically “pdf” transmission, such transmission shall bedeemed an executed original of this Amendment and of such signature.

 

14.                                 Exceptas modified by this Amendment, the Lease remains unchanged.

 

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IN WITNESSWHEREOF, the parties hereto have duly executed this Amendment under seal as ofthe 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

 

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