**Exhibit 10.10**

 

**BUILDING #1MANUFACTURING AREA**

 

**INDUSTRIAL LEASE**

 

THIS INDUSTRIAL LEASE (“**Lease**”) is entered into as of the 15th day of January, 2006, by andbetween AEROSPACE/DEFENSE, INC., a South Carolina corporation (“**Landlord**”), and FORCE PROTECTION INDUSTRIES, INC., a Nevadacorporation and FORCE PROTECTION, INC., a Nevada corporation (collectively, the“**Tenant**”)**.**

 

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

 

1.             **THE PREMISES.**

** **

A.            The property hereby leased to the Tenantis a portion of the manufacturing area in a building “**Building****No. 1**”or “**Building**” which is a part of an industrialdevelopment owned by the Landlord and located in Ladson, Charleston County,South Carolina (“**Project**”). The term “**Premises**” means and is comprised of the following: (i) a portion ofthe Building outlined and marked “Premises” on Exhibit A consistingof approximately 26,180 square feet located at western end of Bay B of BuildingNo. 1 (the “**Leased Area**”), (ii) the fixtures locatedtherein, including the Paint Spray Booth shown and marked on Exhibit Aas “**Paint**,” the Sandblast Booth shown and marked on Exhibit Aas “**Blast**”, 100 HP compressor and 75 HP compressor (the “**Compressors**”) and other machinery associated with the Paint Booth, SandblastBooth and Compressors as listed on Exhibit A-1, but excluding anyoverhead cranes located above the Leased Area, and (iii) subject toParagraph 5B(viii) hereof, the right to use in common with the Landlordand other lessees and occupants of the Project, the “**Common Areas**” (hereinafterdefined). (The terms Paint Spray Booth and Sandblast Booth shall hereinafter bereferenced as the “**Booths**.” The Booths, Compressors andassociated equipment listed on Exhibit A-1 may hereinafter bereferenced collectively as the “**Equipment**.”) Notwithstanding the foregoing, theLandlord reserves to itself and other occupants and users of Building No. 1the following: (a) the right of ingress and egress across the Leased Areamarked on Exhibit A as “**Access Area**,” (b) access and exclusive useof the stairs (marked “**Stairs**” on Exhibit A leadingfrom the Leased Area to the large machine emplacement in Bay B (marked as “**Erection Trench**” on Exhibit A)) and (c) access to andnonexclusive use of the stairs leading to the mezzanine bathrooms (marked “**Mezzanine Stairs**” on Exhibit A). For clarification and by way ofexplanation, it is anticipated that the Access Area (a portion of Bay B ofBuilding No. 1) will be used by Landlord and others to access Bays C and Dto and from Bay A and to transport materials to and from Bay A and Bays C andD. The Access Area shall not be blocked by either party during the term of thisLease. The “**Wash Area**” marked on Exhibit A is includedin the Premises; however, while Tenant may use the Wash Area as an area forstorage, it is understood that the Tenant shall not dispose of any liquids orany other substance into the drains within the Wash Area and shall continuouslythroughout the Term (as defined below) carefully cover these drains to preventany substances from falling into the drains.

 

B.            Tenant represents that Tenant hasexamined the physical condition of the Premises and has found them satisfactoryfor all purposes hereof and Tenant accepts the Premises in their presentcondition, “AS IS.”

 

----

 

2.                                       **TERM – SUBJECT TO 90-DAY RIGHT TO TERMINATE.**

** **

A.            The term of this Lease shall commence as**ofJanuary 15, 2006 (the “**Commencement Date**”) and expire on July 14, 2008 (“**Term**”);** **provided,that unless notice in writing is givenby one party to the other at least ninety (90) days prior to the expirationdate of July 14, 2008, the Term of this Lease shall automatically beextended on a “month-to-month” basis until one party provides to the other noless than ninety (90) days prior written notice of its desire to terminate thisLease; provided, however, notwithstanding any provision of this Lease to thecontrary, it is agreed, acknowledged and understood that the Landlord, withoutliability to the Tenant, may terminate this Lease at any time during the Termof this Lease by giving no less than ninety (90) days prior written noticethereof to the Tenant. The initial Term and any extension thereof as hereinabove provided shall bereferred to collectively as the“Term.”

 

B.            For purposes of this Lease, the term “**Lease Year**” shall refer to a period of twelve (12) consecutive monthsmeasured from the first day of the month next succeeding the Commencement Date.The first Lease Year shall commence asof February 1, 2006 and end January 31, 2007. Each subsequentLease Year shall commence on the anniversary of February 1.

 

C.            It is also understood and acknowledgedthat notwithstanding any term or provision in this Lease to the contrary, duringthe Term, the Landlord, Millennium Metal Fabricators, Inc. (“**Millennium**”), the former occupant of the Leased Area, and other tenants ofthe Building may from time-to-time require the use of some or all of theEquipment and, therefore, the Landlord reserves for itself and for the benefitof Millennium and such other tenants and their respective successors andassigns, the right from time-to-time to share with the Tenant and utilize theBooths during no more than twenty-five percent (25%) of the time, theCompressors (which comprise an integral part of compressed air system forBuilding No. 1) and other equipment listed on Exhibit A-1.During the period of such use of the Paint Spray Booth and/or the SandblastBooth and/or the Compressors, (a) the parties agree to meet on a regularbasis to coordinate among themselves in good faith the details of such sharingarrangement including meeting to coordinate fair, reasonable and equitableproduction schedules so as to minimize inconvenience to all parties and not tounreasonably interfere with the operations of the Tenant, and (b) theamount of Base Rent, utilities and other costs associated with leasing thePremises by the Tenant (as referenced in Sections 3, 4 and 5) shall be proratedbased on the actual times during a particular month the Paint Spray Boothand/or Sandblast Booth are utilized and the actual portion of the Lease Arearequired during the same monthly period by the Landlord, Millennium or othertenants.

 

3.                                       **BASE RENT.**

** **

A.            Beginning on the Commencement Date, andfor the remainder of the first Lease Year(1) (but subject to the provisions of Section 2Dabove), the Tenant agrees to pay to the 

 

----

(1) For the first Lease Year,Base Rent shall be based on an annualized rate as follows: (a) for the LeasedArea — $98,175.00 ($3.75 x 28,160 sq. ft.); (b) for the Sandblast Booth and associated equipment listed on ExhibitA-1 House - $35,700.00; (c) for the Paint Spray Booth - $30,000.00; and (d)for the Compressors and associated equipment listed on Exhibit A-1(collectively the “**Compressed Air System**”)- $6,000.00.

 

2

----

 

Landlord, withoutprevious demand therefore, and without setoff or deduction whatsoever, thefollowing net monthly rent (“**Base Rent**”):

 

(a)           For the Leased Area –

 

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

 

(ii)                                  From April 1, 2006 through theremainder of the first Lease Year, the monthly Base Rent shall be $8,181.25 permonth.

 

(b)           For the Sandblast Booth and associatedequipment – beginning on the Commencement Date and through the first Lease Year– the monthly Base Rent shall be $2,975.00 per month.

 

(c)           For the Paint Spray Booth – beginning onthe Commencement Date and through the first Lease Year – the monthly Base Rentshall be $2,500.00 per month.

 

(d)           For the Compressed Air System – beginningon the Commencement Date and through the first Lease Year – the monthly BaseRent shall be $500.00 per month.

 

Ifa Term commences on a day other than the first day of the month, Tenant shallpay monthly Base Rent prorated for such fractional month on the basis of a 30-daycalendar month. All monthly Base Rent shall be due and payable on the first dayof each calendar month during the Term.

 

B.            Commencing with the first day of thesecond Lease Year, to-wit: February 1, 2007 (“**First Adjustment Date**”)and on the first day of each Lease Year thereafter (“**Subsequent Adjustment Date**”) during the Term, the amount of themonthly Base Rent due under this Lease shall be adjusted to an amount equal tothe product of the then current monthly Base Rent multiplied by three percent(3%).

 

C.            All monthly Base Rent payments and anyother payments due Landlord under this Lease shall be made without any setoffor deduction whatsoever and shall be payable and delivered to:

 

Aerospace/Defense, Inc.4383 Jenkins AvenueNorth Charleston, SC 29405

 

or to such other place asmay be designated by notice in writing from Landlord to Tenant. Base Rent andother payments due Landlord by the Tenant under this Lease received more thanten (10) days after the due date of such payment shall be subjected to alate penalty of one point five percent (1.5%) of the amount of such payment foreach month, or portion thereof, such payment is late. No payment by Tenant orreceipt by Landlord of any lesser sum than the monthly Base Rent stipulated inthis Lease shall be deemed to waive the right of Landlord to receive in atimely manner the full amount due and payable to the Landlord.

 

3

----

 

4.                                       **UTILITIES.**

** **

A.            Commencing on the date this Lease isfully executed by both parties, Landlord shall supply gas, water, electricity,and sewer to the Premises for Tenant’s operation at the Premises. It isunderstood that utility services at the Project of which the Premises is a partare supplied at one point of delivery through one meter. Subject to Subsections4A (a), (b) and (c) hereof, Tenant shall reimburse Landlord forLandlord’s cost of providing utility services to the Premises on the basis ofTenant’s usage of same. With respect to electricity, the amount for whichLandlord will be reimbursed includes both the consumption factor and so-called “demand”or “standby” factor, if the latter factor is employed for billing purposes bythe company providing electricity. For clarification, it is acknowledged thatthe other current occupants of Building No. 1 do not use natural gas;therefore, unless another tenant or occupant of Building No. 1 beginsutilizing natural gas, the Tenant shall be responsible for reimbursing Landlordfor the cost of all natural gas feeding into Building No. 1 as of theCommencement Date.

 

(a)           Provided Tenant only consumes water forpersonal use and normal maintenance and not for any manufacturing process,Tenant’s pro rata portion of the Project’s water and sanitary sewer bill willbe an amount equal to the product of (1) the total water or sewer bill, asthe case may be, for the entire Project, multiplied by (2) a fractionhaving as its numerator the total number of employees who work at the Premisesand as its denominator the total number of employees who work in all buildingsin the Project.

 

(b)           Tenant’s pro rata share of the county solid wasterecycling fee paid by the Project for solid waste hauled from the Project shallbe an amount equal to the product of (1) the total solidwaste recycling fee paid by the Project for the period in question, multipliedby (2) a fraction having as its numerator the volume of all trashdumpsters at the Premises picked up during the period in question and as itsdenominator the volume of all trash dumpsters at all buildings in the Projectpicked up during the same time period. For purposes of this paragraph, thevolume of a trash dumpster picked during a billing period will be determined bymultiplying the capacity of the trash dumpster in cubic yards by the number oftimes such trash dumpster is picked up during the billing period, whether ornot such trash dumpster was filled to capacity at the time it was picked up. Itis acknowledged by the parties that the Tenant shall provide the Tenant’s owntrash dumpsters and shall pay for the hauling of trash therefrom.

 

(c)           Without the express prior written consentof the Landlord (pursuant to any written amendment to this Lease signed by bothparties), the Tenant agrees that it will not wash machinery within the Premises(including, in particular, the Wash Area) or dispose any liquids or othersubstances into the drains of the Wash Area.

 

B.            Except to the extent such utilities arein the future separately metered and billed to the Tenant directly, Landlordshall bill Tenant as soon aspracticable the monthly charges for the utilities associated with the LeasedArea and the use of the fixtures located therein. All monthly utility chargespaid more than thirty (30) days after receipt of an invoice from the Landlordshall be subject to a late penalty of five percent (5%) of the amount of suchpayment.

 

4

----

 

C.            If the parties are unable to agree uponTenant’s usage of utilities, Tenant shall have the option either (i) toinstall, at Tenant’s expense, separate meters or submeters, or (ii) tocause Landlord to employ (not more than once each Lease Year) a mutuallyacceptable engineering firm, whose fees will be equally shared by Landlord andTenant, to determine Tenant’s share of utilities, consumed in the Project byusage survey. Tenant will be responsible for the maintenance of separate metersor sub-meters. Until any such engineering firm determines Tenant’s share of anydisputed utility charges, the Tenant agrees to reimburse all amounts invoicedby the Landlord based on the Landlord’s estimate of Tenant’s share of utilitycharges.

 

D.            Landlord will cause the lawns in theProject to be cut periodically. Tenant will reimburse Landlord for the portionof the cost of cutting and trimming all lawns in the Project attributable tothe Premises. Tenant’s pro rata portion of the cost of cutting and trimming alllawns in the Project shall be an amount equal to the product of the total costof cutting and trimming all lawns in the Project multiplied by a fractionhaving as its numerator the square footage of the Leased Area in Building No. 1(to wit: 26,180 sq. ft.) and as its denominator the square footage of allbuildings in the Project (to-wit: 480,000 square feet);  provided, however, the Tenant’s proportionateshare of such cost of cutting and trimming during any Lease Year will notincrease 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” (hereinafterdefined) which are levied, imposed, or assessed upon or against the Premisesand Project. Tenant covenants to pay to Landlord, as additional rent, on orbefore the later to occur of (a) thirty (30) days after receipt of aninvoice therefore or (b) thirty (30) days before the day a fine, penalty,interest or cost may be added thereto for the nonpayment thereof, Tenant’s prorata share determined by multiplying all the Impositions for the project by afraction having as its numerator the square footage of the Premises and as itsdenominator the total square footage of all buildings in the Project (such prorata share being 5.45% as of the date of this Lease). [If Building No. 1and the area surrounding Building No. 1 are a separate tax parcel, thepro-rata share for the Leased Area of any such tax bill shall be 11% - theapproximate square footage of the Leased Area to the entire square footage ofBuilding No. 1.]

 

(i)            If the Premises is separately assessedand billed, such Impositions shall be paid prior to delinquency by the Tenantdirectly to the taxing authorities. Tenant shall furnish to Landlord, promptlyafter payment of any Impositions paid directly to taxing authorities, officialreceipts or other satisfactory proof evidencing payment of such Imposition.

 

(ii)           As used herein, the term “**Impositions**” shall include any form of real estate tax or assessment,general, special, ordinary or extraordinary, and any license fee, or commercialrental tax based on the gross rents paid hereunder, improvement bond or bondsissued after Commencement Date of this Lease and not associated with improvementsnecessary for the initial construction of the Premises, levy or tax imposed onthe 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 

 

5

----

 

district thereof, as againstany legal or equitable interest of Landlord in the Premises or in the realproperty of which the Premises is a part, as against Landlord’s right to renttherefrom (provided such tax is assessed on gross rents payable hereunder), andas against Landlord’s business of leasing the Premises (provided such tax isassessed on gross rents payable hereunder). With respect to any assessmentwhich under the laws then in force may be paid in installments, there will beincluded within the meaning of the term “Impositions” for any tax fiscal yearonly the current annual payment. Impositions will not include (i) anyfranchise, gift, estate, inheritance, conveyance, transfer, or other taxassessed against Landlord or Landlord’s heirs, successors or assigns, or (ii) anyincome, excess profit or other tax, assessment, charge, or levy on the net rentpayable by Tenant under this Lease.

 

(iii)          Tenant shall pay prior to delinquency alltaxes assessed against and levied upon trade fixtures, furnishings, equipment,inventory and all other personal property of Tenant contained in the Premisesor elsewhere. When possible, Tenant shall cause such trade fixtures, furnishings,equipment and other personal property to be assessed and billed separately fromthe real property of Landlord. If any of Tenant’s personal property shall beassessed with Landlord’s real property, Tenant shall pay Landlord the taxesattributable to Tenant within thirty (30) days after receipt of a writtenstatement setting forth the taxes applicable to Tenant’s property, togetherwith a copy of the taxing authority’s billing to Landlord.

 

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

 

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

 

B.            Tenant shall, in addition to the monthlyBase Rent and pro rata portion of Impositions referred to above, also beresponsible for Tenant’s pro rata portion of all expenses incurred by Landlordfor (i) grounds maintenance (landscaping) and (ii) other Common Areamaintenance and utility charges such as lighting and maintenance for internalstreets and parking facilities (collectively, “**Common Area Charges**”).Tenant’s pro rata portion of Common Area Charges shall be an amountequal to the product of the total Common Area Charges for the 

 

6

----

 

Project multiplied by afraction having as itsnumerator the square footage of the Premises and as its denominator the squarefootage of all buildings in the Project.

 

(i)            Common Area Charges will not includeImpositions (unless the Premises is a separate tax parcel), cost of capitalimprovements or repairs (provided such repairs cannot be attributed to Tenant),including, without limitation, repainting of buildings and total repaving ofthe parking areas, cost of roof repairs, cost of repairs covered by insurance,cost of constructing leasehold improvements for any other lessee of Project,legal or brokerage fees associated with any lease for space in Project, cost ofadvertising by Landlord, management fees, whether payable to Landlord or thirdparties, so-called “administrative charges” or other add-ons to the total ofCommon Area Charges, principal or interest on debt or amortization payments onany mortgages or deeds of trust or any other debt for borrowed money andamortization of improvements, depreciation of Landlord’s original investment inProject, amounts paid by Landlord to affiliates of Landlord for services inconnection with the Common Areas, but only to the extent that any such fees arein excess of the ordinary and reasonable fees paid in arms’ lengthtransactions, amounts expended in remediation of Hazardous Substancecontamination in the Common Areas, provided the contamination cannot beattributed to Tenant or another occupant of the Project, or the cost ofcompliance in the Common Areas with the Americans with Disabilities Act,provided compliance is not related to the use and occupancy of Tenant oranother occupant of the Project.

 

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

 

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

 

(iv)          Once each calendar year, Landlord willdeliver a statement (“**CAM Statement**”) to Tenant showing: the amount ofactual Common Area Charges for the preceding calendar year, with a breakdown ofamounts by major categories of Common Area Charges and Tenant’s pro rata shareand the detail for determining same. Tenant agrees to pay Tenant’s pro ratashare of Common Area Charges to Landlord within thirty (30) days after Tenantreceives the CAM Statement.

 

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

 

(vi)          The term “**Common Areas**” asused in this Lease means the most direct pedestrian route from the door leadingfrom the office area of Building No. 1 which the Tenant leases from theLandlord to the Leased Area, the Mezzanine Stairs and 

 

7

----

 

mezzanine bathrooms, and themost direct vehicular route on the roadways of the Project leading fromBuilding No. 2 to the overhead doors on the western end of the LeasedArea. Landlord hereby grants to Tenant and Tenant’s customers, invitees andemployees for the entire Term, the right to use, in common with Landlord,Landlord’s invitees and employees and with the other lessees and occupants ofBuilding and their respective customers, invitees and employees, the CommonAreas for their intended purposes, subject to reasonable rules andregulations (“**Rules and Regulations**”) to be promulgated by Landlord forthe convenience and safety of all of the lessees, occupants and users of theBuilding; provided, Tenant shall be solely responsible for, and defend, holdharmless and indemnify the Landlord and its agents and employees from, anydamage for injury caused within the Common Areas and anywhere else within theProject by any of Tenant’s employees and invitees. Tenant will ensure that itsemployees and invitees do not enter the manufacturing area of Building No. 1(other than the Leased Area) except for using the Mezzanine Stairs andmezzanine bathrooms and for the sole purpose of using the most direct routefrom the door of the office area (leased by the Tenant) to the Leased Area.Landlord will have the right to make reasonable modifications and additions tothe Rules and Regulations from time to time. The Tenant shall cause itsemployees and invitees using the Premises to park in the common area parkinglots designated in the Building No. 2 Lease.

 

(vii)         Duringthe Term, the Landlord will maintain the Common Areas in reasonable order;provided, however, the Tenant shall cause its employees, customers, agents andinvitees to keep the Common Areas in neat, clean, trash free and orderlycondition (especially, in particular, but without limitation, the Common Areaswithin the Building). If the necessity for repairs to or cleaning of any CommonAreas shall have arisen from or shall have been caused by the negligence orwillful acts of the Tenant, its agents, concessionaires, officers, employees, licensees,invitees or contractors, Landlord may make or cause the same to be made, butshall not be obligated to do so, and Tenant agrees to pay to Landlord promptlyupon Landlord’s demand, the cost of such repairs and/or cleaning, if made. Inthe event Landlord elects not to make such repairs or cleaning, Landlord mayrequire Tenant perform such at Tenant’s sole cost and expense.

 

(viii)        Landlord shall have the right, atLandlord’s sole cost and expense, to relocate, change, move or alter the CommonAreas, so long as 24-hour ingress to and egress from the Premises is notmaterially disturbed.

 

6.                                       **INTENTIONALLY OMITTED.**

** **

7.                                       **USE.**

** **

A.            Tenant shall use the Premises for thepurpose of utilizing the Paint Booth and Blast Room and performing workassociated therewith. Outside storage, including without limitation, trucks andother vehicles, is prohibited. Tenant shall at its own cost and expense obtainany and all licenses and permits necessary for any such use. Tenant shall notpermit any objectionable or unpleasant odors, smoke, dust, noise or vibrationsto emanate from the Premises, nor take any other action that would constitute anuisance or would disturb or endanger the Landlord or any other tenants oroccupants of Building No. 1 or unreasonably interfere with their use ofBuilding No. 1. Without Landlord’s prior written consent, Tenant shall notreceive, 

 

8

----

 

store or otherwise handle anyproduct, material or merchandise which is explosive or highly flammable.

 

B.            Tenant shall not commit or suffer to becommitted any waste upon or about the Premises, the Common Areas, and theBuilding.

 

8.                                       **COMPLIANCE WITH LAWS AND GOVERNMENTAL REGULATIONS.**

** **

A.            Tenant shall at all times during the Termbe in full compliance with any and all federal, state and local governmental rules andregulations, ordinances and similar provisions having the force and effect oflaw (collectively, “**Laws**”) which are or would be applicable tothe business being conducted in the Premises. In particular, allEquipment shall be used, maintained and operated by the Tenant in fullcompliance with all laws, rules and regulations of the State of SouthCarolina and the United States Federal Government and their respectiveagencies. In addition and for clarification, the Tenant, at its sole cost andexpense, must obtain all necessary or required permits, authorizations, andlicenses from appropriate governmental agencies to operate the Booths and toconduct its business within or about the Premises.

 

B.            Tenant shall be obligated to make anyalterations, repairs or improvements to the Common Areas that are necessarybecause they relate primarily to the occupancy or use of Tenant or Tenant’sbusiness in the Premises.

 

9.                                       **MAINTENANCE AND REPAIR.**

** **

A.            Landlord shall repair and maintain ingood order and condition the exterior and structure of Building No. 1,including the roof, exterior walls and supporting members of the Building No. 1.Tenant shall promptly report to the Landlord any damages to the Premises.

 

B.            Care and Maintenance of the Leased Area. Except as provided in Section 9A,Section 13, and Section 14 hereof, Tenant shallpromptly throughout the Term at Tenants cost and expense, take good care of andmaintain the Premises in good order, operating condition and repair and inneat, clean and safe condition. In meeting its obligations pursuant to this Section 9B,Tenant may repair (rather than replace) any component of the Premises whichTenant is required to maintain unless such component cannot be repaired, inwhich event replacement shall be required. Tenant shall promptly, at Tenant’scost and expense, make all necessary replacements, restorations, renewals andrepairs to portions of the Premises Tenant is required to maintain. Repairs, restorations,renewals and replacements shall, to the extent possible, be at least equivalentin quality of the original work or the property replaced, as the case may be.

 

C.            Care and Maintenance of the Equipment. The Tenant, at its own cost andexpense, shall keep the Equipment in good repair, condition, and working order,and shall furnish any and all parts and labor required for that purpose. TheTenant shall clean and lubricate all Equipment on a periodic basis andimplement preventive maintenance thereon in a good, workmanlike mannerconsistent with best industrial practices. The Tenant shall not make anymaterial alterations to or replacements of the Equipment without the priorwritten consent of the 

 

9

----

 

Landlord. All Equipment,accessories, parts, and replacements which are added to or become attached tothe Equipment shall immediately become the property of the Landlord and shallbe deemed incorporated in the Equipment and subject to the terms of this Leaseas if originally leased hereunder at no change in the rental due and payablehereunder. The Equipment shall be used, maintained and operated by Tenant infull compliance with required permits, authorizations and licenses and alllaws, rules and regulations of the State of South Carolina and the UnitedStated Federal Government and their respective agencies. In addition to theforegoing, the Tenant shall perform all requirements of the manufacturer of the100 HP Compressor in order to maintain the manufacturer’s warranty thereon.(See Exhibit A-1.)

 

10.                                 **CHANGES, ALTERATIONS AND NEW CONSTRUCTION BY THETENANT.**

** **

A.            Tenant shall make no structuralalterations, changes, additions or improvements (collectively “**Alterations**”) in or to the Premises without Landlord’s prior written consent.In the event of Landlord’s consent, any such Alteration(s) shall be subject tothe following:

 

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

 

(ii)           Any such Alteration shall at the expirationof Term become the property of the Landlord.

 

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

 

C.            At all times during the Term, Tenant willnot, directly or indirectly, create, incur, assume or suffer to exist any lienon or with respect to the Premises or any portion of Project. Tenant willpromptly, at Tenant’s own expense, take such action asmay be necessary toduly discharge, bond or eliminate any such lien in a manner satisfactory toLandlord.

 

11.                                 **INDEMNIFICATION.**

** **

Tenantagrees, 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 assertedagainst Landlord by reason of (i) any accident, injury to or illness ordeath of any person, or any damage to property occurring on the Premises duringthe Term or while Tenant, Tenant’s agents, employees, invitees or contractorsor parties claiming through Tenant are in possession of or conducting anyactivities on the Premises (except to the extent caused by the negligence orwillful misconduct of Landlord), (ii) any accident, injury to, illness ordeath of any person, or any damage to property (excluding payments forcasualties 

 

10

----

 

made to Landlord under propertyinsurance maintained by Landlord under Section 12A, but includingdeductible amounts under such insurance) arising out of the negligence orwillful misconduct of Tenant or Tenant’s agents, employees, invitees orcontractors in any portion of the Project outside the Premises during the Term,and (iii) any failure by Tenant to perform or comply with any of the termsof this Lease or of any contracts, agreements, restriction, or laws affectingthe Premises or any part thereof. The obligations and liabilities of the Tenantunder this Section shall survive the Term of this Lease and shall not belimited or diminished by the minimum limits of insurance required by the Tenantunder Section 12.

 

12.                                 **INSURANCE.**

** **

A.            Throughout the Term and at no cost to theTenant, the Landlord will maintain fire and casualty insurance over Building No. 1in such amounts as it deems necessary.

 

B.            (i)            Tenant, at its expense, will maintainfrom and after the date of this Lease and throughout the Term, comprehensivegeneral liability insurance against claims on account of bodily injury, deathor property damage incurred upon or adjacent any part of the Premises. Suchinsurance policy will have limits of not less than Three Million and No/100Dollars ($3,000,000) per occurrence in respect to bodily injury or death andnot less than One Million and No/100 Dollars $1,000,000) peroccurrence in respect to property damage and provide contractual coverage ofTenant’s liability to Landlord assumed under the indemnification provisions ofthis Lease. Landlord shall be named as an additional insured under theinsurance required under this Subsection 12B(i), and the Tenantshall deliver to Landlord a certificate evidencing such insurance before theCommencement Date and thereafter upon reasonable request.

 

(ii)           Tenant, at its expense, shall maintainand provide throughout the Term insurance coverage against loss or damage byfire or other risks provided by broad form extended coverage endorsementcovering all property and chattels belonging to or under the care, custody orcontrol of Tenant and located within or at the Premises and covering the PaintBooth, Blast House and Compressors. Landlord shall not be liable for any damageto or loss of such property and chattels, regardless of the cause of suchdamage or loss.

 

C.            All insurance required by the Tenanthereunder shall be primary and not excess with any insurance, coinsurance orself insurance maintained by Landlord. Certificates of insurance evidencing theinsurance required hereunder shall be delivered to Landlord on or before theCommencement Date and thereafter upon reasonable request.

 

D.            Each party hereto expressly waives any and everyclaim which arises or may arise in such party’s favor against the other partyand such party’s shareholders, partners, officers, and employees during theTerm for any and all loss of or damage to any of such party’s property, locatedwithin or upon or constituting a part of, the Premises or Project, which lossor damage is caused by a peril required by this Lease to be covered by theinsurance of the party incurring the loss. Inasmuch as the mutual waivers inthis section will preclude the assignment of any claim by way ofsubrogation (or otherwise) to an insurance company (or any other party), eachparty hereby agrees to give immediately to each insurance company which hasissued to such party policies of property insurance, written notice of theterms of the mutual waivers of 

 

11

----

 

subrogation and to have suchinsurance policies properly endorsed, if necessary, to prevent the invalidationof the insurance coverages by reason of such waivers.

 

E.             If, by reason of any act or omission ofTenant, the rate of any insurance maintained by Landlord with respect to theCommon Areas or the Premises shall be increased, Tenant shall reimburseLandlord for that portion of the premiums to be paid by Landlord due to suchact or omission as additional rent due hereunder. If, due to the manner ofTenant’s use or occupancy of the Premises, any such insurance shall be canceledor if cancellation thereof shall be threatened, Landlord shall give promptnotice thereof to Tenant and, provided such manner of use shall not have beenmade of the Premises by Landlord prior to the date hereof, then Tenant shallindemnify Landlord against any liability that would have been covered by suchcanceled insurance.

 

13.                                 **DAMAGE AND DESTRUCTION.**

** **

A.            In case of any material damage to or destruction ofany portion of the Premises, Tenant shall promptly give written notice thereofto Landlord. If any portion of the Premises shall be partiallydamaged by fire or other casualty, then Landlord, except as otherwise providedherein, shall proceed promptly and with due diligence to repair and restore thedamaged portion to substantially the same condition and quality as prior to suchdamage. If any part of the Premises shall be damaged, but not such asubstantial portion thereof as to impair Tenant’s ability to conduct Tenant’sbusiness in Tenant’s normal course, then such portion thereof as has beenrendered untenantable by reason of such damage shall be repaired by Landlordand until such repairs are completed, the Base Rent payable hereunder shall beabated to the extent that such Base Rent for such portion relates to the totalspace for the period from the date of such damage to the date when such portionshall have been made tenantable. Tenant understands that Landlord will notcarry insurance of any kind on Tenant’s property, to wit: Tenants goods,inventory, furniture or furnishings or any fixtures, equipment, orimprovements, and that Landlord shall not be obligated to repair any damagethereto or replace the same.

 

B.            In the event the Premises is totallydestroyed or such portion thereof is damaged as will prevent Tenant fromconducting Tenant’s business in Tenant’s normal course, Landlord, at Landlord’ssole expense, shall promptly and with due diligence repair and restore thePremises or the damaged portion thereof to substantially the same condition andquality as prior to such damage.

 

(i)            If in the reasonable opinion of alicensed architect retained by Landlord, the Premises cannot be substantiallyrepaired or restored within one hundred (100) days from the date of damage ordestruction, the Lease and the leasehold interest herein granted may be terminatedby either party by written notice delivered to the other party within thirty(30) days after the date of receipt of notice from Landlord’s architect settingforth the projected repair period. Notice of termination by either party to theother party will specify a date, not less than ten (10) days after thedate of such notice, for such termination. In the event of giving of suchnotice of termination, this Lease shall expire as of the date specified in suchnotice with the same effect as if such date where the date hereinbeforespecified for the expiration of the Term, and the Base Rent payable hereundershall be apportioned as of such date of such fire or other casualty, subject toabatement, if any, as and to the extent provided in Section 13Ahereof.

 

12

----

 

(ii)           Notwithstanding the provisions of this Section 13A,in the event the Premises is destroyed or damaged to the extent of thirty-threepercent (33%) or more of the replacement value thereof during the last two (2) yearsof the Term or during the last two (2) years of any Option Period of theLease, then either Tenant or Landlord may elect to terminate this Lease as ofthe date of such damage or destruction by giving written notice to the otherwithin sixty (60) days of such damage or destruction except Tenant can negateLandlord’s termination if Tenant exercises the renewal option. If this Lease isterminated as herein provided, then all prepaid rent and other charges paid inadvance by Tenant shall be refunded by Landlord to Tenant.

 

14.                                 **CONDEMNATION.**

** **

A.            In the event that at any time during the Term, titleto the whole or materially all of the Premises shall be taken by the exerciseof the right of condemnation or eminent domain or byagreement between the Landlord and those authorized to exercise such right,this Lease shall terminate and expire on the date of such taking and the rentprovided to be paid by the Tenant shall be apportioned and paid to the date ofsuch taking.

 

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

 

15.                                 **SUBORDINATION; NONDISTURBANCE.**

** **

A.            Upon Landlord’s written request, Tenantwill execute and deliver to Landlord an agreement in recordable formsubordinating Tenant’s rights to the lien of any mortgage hereafter encumberingthe Premises. Tenant, however, will not be required to subordinate Tenant’srights hereunder to any mortgage unless and until the holder of such mortgageexecutes and delivers to Tenant a written agreement providing in substance (i) thatso long as Tenant faithfully discharges Tenant’s obligations under this Lease,Tenant’s right of possession to the Premises and other rights under this Leasewill not be affected by any default by Landlord under any instrument creatingor secured by such mortgage, and (ii) that in the event of foreclosure orany other enforcement of such mortgage, the rights of Tenant hereunder willexpressly survive and this Lease will continue in full force and effect. If anymortgage, trustee or ground lessor shall elect to have this Lease prior to thelien of its mortgage, deed of trust or ground lease, and shall give writtennotice 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 subsequentto the date of said mortgage, deed of trust or ground lease or the date ofrecording thereof.

 

B.            Landlord represents and warrants that nolien encumbers the Premises on the date of this Lease.

 

16.                                 **NONWAIVER.**

** **

Neithera failure by either party to exercise any of its options hereunder, nor failureto enforce its rights or seek its remedies upon any default, nor the acceptanceby the Landlord of 

 

13

----

 

any rent accruing before orafter any default, shall effect or constitute a waiver of such party’s right toexercise such option, to enforce such right, or to seek such remedy withrespect to that default or to any prior or subsequent default.

 

17.                                 **QUIET ENJOYMENT.**

** **

IfTenant pays the rent Tenant is obligated hereunder to pay, and observes allother terms, covenants and conditions hereof, Tenant may peaceably and quietlyhave, hold and enjoy the Premises during the Term, subject, however, to all theterms of this Lease.

 

18.                                 **ASSIGNMENT AND SUBLETTING.**

** **

A.            Tenant shall not sublet the Premises, norany part thereof, nor assign, or otherwise dispose of this Lease or anyinterest therein, or any part thereof, without Landlord’s prior written consentin each of the foregoing cases, which consent shall not be unreasonablywithheld or delayed. Landlord’s disapproval of a proposed assignee or sublesseewill be considered reasonable if the proposed assignee or sublessee is not of agenerally comparable quality with Tenant, if the proposed use of the Premisesis not compatible with the Premises, or if the proposed assignee or sublesseeis not the same assignee or sublessee, as the case may be, of either Building No. 2or Building No. 3, currently under lease to the Tenant.

 

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

 

19.                                 **ENTRY.**

** **

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

 

20.                                 **DEFAULT.**

** **

A.            The following shall be defined and deemed as an “Eventof Default” by Tenant: (i) if Tenant shall default in the payment of theBase Rent or any additional rent, utility charges (referenced in Section 4),and charges referenced in Section 5, and in any other section of thisLease, and if Tenant shall fail to cure said default within fifteen (15) daysafter receipt of notice of such default from Landlord; or, (ii) if Tenantshall default in the performance or observance of any other term, covenant orcondition to be performed or observed by Tenant under this Lease and if Tenantshall fail to cure said default within thirty (30) days after receipt 

 

14

----

 

of notice of said default fromLandlord 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) ifan Event of Default (as that term is defined in each of the Leases referencedin this subsentence (iii)) shall occur in either of the following Leasesbetween the Landlord and Tenant: Industrial Lease dated July 13, 2004covering a portion of the building designated as “Building No. 2” locatedwithin the Project or Industrial Lease dated as of September 2, 2003 covering thebuilding designated as “Building No. 3” located within the Project.

 

(i)            In case of any Event of Defaulthereinbefore provided the Landlord shall have the immediate right of reentryand may remove all persons and property from the Premises by summaryproceedings, force or otherwise. No such reentry or taking possession of thePremises by Landlord shall be construed asan election on Landlord’s part to terminate this Lease unless a writtennotice of such intention to be given to Tenant or unless the terminationthereof be decreed by a court of competent jurisdiction.

 

(ii)           In addition, in the event of any Event ofDefault (whether or not Landlord shall elect to re-enter or to take possessionpursuant 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 thantwo (2) days’ notice to Tenant and upon the giving of said notice, thisLease and the term hereof shall cease and expire on the date set forth in saidnotice as if said date where the expiration originally set forth herein, or

 

2)             to relet the Premises or any parts)thereof for such term or terms (which may extend beyond the Term) and at suchrental(s) and upon such other terms and conditions as Landlord in Landlord’ssole discretion may deem advisable. Landlord shall have the right from time totime to make such alterations and repairs as may be reasonably necessary inorder to relet the Premises. Upon each such reletting all rentals received bythe Landlord from such reletting shall be applied, first, to the payment of anyindebtedness (other than rents due hereunder) of Tenant to Landlord, second, tothe payment of any costs and expenses of such reletting, including, withoutlimitation, reasonable attorneys’ fees and of the cost of such alterations andrepairs, third, to the payment of rents due and unpaid hereunder; and theresidue, if any, shall be held by Landlord arid applied in payment of futurerents and other payments required to be made by Tenant hereunder as the samemay become due and payable hereunder, with the right reserved to Landlord tobring such action(s) or proceeding(s) for the recovery of any deficitsremaining unpaid without being obliged to await the end of the term for a finaldetermination of Tenant’s account, and the commencement or maintenance of anyone or more actions for further accruals pursuant to the provisions of thisSection. If such rentals to be paid during that month by Tenant hereunder,Tenant shall pay any such deficiency to Landlord. Such deficiency shall becalculated and paid monthly subject to Landlord’s right of action(s) orproceeding(s) as aforesaid. Notwithstanding any such reletting withouttermination, Landlord may at any time thereafter elect to terminate this Leasefor such previous breach.

 

(iii)          ShouldLandlord at any time terminate this Lease for any breach, in addition to anyother remedies Landlord may have, Landlord may recover from Tenant 

 

15

----

 

all damages Landlord may incurby reason of such breach as damages for loss of the bargain and not as apenalty, including the cost of recovering the Premises, reasonable attorneys’fees, and including the present value determined by using a discount rate ofeight percent (8%), at the time of such termination, of the excess if any, ofthe amount of rental and charges equivalent to rental reserved in this Lease for the remainder ofthe Term, over the aggregate rental value of the Premises for the remainder ofsuch term, all of which shall be immediately due and payable from Tenant toLandlord. If any laws shall validly limit the amount of the damages providedfor in the immediately preceding sentence to less than the amount above agreedupon, Landlord shall be entitled to the maximum amount allowable under suchlaws.

 

B.            Landlord shall not be in default unlessLandlord fails to perform obligations required of Landlord within a reasonabletime, but in no event later than thirty (30) days after written notice byTenant to Landlord and to the holder of any first mortgage or deed of trustcovering the Premises whose name and address shall have theretofore beenfurnished to Tenant in writing, specifying wherein Landlord has failed toperform such obligation; provided, however, that if the nature of Landlord’sobligation is such that more than thirty (30) days are required of performancethen Landlord shall not be in default if Landlord commences performance withinsuch 30-day period and thereafter diligently prosecutes the same to completion.In the event Landlord fails to discharge any obligation set forth in this Leaseon or before the date such obligation or payment is due, Tenant may, at Tenant’soption, discharge such obligation. Tenant shall use reasonable efforts tomitigate its damages after a default by the Landlord. In the event Tenantelects to discharge Landlord’s obligation(s), Landlord agrees to reimburseTenant 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 authorityof the United States or the State of South Carolina, including withoutlimitation, any material, substance or waste which is defined as “hazardous”, “hazardouswaste”, “hazardous material”, “hazardous substance”, “extremely hazardous waste”,“restricted hazardous waste”, “pollutant”, “contaminant”, “toxic substance” or “toxicwaste” under any provision of any applicable Environmental Law, and includes,but is not limited to, petroleum, petroleum products, asbestos, ureaformaldehyde and polychlorinated biphenyls.

 

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

 

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

 

16

----

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

17

----

 

22.                                 **SURRENDER OF TENANT.**

** **

A.            Tenant will surrender possession of thePremises and remove all goods and production equipment and other personalproperty owned by Tenant at the end of the Term, or at such other time asLandlord may be entitled to re-enter and take possession of the Premisespursuant to any provision of this Lease, and Tenant shall leave the Premisesbroom 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 13or termination due to condemnation pursuant to Section 14. Tenantshall deliver to Landlord all keys, locks and other fixtures connected with thePremises (such fixtures shall include, but are not limited to: cranes, PaintBooth, Blast House, Compressors, roof fans, bus ducts and lights) in goodrepair, order and condition. In default of such surrender of possession andremoval of goods and chattels at the time aforesaid, Tenant will pay toLandlord the rent set forth in this Lease for such period as Tenant either holds overpossession of the Premises or allows Tenant’s goods and production equipment orother personal property at such time to remain in the Premises, and in additionthereto, statutory penalties and all other damages which Landlord shall sufferby reason of Tenant’s holding over in violation of the terms and provisions ofthis Lease, including, without limitation, all reasonable claims for damagesmade by any succeeding tenant or purchase of the Premises against Landlordwhich may be founded upon delay by Landlord in giving possession of thePremises to such succeeding tenant or purchaser, so far as such damages areoccasioned by the unlawful holding over of Tenant.

 

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

 

C.            Tenant shall be responsible for theclean-up and removal of all raw materials, packaging, solid waste, unused and usedlubricants, oils, solvents and any hazardous wastes placed, abandoned orlocated on the Premises and the area surrounding the Premises by Tenant (or anyof Tenant’s employees, agent, invitees or subcontractors) during the termhereof.

 

D.            The liability and the obligations ofTenant under this Section shall survive the termination of this Lease.

 

23.                                 **FORCE MAJEURE.**

** **

Inthe event that Landlord or Tenant shall be delayed or hindered in or preventedfrom the performance or any act (other than either party’s monetaryobligations), 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, thenperformance of such act shall be excused for the period of the delay and theperiod for the performance of such act shall be extended for a periodequivalent to the actual period of such delay. Notwithstanding the foregoing,lack of funds shall not be deemed to be a cause beyond the reasonable controlof either party.

 

24.                                 **SECURITY DEPOSIT.**

** **

Nosecurity deposit shall be required.

 

18

----

 

25.                                 **COMMISSIONS.**

** **

BothLandlord and Tenant acknowledge that no real estate broker is involved withrespect to this Lease and the negotiations thereof. Both parties agree to holdeach other harmless from any claims for commissions arising out of this Lease.

 

26.                                 **ESTOPPEL CERTIFICATE.**

** **

Atany time and from time to time Landlord and Tenant each agree, upon request inwriting from the other, promptly to execute, acknowledge and deliver to theother or to any person designated by the other a statement in writingcertifying that this Lease is unmodified and is in full force and effect, or ifthere have been modifications, that the same is in full force and effect asmodified (stating the modifications), that the other party is not in default inthe performance of its covenants hereunder, or if there have been suchdefaults, specifying the same, the dates to which the Rent and other chargeshave been paid, and such other matters may be reasonably requested.

 

27.                                 **MISCELLANEOUS PROVISIONS.**

 

A.            All notices under this Lease shall be inwriting and shall be deemed given if delivered personally or by overnightcourier or if sent by confirmed facsimile transmitted during the regularbusiness hours of the recipient, or when mailed, postage prepaid, by registeredor certified mail, return receipt requested, addressed to the parties at theiraddresses as set forth below(or at such other address as a party may from time to time designate by writtennotice given in accordance with this Section):

 
| TO TENANT:                                                                                                                                                  |   | TO LANDLORD:                                                                                                                                 |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                        |   |                                                                                                                                         |
| Force  Protection, Inc.  Force Protection Industries, Inc.  9801 Highway 78  Ladson, SC 29456  ATTN: Mr. Ted McQuinn  Fax No: (843) 740-1973 |   | Aerospace/Defense, Inc.  4838 Jenkins Avenue  North Charleston, SC 29406  ATTN: Jerry Zucker or Jerry Garfinkle  Fax No: (843) 747-4092 |

 

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

 

C.            **This Lease shall be governedexclusively under the laws of the State of South Carolina. Each of the parties (i) irrevocablyconsents to the exclusive jurisdiction of any state or federal court locatedwithin Charleston County, South Carolina, and (ii) waives trial by a jury.**

 

D.            If any term or provision of this Lease orthe application thereof to any person or circumstance shall, to any extent, beinvalid or unenforceable, the remainder of this 

 

19

----

 

Lease, or the application ofsuch term or provision to persons or circumstances other than those as to whichit is held invalid or unenforceable, shall not be affected thereby and eachterm and provision of this Lease shall be valid and be enforced to the fullestextent permitted by law.

 

E.             Failure on the part of either party tocomplain of any action or non-action on the part of the other party, no matterhow long the same may continue, shall never be deemed to be a waiver by eitherparty of any of its rights hereunder. Acceptance by Landlord of the Base Rentor any other charges paid by Tenant hereunder shall not be or be deemed to be awaiver by Landlord of any default by Tenant, whether or not Landlord knows ofsuch default. No waiver at any time of any of the provisions hereof by eitherparty shall be construed as a waiver of any of the other provisions hereunderand a waiver at any time of any of the provisions hereof shall not be construedas a waiver at any subsequent time of the same provisions.

 

F.             Tenant acknowledges and agrees that thesubmission of this Lease to Tenant for its review and consideration shall notand does not constitute an offer to lease the Premises. Tenant and Landlordunderstand and agree that there can be no agreement for the lease of thePremises until all parties hereto have signed, delivered and accepted thisLease and any Security Deposit required pursuant to Section 24 hasbeen delivered and accepted.

 

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

 

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

 

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

 

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

 

K.            This Lease may only be amended by awriting specifically referencing this Subsection 27K and dulyexecuted by authorized officers for both parties.

 

20

----

 

INWITNESS WHEREOF, the parties hereto have duly executed this instrument underseal as of the day and year first above written.

 
| IN THE PRESENCE OF: |   | Landlord:                        |
|---------------------|--------|----------------------------------|
|                |   |                             |
|                |   | AEROSPACE/DEFENSE, INC.          |
|                |   |                             |
|                |   |                             |
|                |   | By:                              | /s/ M. Jerry Garfinkle |
|                |   | Name:                            | M. Jerry Garfinkle |
|                |   | Title:                           | Assistant Secretary 4/11/06 |
|                |   |                             |
|                |   |                             |
| IN THE PRESENCE OF: |   | Landlord:                        |
|                |   |                             |
|                |   | FORCE PROTECTION INDUSTRIES INC. |
|                |   |                             |
|                |   |                             |
|                |   | By:                              | /s/ Gordon R. McGilton |
|                |   | Name:                            | Gordon R. McGilton |
|                |   | Title:                           | Chief Executive Officer 4/7/07 |
|                |   |                             |
|                |   |                             |
| IN THE PRESENCE OF: |   |                             |
|                |   |                             |
|                |   | FORCE PROTECTION, INC.           |
|                |   |                             |
|                |   |                             |
|                |   | By:                              | /s/ Gordon R. McGilton |
|                |   | Name:                            | Gordon R. McGilton |
|                |   | Title:                           | CEO 4/7/07 |
|                     |        |                                  |  |  |  |  |  |

 

21

----