**Exhibit 10.6**

 

**GROUND LEASE**

 

THIS GROUND LEASE (“**Lease**”) isentered into as of the 1st day of February, 2007, by and between **AEROSPACE/DEFENSE, INC**., a South Carolina corporation (“**Landlord**”), and **FORCE PROTECTIONINDUSTRIES, INC**., a Nevada corporation and **FORCEPROTECTION, 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 /THEBUILDING.**

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

 

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

 

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

 

Approximately 80,000 square feet of warehouse 2,500 square feet ofoffices and 8,000 square feet of a carpenter shop as delineated and shown on ExhibitsC and C-1.  The Tenant agrees tocommence construction of the Building together with all improvements connectedand associated therewith (hereinafter collectively the “**Building**”or “**Building No. 6**”) within thirty(30) days of the Commencement Date of this Lease and agrees that the Buildingwill be substantially completed within one hundred twenty (120) days of theCommencement Date - - all without unreasonably interfering with the otheroccupants and tenants of the Project.  Inorder to avoid having the Building interfere with the future use of therailroad 

 

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

 

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

 

Assuming approval of the final plans andspecifications for the construction of the Building, the Tenant agrees that nosubstantial modification shall be made in the final plans and specificationswithout the Landlord’s prior written consent.

 

2.**             TERM**

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

 

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

 

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

 

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

 

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pursuantto Section 2C of the Building No. 2 Lease, and if the Building No. 2Lease expires or terminates, this Lease shall also expire and terminate at thesame time.  (See also, cross-defaultprovision in Section 20 of this Lease.)

 

3.**             BASE RENT.**

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

 

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

 

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

 

B.            Commencingwith the first day of the second Lease Year, to-wit:  February 1, 2008 (“**FirstAdjustment Date**”) and on the first day of each Lease Year thereafter(“**Subsequent Adjustment Date**”) during theInitial Term and any Option Period, the amount of the monthly Base Rent dueunder this Lease shall be adjusted to an amount equal to the product of thethen-current monthly Base Rent multiplied by a fraction having as its numeratorthe Consumer Price Index (hereinafter defined) published most recently prior toapplicable Adjustment Date and as its denominator the Consumer Price Indexpublished most recently prior to Commencement Date.  In the event the new Base Rate cannot be determinedas of the Adjustment Date, Tenant shall continue to pay the Base Rent dueduring the prior Lease Year until Landlord notifies Tenant of the Base Rent,and, within ten (10) days after deliver of such notice, Tenant shallreimburse Landlord for any accrued but unpaid increase.  In no event shall the monthly Base Rent, asadjusted on any Adjustment Date, be less than three percent (3%) over the BaseRent payable during the prior Lease year, nor increase by more than sevenpercent (7%) over the monthly Base Rent payable during the prior Lease Year.

 

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

 

D.            Allmonthly Base Rent payments and any other payments dues Landlord under thislease shall be made without any setoff or deduction whatsoever and withoutprior notice or demand and shall be payable and delivered to:

 

Aerospace/Defense, Inc.

4838 Jenkins Avenue

North Charleston, SC 29405

 

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

 

4.**             UTILITIES.**

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A.            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 Subsections 4A (a), (b) and(c) hereof, Tenant shall reimburse Landlord for Landlord’s cost ofproviding utility services to the premises on the basis of the Landlord’sreasonable determination of Tenant’s usage of same.  With respect to electricity, the amount forwhich Landlord will be reimbursed includes both the consumption factor andso-called “demand” or “standby” factor, if the latter factor is employed forbilling purposes by the company providing electricity.  Tenant will also procure, or cause to beprocured, without cost to Landlord, any and all necessary permits, licenses, orother authorizations required for the lawful and proper installation andmaintenance upon the Premises of wires, pipes, conduits, tubes, and otherequipment and appliances for use in supplying any of the utility services toand upon the Building and Premises. Landlord, upon request of Tenant, and at the sole expense and liabilityof Tenant, will join with Tenant in any application required for obtaining orcontinuing any of the foregoing services; provided Landlord shall not be liablefor the same.

 

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

 

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

 

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(c)           Withoutthe express prior written consent of the Landlord (pursuant to any writtenamendment to this Lease signed by both parties), the Tenant agrees that it willnot wash machinery within the Premises.

 

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

 

C.            If theparties are unable to agree upon Tenant’s usage of utilities, Tenant shall havethe option either (i) to install, at Tenant’s expense, separate meters orsubmeters, or (ii) to cause Landlord to employ (not more than once eachLease Year) a mutually acceptable engineering firm, whose fess will be equallyshared by Landlord and Tenant, to determine Tenant’s share of utilitiesconsumed in the Project by usage survey. Tenant will be responsible for the maintenance of separate meters orsub-meters.  Until any such engineeringfirm determines Tenant’s share of any disputed utility charges, the Tenantagrees to reimburse all amounts invoiced by the Landlord based on the Landlord’sestimate of Tenant’s share of utility charges.

 

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

 

5.**             ADDITIONALRENT/TAXES AND FEES.**

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

 

(i)            If thepremises is separately assessed and billed, such impositions shall be paidprior to delinquency by the Tenant directly 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.

 

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(ii)           As usedhere, the term “**Impositions**” shall include anyform of real estate tax or assessment, general, special, ordinary orextraordinary, and any license fee, or commercial rental tax base don the grossrents paid hereunder, improvement bond or bonds issued by Commencement Date ofthis Lease, levy or tax imposed on the Premises by any authority having thedirect or indirect power to tax, including any city, state or federal government,or any school, agricultural, sanitary, fire, street, drainage or to theimprovement district thereof, as against any legal or equitable interest ofLandlord’s right to rent therefrom (provided such tax is assessed on grossrents payable hereunder), and as against Landlord’s business of leasing thepremises (provided such tax is assessed on gross rents payable hereunder).  With respect to any assessment which underthe laws then in force may be paid in installments, there will be includedwithin the meaning of the term “Impositions” for any tax fiscal year only thecurrent annual payment.  Impositions willnot include (i) any franchise, gift, estate, inheritance, conveyance,transfer, or other tax assessed against Landlord or Landlord’s heirs,successors or assigns, or (ii) any income excess profit or other tax,assessment, charge or levy on the net rent payable by Tenant under this Lease.

 

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

 

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

 

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

 

B.            Tenantshall, in addition to the monthly Base Rent and pro rata portion of Impositionsreferred to above, also be responsible for Tenant’s pro rata portion of allexpenses 

 

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

 

(i)            CommonArea Charges will not include Impositions (unless the Premises is aseparate tax parcel), cost of capital improvements or repairs (provided suchrepairs cannot be attributed to Tenant), including, without limitation, cost ofconstructing leasehold improvements for any other lessee of Project, legal orbrokerage fees associated with any other 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.

 

(ii)           Tenant’spro rata share of Common Area Charges (on an annualized basis) will notincrease in any one calendar year after the first full calendar year of theTerm by more than six percent (6%) of Tenant’s pro rata share of Common AreaCharges for the previous full calendar year.

 

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

 

(iv)          Onceeach calendar year, Landlord shall deliver a statement (“**CAMStatement**”) to Tenant showing: the amount of actual Common AreaCharges for the preceding calendar year, with a breakdown of amounts by majorcategories of Common Area Charges and Tenant’s pro rata share and the detailfor determining same. Within thirty (30) days of the receipt of the CAMStatement, Tenant shall pay Landlord Tenant’s share of any deficiency inpayments made by the Tenant during the preceding calendar year of Tenant’sproportionate share of the Common Area Charges; the Tenant shall be entitled toa credit in the next invoice for monthly Base Rent becoming due and payablefollowing the receipt of the CAM Statement for any excess payments of CommonArea Charges made by the Tenant during the preceding calendar year.

 

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

 

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(vi)          Theterm **“Common Areas”**as used inthis Lease means the roadways of the Project (or any substitute therefore) andthe common parking areas - - all as shown on Exhibit B. Landlordhereby grants to Tenant and Tenant’s customers, invitees and employees for theentire Term, the non-exclusive right to use, in common with Landlord, Landlord’sinvitees and employees and with the other lessees and occupants of Building andtheir respective customers, invitees and employees, the Common Areas for theirintended purposes, subject to reasonable rules and regulations (“**Rules and Regulations**”) to be promulgated by Landlordfor the convenience and safety of all of the lessees, occupants and users ofthe Building; provided, Tenant shall be solely responsible for, and defend,hold harmless 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. Landlord will have the rightto make reasonable modifications and additions to the Rules andRegulations from time to time. The Tenant shall cause its employees andinvitees using the Premises to park in the common area parking lots designatedin the Building No. 2 Lease.

 

(vii)         During the Term, the Landlord will maintainthe Common Areas in reasonable order; provided, however, the Tenant shall causeits employees, customers, agents and invitees to keep the Common Areas in neat,clean, trash free and orderly condition, ordinary wear and tear excepted. Ifthe necessity for repairs to or cleaning of any Common Areas shall have arisenfrom or shall have been caused by the negligence or willful acts of the Tenant,its agents, concessionaires, officers, employees, licensees, invitees orcontractors, Landlord may make or cause the same to be made, but shall not beobligated to do so, and Tenant agrees to pay to Landlord promptly upon Landlord’sdemand, 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. Notwithstandinganything contained in this Lease to the contrary, nothing contained in thisLease shall obligate the Landlord to provide security to or within the CommonAreas or to protect the Tenant or its employees and invitees from acts andactions of employees and invitees of other tenants within the Project or ofother third parties occurring within or upon the Project (of which the Premisesand the Common Areas are a part).

 

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

 

6.             **GENERALASSISTANCE**.  TheTenant shall have the right (i) to seek tax, utility and other abatementsand economic development incentives covering the Premises (such as, forexample, fee in lieu of real estate and personal property taxes, jobdevelopment credits, grants for improvements by the Tenant to the Premises)(collectively, “**Abatements and Incentives**”), and (ii) tocontest the amount or validity of Impositions covering the Premises byappropriate administrative and legal proceedings - - both (i) and (ii) above,brought either in Tenant’s name, Landlord’s name or jointly with Landlord, asTenant may deem appropriate, by counsel selected and engaged by Tenant.Landlord will execute and deliver to Tenant whatever documents may bereasonably requested by the Tenant to permit the Tenant to seek such Abatementsand Incentives and to 

 

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

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7.**             USE.**

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

 

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

 

8.**             COMPLIANCE WITHLAWS AND GOVERNMENTAL REGULATIONS.**

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A.            Tenantshall at all times during the Term be in full compliance with any and allfederal, state and local governmental rules and regulations, ordinancesand similar provisions having the force and effect of law (collectively, “**Laws**”) which are or would be applicable to the businessbeing conducted in the Premises. In particular, all machinery andequipment installed within the Premises shall be used, maintained and operatedby the Tenant in full compliance with all laws, rules and regulations ofthe State of South Carolina and the United States Federal Government and theirrespective agencies. In addition and for clarification, the Tenant, at its solecost and expense, must obtain all necessary or required permits,authorizations, and licenses from appropriate governmental agencies to conductits business within or about the Premises.

 

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

 

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9.**             MAINTENANCE ANDREPAIR.**

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

 

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

 

C.            Inaddition to the foregoing, Tenant shall, at its expense, keep the Premises,including all driveways, parking areas and sidewalks, clean and free fromdebris, rubbish and other trash and shall store all such debris, rubbish andtrash in appropriate receptacles. Tenant shall arrange for regular pickup ofsuch debris, rubbish and trash at its expense. Tenant shall not operate anincinerator or burn any debris, rubbish or trash on the Premises.

 

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

 

10.**           CHANGES, ALTERATIONSAND NEW CONSTRUCTION BY THE TENANT.**

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A.            Tenantshall make no structural alterations, changes, additions or improvements(individually, an “**Alteration**” orcollectively “**Alterations**”) in or to thePremises without Landlord’s prior written consent. (See Section 1C relatedto the Landlord’s approval of -the final plans and specifications of theBuilding.) In the event of Landlord’s consent, any such Alteration(s) shall besubject to the following:

 

(i)            AnyAlteration shall be at the cost and expense of Tenant and shall be madepromptly, in a good workmanlike manner, and in full compliance with allapplicable permits, authorizations, building and zoning laws, and any otherapplicable statute, rule or regulation of any governmental agency orauthority having jurisdiction there over.

 

(ii)           Any suchAlteration shall at the expiration of Term become the property of the Landlord.For clarification, the Building, including, without limitation, the Building(including any partitions, carpets, lighting fixtures, doors, and ceilingstherein) and any fences shall remain with the Premises and shall be surrenderedto Landlord at the expiration or 

 

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

 

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

 

C.            No workwhich Landlord permits or requires Tenant to perform pursuant to this Lease,whether in the nature of erection, construction, alteration or repair, shall bedeemed to be for the immediate use and benefit of Landlord so that nomaterialmen’s, laborer’s, mechanic’s or other lien shall be alleged against theestate of Landlord by reason of any consent given by Landlord to Tenant toimprove the Premises or the Project. Tenant shall pay promptly all personsfurnishing labor or materials with respect to any work performed by or forTenant in, on or about the Premises. In the event any mechanic’s or other lienshall at any time be filed against the Project (of which the Premises are a part),or any interest therein by reason of any labor, services or materials performedor furnished, or alleged to be performed or furnished to or for the benefit ofTenant or to anyone holding the Premises through or under Tenant. Tenant shallcause the same to be discharged of record or bonded to the satisfaction ofLandlord (both as to form of documentation and as to surety company) withinthirty (30) days after notice of the filing thereof. If Tenant shall fail tocause such lien to he so discharged or bonded within such thirty (30) days,then in addition to any other right for remedy of Landlord, Landlord may, butshall not be obligated to, discharge the same by paying the amount claimed tobe due or by deposit or bonding proceedings, and the amount so paid or pledgedby Landlord, including reasonable attorney’s fees and surety costs incurred byLandlord procuring the discharge of such lien, together with interest thereonat the rate of eighteen (18%) percent per annum or the highest amount allowedby law, shall be immediately due and payable by Tenant to Landlord upon demandas additional rent(s). Tenant shall indemnify, defend and save Landlordharmless from and against any and all claims (including but not limited toclaims of unjust enrichment and claims based on quasi-contract), actions,demands, damages, liability and expense, including attorney’s and otherprofessional fees, arising from or related to, wholly or in part, directly orindirectly, any labor, services or materials performed or furnished or allegedto be performed or furnished to or for the benefit of Tenant or to anyoneholding the Premises or the Project through or under Tenant, regardless ofwhether such work or material improved or increased the value of the Premisesor the Project as a whole.

 

11.**           INDEMNIFICATION.**

** **

Tenant agrees, to the extent not expresslyprohibited by law, to pay, and to protect, defend, indemnify and save harmlessLandlord from and against all liabilities, damages, costs, expenses (includingreasonable attorneys’ fees and expenses), causes of action, suits, claims,demands or judgments (collectively, “Liabilities”) of any nature whatsoeverwhich may be imposed upon or incurred by or asserted against Landlord by reasonof (i) any accident, injury to or illness or death of any person, or any damage to propertyoccurring on the Premises during 

 

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

 

12.**           INSURANCE.**

** **

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

 

B.            GeneralLiability.  Tenant will also 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 any part of the Premises. Such insurancepolicy will have limits of not less than Three Million and No/100ths Dollars($3,000,000) per occurrence, in respect to bodily injury or death and not lessthan One Million and No/100ths Dollars ($1,000,000) per occurrence in respectto property damage and provide contractual coverage of Landlord’s liability toTenant assumed under the indemnification provisions of this Lease. Landlordshall be named as an additional insured under the insurance required under thisSection 12 and the Tenant shall deliver to Landlord a certificateevidencing such insurance within ten (10) days of the execution of thisLease and thereafter upon reasonable request. All insurance required of theTenant hereunder shall be primary and not excess with any insurance,coinsurance or self insurance maintained by Landlord.

 

C.            OtherMatters. All insurance required in this Section 12 and all renewals thereofwill be issued by companies authorized to transact business in the State ofSouth Carolina, and reasonably acceptable to Landlord. All general liabilityinsurance policies will expressly provide that the policies will not becanceled or altered without thirty (30) days’ prior written notice to Landlord.Tenant may satisfy its obligations under this Paragraph by appropriateendorsements of its blanket insurance policies.

 

D.            AdditionalInsured. All policies of liability insurance that Tenant is obligated tomaintain according to this Lease (other than any policy of worker’scompensation insurance) will name Landlord as an additional insured.Original certificates of insurance or copies of the original policies (togetherwith copies of the endorsements naming Landlord as an additional insured) andevidence of the payment of all premiums of such policies will be delivered toLandlord prior to Tenant’s occupancy of the Premises and from time to time atleast thirty (30) days prior to the expiration of the term of each policy. Allpublic liability, property damage liability, and casualty policies maintainedby Tenant will be written as primary policies, not contributing with and not inexcess of coverage that Landlord may carry.

 

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

 

13.**           DAMAGE AND DESTRUCTION BY CASUALTY.**

** **

A.            Damagesor Destruction.  Subject tosubsections 13 B and C below, if the Building or other improvements on thePremises are damaged or destroyed by reason of fire, the elements, unavoidableaccident or any other casualty, Tenant will as soon as practicable at itsexpense, repair or rebuild the Building and all improvements located on thePremises to substantially the same design and condition as the Building and improvementswere in prior to such damage or destruction; Tenant will prosecute the repairsor rebuilding to completion with due diligence, subject, however, to strikes,lockouts, acts of God, embargoes, governmental restrictions, and other causesbeyond Tenant’s reasonable control; Tenant will obtain and deliver to Landlorda temporary or final certificate of occupancy before the Premises arereoccupied for any purpose. The repairs or rebuilding will be completed freeand clear of mechanics’ or other liens, and in accordance with the buildingcodes and all applicable laws, ordinances, regulations, or orders of any state,municipal, or other public authority affecting the repairs or rebuilding, andalso in accordance with all applicable covenants, easements and restrictionsaffecting the Premises and all requirements of the insurance ratingorganization, or similar body, and of any liability insurance company insuringagainst liability for accidents related to the Premises.

 

B.            RentAbatement.  If, as a result of acasualty to the Building, any portion of the Building is rendered untenable andunusable, the Base Rent shall be equitably suspended or abated for that portionof the Building rendered untenable and unusable until the Tenant shall havesubstantially completed the repairs to that portion of the wilding damaged bysuch casualty.

 

C.            DamageDuring Last Two Years. Notwithstanding the above provisions, if at any time during the last two(2) years of the Term the Building is so damaged by fire or otherwise thatthe cost of restoration exceeds fifty (50%) percent of the replacement value ofthe Building (exclusive of foundations) immediately prior to the damage, Tenantmay, within thirty (30) days after such damage, give notice of its election notto rebuild the Building and to terminate this Lease and, subject to the furtherprovisions of this paragraph, this Lease will cease as of the date of suchcasualty if Tenant so elects to terminate this Lease. Rent will be apportionedand paid to the time of termination. If this Lease is so terminated, Tenantwill have no obligation to repair or rebuild, but the entire insurance proceedswill belong to Landlord; provided, however, Landlord shall have no interest orclaim to any insurance proceeds received for Tenant’s personal property, tradefixtures, equipment or Tenant’s lost income or wages.

 

14.**           CONDEMNATION.**

** **

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

 

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

 

B.            Tenant,at Tenant’s cost and expense, shall be entitled to separately claim, in anycondemnation proceeding, any damages payable for movable trade fixtures andleasehold improvements paid for and installed by Tenant without anycontribution or reimbursement therefore by Landlord, and for Tenant’s loss ofbusiness, and for Tenant’s relocation costs; provided Landlord’s award is notreduced or otherwise adversely affected thereby.

 

15.**           SUBORDINATION; NONDISTURBANCE**

** **

A.            UponLandlord’s written request, Tenant will execute and deliver to Landlord anagreement in recordable form subordinating Tenant’s rights to the lien of any mortgagehereafter encumbering the Premises. Tenant, however, will not be required tosubordinate Tenant’s rights hereunder to any mortgage unless and until theholder of such mortgage executes and delivers to Tenant a written agreementproviding in substance (i) that so long as Tenant faithfully dischargesTenant’s obligations under this Lease, Tenant’s right of possession to thePremises and other rights under this Lease will not be affected by any defaultby Landlord under any instrument creating or secured by such mortgage, and (ii) thatin the event of foreclosure or any other enforcement of such mortgage, therights of Tenant hereunder will expressly survive and this Lease will continuein full force and effect. If any mortgage, trustee or ground lessor shall electto have this Lease prior to the lien of its mortgage, deed of trust or groundlease, and shall give written notice thereof to Tenant, this Lease shall bedeemed prior to such mortgage, deed of trust, or ground lease, whether thisLease is dated prior or subsequent to the date of said mortgage, deed of trustor ground lease or the date of recording thereof.

 

B.            Landlordrepresents and warrants that no lien encumbers the Premises on the date of thisLease.

 

16.**           NONWAIVER.**

** **

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

 

17.**           QUIET ENJOYMENT.**

** **

If Tenant pays the rent Tenant is obligatedhereunder to pay, and observes all other terms, covenants and conditionshereof, Tenant may peaceably and quietly have, hold and enjoy the Premisesduring the Term, subject, however, to all the terms of this Lease.

 

18.**           ASSIGNMENT ANDSUBLETTING.**

** **

A.            Tenantshall not sublet the Premises, nor any part thereof, nor assign, or otherwisedispose of this Lease or any interest therein, or any part thereof, withoutLandlord’s prior written consent in each of the foregoing cases, which consentshall not be unreasonably 

 

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withheld or delayed. Landlord’sdisapproval of a proposed assignee or sublessee will be considered reasonableif the proposed assignee or sublessee is not of a generally comparable qualitywith Tenant, if the proposed use of the Premises is not compatible with thePremises, or if the proposed assignee or sublessee is not the same assignee orsublessee, as the case may be, of the Building No. 2 Lease.

 

B.            Notwithstandingthe provisions of Section 18A hereof, Tenant may assign or subletthe Premises, or any portion thereof, without Landlord’s consent but with priorwritten notice to the Landlord, to any corporation that controls, is controlledby or is under common control with Tenant, or to any corporation resulting fromthe merger or consolidation with Tenant, or to any person or entity that acquiresall the assets of Tenant as a going concern of the business that is beingconducted on the Premises. Tenant and any guarantor of the obligations ofTenant under this Lease shall remain liable despite any assignment or subleaseof this Lease by Tenant pursuant to this Section 18.

 

19.**           ENTRY.**

** **

Landlord, and any mortgagee, and theirrespective duly authorized representatives shall have the right to enter thePremises at all reasonable times for the purposes of inspecting the conditionsof same, and making such repairs, alterations, additions, or improvementsthereto as may be necessary or desirable if Tenant fails to do so as requiredhereunder (but the Landlord shall have no duty whatsoever to make any suchinspections, repairs, alterations, additions, or improvements).

 

20.**           DEFAULT.**

** **

A.            Thefollowing shall be defined and deemed as an “Event of Default” by Tenant: (i) ifTenant shall default in the payment of the Base Rent or any additional rent,utility charges (referenced in Section 4), and amounts due the Landlordunder Section 5, and in any other section of this Lease, and ifTenant shall fail to cure said default within fifteen (15) days after receiptof notice of such default from Landlord; or, (ii) if Tenant shall defaultin the performance or observance of any other material 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 of noticeof said default from Landlord or if such default is of a nature which cannot becorrected in thirty (30) days, if Tenant shall fail to commence to cure samewithin thirty (30) days and thereafter diligently pursue such cure tocompletion, or (iii) if an Event of Default (as that term is defined ineach of the Leases referenced in this subsentence (iii)) shall occur in theBuilding No. 2 Lease.

 

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

 

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

 

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

 

2)             torelet the Premises or any part(s) thereof for such term or terms (which mayextend beyond the Term) and at such rental(s) and upon such other terms andconditions as Landlord in Landlord’s sole discretion may deem advisable.Landlord shall have the right from time to time to make such alterations andrepairs as may be reasonably necessary in order to relet the Premises. Uponeach such reletting all rentals received by the Landlord from such relettingshall be applied, first, to the payment of any indebtedness (other than rentsdue hereunder) of Tenant to Landlord, second, to the payment of any costs and expensesof such reletting, including, without limitation, reasonable attorneys’ feesand of the cost of such alterations and repairs, third, to the payment of rentsdue and unpaid hereunder; and the residue, if any, shall be held by Landlordand applied in payment of future rents and other payments required to be madeby Tenant hereunder as the same may become due and payable hereunder, with theright reserved to Landlord to bring such action(s) or proceeding(s) for therecovery of any deficits remaining unpaid without being obliged to await theend of the term for a final determination of Tenant’s account, and thecommencement or maintenance of any one or more actions for further accrualspursuant to the provisions of this Section. If such rentals to be paid duringthat month by Tenant hereunder, Tenant shall pay any such deficiency toLandlord. Such deficiency shall be calculated and paid monthly subject toLandlord’s right of action(s) or proceeding(s) as aforesaid. Notwithstandingany such reletting without termination, Landlord may at any time thereafterelect to terminate this Lease for 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 all damagesLandlord may incur by reason of such breach as damages for loss of the bargainand not as a penalty, including the cost of recovering the Premises, reasonableattorneys’ fees, and including the present value determined by using a discountrate of eight percent (8%), at the time of such termination, of the excess ifany, of the amount of rental and charges equivalent to rental reserved in thisLease for the remainder of the Term, over the aggregate rental value of thePremises for the remainder of such time, all of which shall be immediately dueand payable from Tenant to Landlord. If any laws shall validly limit the amountof the damages provided for in the immediately preceding sentence to less thanthe amount above agreed upon, Landlord shall be entitled to the maximum amountallowable under such laws.

 

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

 

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 

 

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trust covering the Premiseswhose name and address shall have theretofore been furnished to Tenant inwriting, specifying wherein Landlord has failed to perform such obligation;provided, however, that if the nature, of Landlord’s obligation is such thatmore than thirty (30) days are required of performance then Landlord shall notbe in default if Landlord commences performance within such 30-day period andthereafter diligently prosecutes the same to completion. In the event Landlordfails to discharge any obligation set forth in this Lease on or before the datesuch obligation or payment is due, Tenant may, at Tenant’s option, dischargesuch obligation. Tenant shall use reasonable efforts to mitigate its damagesafter a default by the Landlord. In the event Tenant elects to dischargeLandlord’s obligation(s), Landlord agrees to reimburse Tenant on demand for theamount of expenses incurred by Tenant.

 

21.**           ENVIRONMENTALPROVISIONS.**

** **

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

 

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

 

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

 

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

 

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

 

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

 

B.            Landlordshall defend, indemnify, protect and hold Tenant harmless against Damagesresulting from or arising out of the following Hazardous MaterialsContamination or Environmental Conditions:

 

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

 

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

 

C.            Tenantshall defend, indemnify, protect and hold Landlord harmless against all Damagesresulting from or arising out of Hazardous Materials Contamination orEnvironmental Conditions existing or occurring within the Premises or any otherportion of the Project and caused by Tenant or a Tenant-Related Party, but onlyto the extent not caused by Landlord or a Landlord-Related Party.

 

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

 

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

 

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

 

22.**           SURRENDER OF TENANT.**

** **

A.            Tenantwill surrender possession of the Premises and remove all goods and productionequipment and other personal property owned by Tenant at the end of the Term,or at such other time as Landlord may be entitled to reenter and takepossession of the Premises pursuant to any provision of this Lease, and Tenantshall leave the Premises broom clean and in good order and condition, ordinarywear and tear excepted, except in the event of termination due to fire or othercasualty pursuant to Section 13 or termination due to condemnationpursuant to Section 14. Tenant shall deliver to Landlord all keys,locks and other fixtures connected with the Premises (such fixtures shallinclude, but are not limited to: cranes, doors (interior and exterior), HVACunits, roof fans, truck doors, truck, truck docks, and lights) in good repair,order and condition. In default of such surrender of possession and removal ofgoods and chattels at the time aforesaid, Tenant will pay to Landlord the rentset forth in this Lease for such period as Tenant either holds over possessionof the Premises or allows Tenant’s goods and production equipment or otherpersonal property at such time to remain in the Premises, and in additionthereto, statutory penalties and all other damages which Landlord shall sufferby reason of 

 

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Tenant’s holding over inviolation of the terms and provisions of this Lease, including, withoutlimitation, all reasonable claims for damages made by any succeeding tenant orpurchase of the Premises against Landlord which may be founded upon delay byLandlord in giving possession of the Premises to such succeeding tenant orpurchaser, so far as such damages are occasioned by the unlawful holding overof Tenant.

 

B.            Tenantshall have the absolute right to remove all of Tenant’s goods, productionequipment, and other personal property from the Premises at any time during theTerm.

 

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

 

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

 

E.             Theliability and the obligations of Tenant under this Section shall survivethe termination of this Lease.

 

23.**           FORCE MAJEURE.**

** **

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

 

24.**           SECURITY DEPOSIT.**

** **

No security deposit shall be required.

 

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25.**           COMMISSIONS.**

** **

Both Landlord and Tenant acknowledge that noreal estate broker is involved with respect to this Lease and the negotiationsthereof. Both parties agree to hold each other harmless from any claims forcommissions arising out of this Lease.

 

26.**           ESTOPPELCERTIFICATE.**

** **

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

 

27.**           MISCELLANEOUS PROVISIONS.**

** **

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

 
| TO TENANT:                              |                    | TO LANDLORD:                 |
|-----------------------------------------|-------------------------|------------------------------|
|                                    |                    |                         |
| Force  Protection, Inc.            |                    | Aerospace/Defense, Inc. |
| Force  Protection Industries, Inc. |                    | 4838 Jenkins  Avenue         |
| 9801 Highway  78                        |                    | North  Charleston, SC 29406  |
| Ladson, SC  29456                       |                    |                         |
|                                    |                    |                         |
| ATTN:                                   | Raymond W.  Pollard and |                         | ATTN: Jerry  Zucker and Jerry Garfinkle |
|                                    | John F.  Wall, III |                         | Fax No:  (843) 747-4092 |
| Fax No:  (843) 553-1311                 |                    |                         |

 

B.            It isthe intention of the parties hereto to create the relationship of Landlord andTenant, and no other relationship whatsoever, and unless expressly otherwiseprovided herein nothing herein shall be construed to make the parties heretoliable for any of the debts, liabilities or obligations of the other party.

 

C.            **This Lease shall be governedexclusively under the laws ofthe State of South Carolina. Each of the parties (i) irrevocably consents to the exclusivejurisdiction of any state orfederal court located within Charleston County, South Carolina, and (ii) waives trial by a jury.**

 

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D.            If anyterm or provision of this Lease or the application thereof to any person orcircumstance shall, to any extent, be invalid or unenforceable, the remainderof this Lease, or the application of such term or provision to persons or circumstancesother than those as to which it is held invalid or unenforceable, shall not beaffected thereby and each term and provision of this Lease shall be valid andbe enforced to the fullest extent permitted by law.

 

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

 

F.             Tenantacknowledges and agrees that the submission of this Lease to Tenant for itsreview and consideration shall not and does not constitute an offer to leasethe Premises. Tenant and Landlord understand and agree that there can be noagreement for the lease of the Premises until all parties hereto have signed,delivered and accepted this Lease.

 

G.            Thecaptions of the several Sections and Subsections of this Lease and any table ofcontents are not a part of the context hereof and shall be ignored inconstruing this Lease. They are intended only as aids in locating variousprovisions hereof.

 

H.            Nothingcontained in this Lease shall be construed so as to confer upon any other partythe rights of a third party beneficiary except the rights contained herein forthe benefit of a mortgagee of the Landlord and except as provided in thefollowing Subsection (I).

 

I.              Exceptas expressly otherwise provided herein, the terms, covenants and conditionshereof shall inure to the benefit of and shall be binding upon Landlord andLandlord’s successors and assigns and the terms, covenants and indentureshereof shall inure to the benefit of and shall be binding upon Tenant andTenant’s successors, legal representatives, and permitted assigns.

 

J.             Thisconstitutes the entire and complete agreement between the parties with respectto its subject matter. This Lease has been mutually negotiated by the partiesand no rule of construction shall be implied based upon the presumeddrafter or author of this Lease.

 

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

 

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

 
| IN THE PRESENCE OF: | Landlord:             |
|---------------------|-----------------------|
|                |                  |
|                |                  | AREOSPACE  DEFENSE, INC. |
|                |                  |
|                | By:                   | /s/ M. Jerry  Garfinkle |   |
|                | Name:                 | M. Jerry  Garfinkle |   |
|                | Title:                | Assistant  Secretary |   |
|                |                  |
|                |                  |
| IN THE PRESENCE OF: | Tenant:               |
|                |                  |
|                |                  | FORCE  PROTECTION INDUSTRIES INC. |
|                |                  |
|                | By:                   | /s/ Raymond  W. Pollard |   |
|                | Name:                 | Raymond W.  Pollard |   |
|                | Title:                | COO |   |
|                |                  |
|                |                  |
| IN THE PRESENCE OF: | FORCE PROTECTION INC. |
|                |                  |
|                |                  | By: | /s/ Gordon  R. McGilton |   |
|                | Name:                 | Gordon R.  McGilton |   |
|                | Title:                | CEO |   |
|                     |                       |  |  |  |  |  |

 

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