**Exhibit 10.12**

 

**SECOND AMENDMENT TO LEASE**

 

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

 

RECITALS

 

1.             ByIndustrial Lease effective as of January 15, 2006, as amended byinstrument dated as of May 1, 2006, entitled “First Amendment to Lease” (“**First Amendment**”), the Landlord leased unto Tenant certainpremises within Building No. 1 situated in an industrial project (the “**Project**”) located in Ladson (Charleston County), SouthCarolina. The Industrial Lease as amended by the First Amendment shallhereinafter be referenced collectively as the “**Lease**.”By the execution of this second Amendment, the parties intend to amend theLease according to the terms of Subsection 27K of the Lease. Eachcapitalized term used and not otherwise defined or modified herein shall havethe meaning ascribed 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 by adding a total of 37,551 square feet to Paragraph 1A, Clause (i) ofthe Lease which square footage is comprised of and added to the definition of “**Leased Area**” as of July 1, 2006:

 

A.            2,132 square feetcomprised of two areas [one area measuring approximately 13 feet times 64 feetfrom the east end of the mezzanine (adjacent the 468 square feet of themezzanine currently under lease to Tenant) located above D-Bay in Building No. 1and another area at the west end of the same mezzanine measuring approximately13 feet times 100 feet] as shown on Exhibit A to this Amendment;

 

B.            9,440 square feetcomprised of an area measuring approximately 59 feet times 160 feet at thesoutheast corner of C-Bay in Building No. 1 as shown on Exhibit Bto this Amendment (adjacent 2,301 square feet of C-Bay currently under lease toTenant);

 

C.            18,720 square feet offloor area (not including mezzanine areas) of D-Bay of Building No. 1representing the western portion of D-Bay (adjacent the 32,760 square feet ofD-Bay currently under lease to the Tenant) comprising an area measuringapproximately 117 feet times 160 feet and shown on Exhibit C tothis Amendment; and

 

D.            7,259 square feetcomprising areas shown as Office Area II, Restrooms, Breakroom, Storage Room andLunchrooms as shown as the cross-hatched areas on Exhibit D to thisAmendment.

 

For clarification, once all the additional square footage referenced insubsections A through D above have become added to and a part of the LeasedArea (and therefore the “**Premises**”) ashereinabove provided, the total square footage of Leased Area shall total 99,260square feet (26,180 square feet referenced in Clause (i) of Paragraph 1Aof the original Lease, plus 35,529 square feet referenced in the FirstAmendment and 37,551 square feet referenced above).

 

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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 Rentfor the Leased Area as hereinafter provided.

 

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 theother, the parties do hereby covenant and agree to amend and modify the Leaseas 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 ismodified by adding 37,551 square feet according to Recital 2 above for a totalsquare footage of Leased Area in Building No. 1 of 99,260 square feet.

 

3.             Paragraph2A is hereby amended by amending and restating the proviso clause of the firstsentence thereof as follows:

 

“...;provided, however, notwithstanding any provision of this Lease to the contrary,it is agreed, acknowledged and understood that either party, without liabilityto the other party, may terminate this Lease with respect to any portion or allof the Premises at any time during the Term of this Lease by giving no lessthan ninety (90) days prior written notice thereof to the other party.”

 

4.             Paragraph5B (vi) of the Lease is modified by adding the Hallways (shown on Exhibit D)adjacent to the offices and restrooms (leased under this Amendment) includedwithin the meaning of Common Areas.

 

5.             Tenantshall ensure that its employees and invitees do not enter the manufacturing andoffice areas of Building No. 1 not leased to the Tenant except for thesole purpose of using the most direct pedestrian route (i) leading fromthe door separating B-Bay (adjacent the Lunchrooms) and the Hallways shown on Exhibit Dto the Lunchrooms and (ii) leading from the office area currently leasedby Tenant (under Office Lease dated June 1, 2005) to C-Bay, which route isshown on Exhibit E. Landlord shall take precaution to ensure thatits employees and invitees confine themselves to the Premises and the directaccess routes referenced above.

 

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

 

A.                                   Pedestrianaccess across D-Bay to the stairs leading to the Mezzanine located above D-Bayfor access to that portion of the mezzanine not leased to the Tenant (see Exhibit A);

 

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B.                                     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 D-Bay. For clarification, this access area (which ismarked “**Access**” on Exhibit E) isretained by the Landlord in order to drive vehicles (such as, for example,switch engine, railroad engine, mobile crane and other vehicles) across D-Bayto Bays B and C and from time-to-time transport materials across this accessarea;

 

C.                                     Pedestrianaccess across and through the Breakrooms to the doors leading to and from thoserooms located adjacent to the Restrooms, Breakrooms and Storage Room whichare not leased to the Tenant (see Exhibit D);

 

D.                                    Pedestrianaccess into the main entrance and across the Lobby (shown on Exhibit D)to the Hallways allowing pedestrian access to and from the office areas notleased to the Tenant and to B-Bay; and

 

E.                                      Non-exclusiveuse of those certain Restrooms (shown on Exhibit D) leased underthis Amendment to the Tenant, which Restrooms are to be shared with theLandlord and its employees and other occupants and Tenants of Building No. 1.

 

The area reserved for access and use under this Paragraph 6 of thisAmendment shall not be blocked by either party during the term of this Lease.The parties agree to cooperate with each other so that neither partyunreasonably interferes with the business, operations, employees and inviteesof the other party while ingress and egress rights are being utilized by theLandlord as contemplated under this Section 6.

 

7.             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 ofthe 37,551 square feet to be added to the Leased Area according to Paragraph 2of this Amendment and has found them satisfactory for all purposes hereof andthe Tenant accepts the Leased Area in their present condition, “As-Is.” It iscontemplated that the Tenant will renovate the Office Area II referenced inParagraph 2D of the Recitals including installing new carpeting and HVACsystems. The Tenant agrees to coordinate its renovation efforts with theLandlord so as to not unreasonably interfere with the office areas and existingHVAC system currently servicing such office areas.

 

8.             Paragraph3A (a) is amended so that the entire subsection (a) shall readas follows:

 

(a)           For the Leased Area –

 

(i)                                     Beginningon the Commencement Date through March 31, 2006 –no Base Rent shall bedue.

 

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

 

(iii)                               FromJuly 1, 2006 through the remainder of the first Lease Year, the monthlyBase Rent shall be $31,018.75.

 

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

 

It shall also be the responsibility of theTenant, at its sole cost and expense to promptly, following the execution ofthis Amendment, to construct and maintain a 10-foot high chain-link fencebetween the boundary of the floor area leased by Tenant in Bays C and D ofBuilding No. 1 and the remaining portion of such Bays — for the purpose ofdelineating the Leased Areas in such Bays and for security purposes — toprotect all machinery, equipment and other items placed therein by the Tenantand according to Paragraph 12B(ii) the parties reaffirm that the “Landlordshall not be liable for any damage to or loss of such property and chattels,regardless of the cause of such damage or loss.”

 

10.           Itis acknowledged that the Landlord is investigating the parking lot in front(north) of the office area currently under lease to the Tenant. It isunderstood that once the Landlord’s investigation is completed, the Landlordanticipates repairing those areas of the parking lot requiring repair and/orresurfacing.

 

11.           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 facsimile transmission orelectronically “pdf” transmission, such transmission shall be deemed anexecuted original of this Amendment and of such signature.

 

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

 

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

 
|   | LANDLORD:                         |
|--------|-----------------------------------|
|   |                              |
|   | AEROSPACE/DEFENSE, INC.           |
|   |                              |
|   | By:                               | /s/ Jerry Garfinkle |
|   |                              |
|   | Its:                              | Assistant Secretary |
|   |                              |
|   |                              |
|   | TENANT:                           |
|   |                              |
|   | FORCE PROTECTION INDUSTRIES, INC. |
|   |                              |
|   | By:                               | /s/ Raymond Pollard |
|   |                              |
|   | Its:                              | COO 12 July 2006 |
|   |                              |
|   |                              |
|   | FORCE PROTECTION, INC.            |
|   |                              |
|   | By:                               | /s/ Gordon R. McGilton |
|   |                              |
|   | Its:                              | CEO 7/12/06 |

 

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