**Exhibit 10.16**

 

SECOND AMENDMENT TO LEASE

 

THIS SECONDAMENDMENT TO LEASE (“**Amendment**” or “**Second Amendment**”) is effective as of February 1, 2007 byand between **Aerospace/Defense, Inc.**, a SouthCarolina corporation (hereinafter the “**Landlord**”) and **Force Protection Industries, Inc.** (f/k/a Technical SolutionsGroup, Inc.) and **Force Protection, Inc.**(collectively, the “**Tenant**”).

 

Recitals

 

A.                                   ByIndustrial Lease entered into as of July 13, 2004, as amended by letter signedby the Tenant on July 18, 2006 (“**First Amendment**”),the Landlord leased unto Tenant certain premises within Building No. 2 situatedin an industrial project (the “**Project**”)located in Ladson (Charleston County), South Carolina. The Industrial Lease asamended by the First Amendment shall hereinafter be referenced collectively asthe “**Lease**.”  By the execution of this Second Amendment, theparties intend to amend the Lease as hereinafter provided. Each capitalizedterm used and not otherwise defined or modified herein shall have the meaningascribed thereto in the Lease.

 

B.                                     Atthe time the Lease was entered into as of July 13, 2004, and currently, thereexists a wall (the “**Wall**”) locatedacross the northern bay (the “**North Bay**”) ofBuilding No. 2 (see Exhibit A), which Wall is more particularly describedas follows:

 

The Wall is located approximately 202’ east of the western wall ofBuilding No. 2 and is approximately 50” high — from the floor to the ceilingjoist roof line. The Wall is constructed of concrete blocks from the floor to aheight of 12’ with the remainder of the Wall constructed of 5/8 inch sheet rockon each side over metal studs. There are also several masonry support-wallsections 1.5 concrete blocks wide (each block is approximately 12” wide) oneach side of the Wall from the floor to the ceiling to support the Wall and themetal studs. See Exhibit B for a more detailed drawing and Exhibit Cwhich is a series of 24 pictures taken of the Wall on January 31, 2007. Thereare two roll-up metal doors [one a Rytec electric high speed roll up door withelectronic controls 10’ (wide) by 15’ (height) and the other door a 10’ (wide)by 15’ (height) roll-up door with electronic operator] and one personnelwalk-through door more fully described and delineated in Exhibit B. Atthe existing crane-rails (located about 45’ above the floor), there are fourcrane-stops.

 

C.                                     Thefirst sentence of Section 10(a) of the Lease provides as follows:  “Tenant shall make no structural alterations,changes, additions or improvements (collectively “**Alterations**”)in or to the Premises without Landlord’s prior written consent, which consentshall not be unreasonably withheld.”

 

D.                                    TheTenant desires at its sole cost and expense (without contribution by theLandlord) to demolish and remove the Wall and crane-stops so that the North Bayis no longer divided by the Wall and the cranes can run the full length(approximately 600’) of the North Bay.

 

E.                                      Atthe request of the Tenant, the Landlord has agreed to consent to thedestruction and removal of the Wall and crane stops by the Tenant pursuant tothe terms, provisions, conditions and agreements hereinafter set forth.

 

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

 

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

 

2.                                       Asit pertains to the removal and demolition (hereinafter collectively “**demolition**”) of the Wall (an “**Alteration**”for purposes of Section 10 of the Lease), the parties reiterate the provisionsof Section 10(a)(i) and Section 10(c). During the demolition of the Wall, theTenant shall keep the area surrounding the Wall (whether or not within thePremises) in a neat, orderly and environmentally clean condition.

 

3.                                       Itis specifically acknowledged by the Tenant that the Landlord does not make anyclaim, representation, warranty or promise whatsoever about the condition orcompliance with law of the Wall.

 

4.                                       Duringthe demolition of the Wall, the Tenant shall use commercially reasonableefforts to salvage in good operating condition and deliver to the Landlord thethree doors currently within the Wall so that the Landlord may use them as itsees fit.

 

5.                                       Notwithstandingany term or provision contained in the Lease, the Tenant agrees to thefollowing: at least 60 days prior to the expiration or termination of theLease, the Tenant, at its sole cost and expense (and without contribution fromthe Landlord) shall rebuild the Wall in its current location (or at anotherlocation across the North Bay as may be designated by the Landlord) and as theWall now exists — that is, in rebuilding the Wall, the Tenant shall utilizesubstantially similar materials and shall use the same design. Forclarification and avoidance of doubt:

 

(i)                                     rebuildingthe Wall shall also include leaving three openings for and installing three newdoors (two roll-up metal doors and one personnel walk-through door) withsubstantially similar doors at approximately the same location where theexisting doors currently are situated and installing four crane-stops;provided, however, the Tenant shall be required to install new doors only whereit has been unable to salvage the existing door(s) in good operating conditionand deliver same to the Tenant during the demolition of the wall ascontemplated in Section 4 above;

 

(ii)                                  Tenantshall cause the work of rebuilding the Wall to be performed promptly,efficiently and in good and workmanlike manner by duly qualified and licensedcontractors, using first-grade materials, and in full compliance with alllocal, state and federal applicable laws, rules, regulations and ordinances;and

 

(iii)                               Forpurposes of Section 10(a)(i) and Section 10(c) of the Lease, the rebuilding ofthe Wall shall be considered an “**Alteration**.”

 

PROVIDED, HOWEVER, prior tocommencing the work to rebuild and reinstall the Wall as referenced above inthis Paragraph 5, the Tenant shall notify the Landlord in writing at least tendays prior to the commencement of such work (the “**Tenant’sNotice**”) and the Landlord shall have the absolute right within tendays of the receipt of the Tenant’s Notice to advise the Tenant

 

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[only by written notice signedby a senior officer of the Landlord (and not by any other notice — verbal orotherwise) — the “**Landlord’s Notice**”]that the rebuilding of the Wall will not be required. For clarification andavoidance of doubt, if, after the Tenant’s Notice is delivered to the Landlord,a Landlord’s Notice to the Tenant is not given to the Tenant within the ten-dayperiod, the Tenant shall automatically, without any further notice requiredfrom the Landlord, commence the work to rebuild the Wall as provided above inthis Section 5.

 

6.                                       ThisAmendment may be executed in several counterparts, each of which shall bedeemed an original and such counterparts shall constitute by 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.

 

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

 

[THE REMAINDER OF THIS PAGEINTENTIONALLY REMAINS BLANK]

 

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IN WITNESSWHEREOF, the parties hereby have duly executed this Amendment under seal as ofthe day and year first above written.

 
|   | LANDLORD:                         |
|--------|-----------------------------------|
|   |                              |
|   | AEROSPACE/DEFENSE,  INC.          |
|   |                              |
|   | By:                               | /s/ M. Jerry  Garfinkle |
|   |                              |  M.  Jerry Garfinkle |
|   |                              |  Its:  Assistant Secretary |
|   |                              |
|   | TENANT:                           |
|   |                              |
|   | FORCE PROTECTION INDUSTRIES, INC. |
|   |                              |
|   | By:                               | /s/ Raymond  Pollard |
|   |                              |   |
|   | Its:                              | COO |
|   |                              |
|   | Force  Protection, Inc.           |
|   |                              |
|   | By:                               | /s/ Gordon  R. McGilton |
|   |                              |   |
|   | Its:                              | CEO |

 

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