EXHIBIT 10.3
 


SUBSCRIPTION AGREEMENT


 


THIS SUBSCRIPTION AGREEMENT (this “Agreement”), dated as of November 18,
2005, by and among Force Protection, Inc., a Nevada corporation (the “Company”), and the subscribers identified
on the signature page hereto (each a “Subscriber”
and collectively “Subscribers”).


 


WHEREAS, the Company and the Subscribers are executing and
delivering this Agreement in reliance upon an exemption from securities
registration afforded by the provisions of Section 4(2) and/or
Regulation D (“Regulation D”) as
promulgated by the United States Securities and Exchange Commission (the “Commission”) under the Securities Act of
1933, as amended (the “1933 Act”).


 


WHEREAS, the parties desire that, upon the terms and
subject to the conditions contained herein, the Company shall issue and sell to
the Subscribers, as provided herein, and the Subscribers, in the aggregate,
shall purchase up to Seven Million Five Hundred Thousand Dollars ($7,500,000)
(the “Purchase Price”) of
principal amount of secured promissory notes of the Company (“Note” or “Notes”)
in the form attached hereto as Exhibit A;
and


 


WHEREAS, the aggregate proceeds of the sale of the Notes
contemplated hereby may be held in escrow pursuant to the terms of a Funds
Escrow Agreement to be executed by the parties substantially in the form
attached hereto as Exhibit B
(the “Escrow Agreement”).


 


NOW, THEREFORE, in consideration of the mutual covenants
and other agreements contained in this Agreement the Company and the
Subscribers hereby agree as follows:


 


1.                                       Conditions To
Closing.   Subject to the
satisfaction or waiver of the terms and conditions of this Agreement, on the Closing Date, each Subscriber shall
purchase and the Company shall sell to each Subscriber a Note in the principal
amount designated on the signature page hereto.  The aggregate principal amount of the Notes
to be purchased by the Subscribers on the Closing Date shall, in the aggregate,
be equal to the Purchase Price.  The
Closing Date shall be the date that subscriber funds representing the net
amount due to the Company from the Purchase Price is transmitted by wire
transfer or otherwise to or for the benefit of the Company.


 


At the Closing, the Company shall provide a “Pay
Off Letter” from GC Financial Services Inc. (“GC”)
in substantially the form attached as Exhibit B to the Funds Escrow
Agreement providing for the release of GC’s existing


 


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security interest in the assets of the Company and its Subsidiary (as
defined in Section 5(a) of this Agreement) upon payment to GC of the
amount set forth in the Pay Off Letter.


 


2.                                       Closing.  The consummation of the
transactions contemplated herein shall take place at the offices of Grushko &
Mittman, P.C., 551 Fifth Avenue, Suite 1601, New York, New York 10176,
upon the satisfaction of all conditions to Closing set forth in this Agreement
(“Closing Date”).


 


3.                                       Security Interest.   The
Subscribers will be granted a security interest in all the assets of the
Company, including ownership of Subsidiaries, and in the assets of the
Subsidiaries to be memorialized in a “Security
Agreement”, a form of which is annexed hereto as Exhibit C.   Each Subsidiary will execute and deliver to
the Subscribers a form of “Guaranty”
annexed hereto as Exhibit D.   The Company will execute such other
agreements, documents and financing statements reasonably requested by
Subscribers, which will be filed at the Company’s expense with the
jurisdictions, states and counties designated by the Subscribers.  The Company will also execute all such
documents reasonably necessary in the opinion of Subscriber to memorialize and
further protect the security interest described herein.  The Subscribers will appoint a Collateral
Agent to represent them collectively in connection with the security interest
to be granted to the Subscribers.  The
appointment will be pursuant to a “Collateral
Agent Agreement”, a form of which is annexed hereto as Exhibit E.


 


4.                                       Subscriber’s
Representations and Warranties.  Each
Subscriber hereby represents and warrants to and agrees with the Company only
as to such Subscriber that:


 


(a)                                  Information on
Company.   The Subscriber has been
furnished with or has had access at the EDGAR Website of the Commission to the
Company’s Form 10-KSB for the year ended December 31, 2004 as filed
with the Commission, together with all subsequently filed Forms 10-QSB, 8-K,
and filings made with the Commission available at the EDGAR website
(hereinafter referred to collectively as the “Reports”).  In addition, the Subscriber has received in
writing from the Company such other information concerning its operations,
financial condition and other matters as the Subscriber has requested in
writing (such other information is collectively, the “Other Written Information”), and considered
all factors the Subscriber deems material in deciding on the advisability of
investing in the Notes.


 


(b)                                 Information on
Subscriber.  The Subscriber is an “accredited investor”, as such term is
defined in Regulation D promulgated by the Commission under the 1933 Act, is
experienced in investments and business matters, has made investments of a
speculative nature and has purchased securities of United States publicly-owned
companies in private placements in the past and, with its representatives, has
such knowledge and experience in financial, tax and other business matters as
to enable the Subscriber to utilize the information made available by the
Company to evaluate the merits and risks of and to make an informed investment
decision with respect to the proposed purchase. 
Each Subscriber has the authority and is duly and legally qualified to
purchase and own the Notes.  The
Subscriber is able to bear the risk of such investment for an indefinite period
and to afford a complete loss thereof. 
The information set forth on the signature page hereto regarding
the Subscriber is accurate.


 


(c)                                  Purchase of Notes.  On the Closing Date, the Subscriber will
purchase the Notes as principal for its own account for investment only and not
with a view toward, or for resale in connection with, the public sale or any
distribution thereof.


 


(d)                                 Compliance with
Securities Act.  The Subscriber
understands and agrees that the Notes have not been registered under the 1933
Act or any applicable state securities laws, by reason of their issuance in a
transaction that does not require registration under the 1933 Act (based in
part on the accuracy of the representations and warranties of Subscriber
contained herein), and that such Notes must be held indefinitely unless a subsequent
disposition is registered under the 1933 Act or any applicable state securities
laws or is exempt from such registration.


 


(e)                                  Note
Legend.  The Note shall bear the
following legend:


 


“THIS
NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THIS NOTE MAY NOT BE SOLD, OFFERED FOR
SALE,


 


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PLEDGED
OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO
THIS NOTE UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
FORCE PROTECTION, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.”


 


(f)                                    Communication
of Offer.  The offer
to sell the Notes was directly communicated to the Subscriber by the
Company.  At no time was the Subscriber
presented with or solicited by any leaflet, newspaper or magazine article,
radio or television advertisement, or any other form of general advertising or
solicited or invited to attend a promotional meeting otherwise than in
connection and concurrently with such communicated offer.


 


(g)                                 No Governmental
Review.  Each Subscriber understands
that no United States federal or state agency or any other governmental or
state agency has passed on or made recommendations or endorsement of the Notes
or the suitability of the investment in the Notes nor have such authorities
passed upon or endorsed the merits of the offering of the Notes.


 


(h)                                 Correctness of
Representations.  Each Subscriber
represents as to such Subscriber that the foregoing representations and
warranties are true and correct as of the date hereof and, unless a Subscriber
otherwise notifies the Company prior to the Closing Date shall be true and
correct as of the Closing Date.


 


(i)                                     Survival.   The foregoing representations and warranties
shall survive the Closing Date for a period of two years.


 


5.                                       Company
Representations and Warranties. 
Except as set forth in the Reports, the Company represents and warrants
to and agrees with each Subscriber that:


 


(a)                                  Due
Incorporation.  The Company
and each of its subsidiaries is a corporation duly organized, validly existing
and in good standing under the laws of the respective jurisdictions of their
incorporation and have the requisite corporate power to own their properties
and to carry on their business as now being conducted.  The Company and each of its subsidiaries is
duly qualified as a foreign corporation to do business and is in good standing
in each jurisdiction where the nature of the business conducted or property
owned by it makes such qualification necessary, other than those jurisdictions
in which the failure to so qualify would not have a Material Adverse
Effect.  For purpose of this Agreement, a
“Material Adverse Effect” shall
mean a material adverse effect on the financial condition, results of
operations, properties or business of the Company taken as a whole.


 


(b)                                 Outstanding Stock.  All issued and outstanding shares of capital
stock of the Company and each of the Subsidiaries have been duly authorized and
validly issued and are fully paid and nonassessable.


 


(c)                                  Authority;
Enforceability.  This Agreement, the
Note, Funds Escrow Agreement and any other agreements delivered together with
this Agreement or in connection herewith (collectively “Transaction Documents”) have been duly
authorized, executed and delivered by the Company and are valid and binding
agreements enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors’ rights generally and
to general principles of equity.  The
Company has full corporate power and authority necessary to enter into and
deliver the Transaction Documents and to perform its obligations thereunder.


 


(d)                                 Additional
Issuances.   There are no outstanding
agreements or preemptive or similar rights affecting the Company’s common stock
or equity and no outstanding rights, warrants or options to acquire, or
instruments convertible into or exchangeable for, or agreements or
understandings with respect to the sale or issuance of any shares of common
stock or equity of the Company or other equity interest in any of the
subsidiaries of the Company except as described in the Reports.


 


(e)                                  Consents.  No consent, approval, authorization or order
of any court, governmental agency or body or arbitrator having jurisdiction
over the Company, or any of its Affiliates, the OTC Bulletin Board (the “Bulletin Board”) nor the Company’s
shareholders is required for the execution by the Company of the Transaction


 


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Documents and compliance and performance by the Company of its
obligations under the Transaction Documents, including, without limitation, the
issuance and sale of the Notes.  The
Transaction Documents and the Company’s performance of its obligations
thereunder has been approved unanimously by the Company’s directors.


 


(f)                                    No Violation or
Conflict.  Assuming the
representations and warranties of the Subscribers in Section 4 are true
and correct, neither the issuance and sale of the Notes nor the performance of
the Company’s obligations under this Agreement and all other agreements entered
into by the Company relating thereto by the Company will:


 


(i)                                     violate,
conflict with, result in a breach of, or constitute a default (or an event
which with the giving of notice or the lapse of time or both would be
reasonably likely to constitute a default) under (A) the articles or
certificate of incorporation, charter or bylaws of the Company, (B) to the
Company’s knowledge, any decree, judgment, order, law, treaty, rule, regulation
or determination applicable to the Company of any court, governmental agency or
body, or arbitrator having jurisdiction over the Company or any of its
subsidiaries or over the properties or assets of the Company or any of its
Affiliates, (C) the terms of any bond, debenture, note or any other
evidence of indebtedness, or any agreement, stock option or other similar plan,
indenture, lease, mortgage, deed of trust or other instrument to which the
Company or any of its Affiliates or subsidiaries is a party, by which the
Company or any of its Affiliates or subsidiaries is bound, or to which any of
the properties of the Company or any of its Affiliates or subsidiaries is
subject, or (D) the terms of any “lock-up” or similar provision of any
underwriting or similar agreement to which the Company, or any of its
Affiliates or subsidiaries is a party except the violation, conflict, breach,
or default of which would not have a Material Adverse Effect on the Company; or


 


(ii)                                  except in favor of
the Subscribers, result in the creation or imposition of any lien, charge or
encumbrance upon the Notes or any of the assets of the Company, its
subsidiaries or any of its Affiliates; or


 


(iii)                               result in the
activation of any anti-dilution rights or a reset or repricing of any debt or
security instrument of any other creditor or equity holder of the Company, nor
result in the acceleration of the due date of any obligation of the Company; or


 


(iv)                              result in the activation
of any piggy-back registration rights of any person or entity holding
securities of the Company or having the right to receive securities of the
Company.


 


(g)                                 The
Notes.  The Notes, upon issuance:


 


(i)                                     are, or will be,
free and clear of any security interests, liens, claims or other encumbrances,
subject to restrictions upon transfer under the 1933 Act and any applicable
state securities laws;


 


(ii)                                  have been, or will
be, duly and validly authorized;


 


(iii)                               will not have been
issued or sold in violation of any preemptive or other similar rights of the
holders of any securities of the Company; and


 


(iv)                              will not subject the
holders thereof to personal liability by reason of being such holders.


 


(h)                                 Litigation.  There is no pending or, to the best knowledge
of the Company, threatened action, suit, proceeding or investigation before any
court, governmental agency or body, or arbitrator having jurisdiction over the
Company, or any of its Affiliates that would affect the execution by the
Company or the performance by the Company of its obligations under the
Transaction Documents.  Except as
disclosed in the Reports, there is no pending or, to the best knowledge of the
Company, basis for or threatened action, suit, proceeding or investigation
before any court, governmental agency or body, or arbitrator having
jurisdiction over the Company, or any of its Affiliates which litigation if
adversely determined would have a Material Adverse Effect on the Company.


 


(i)                                     Reporting
Company.  The Company is a
publicly-held company subject to reporting obligations pursuant to Section 13
of the Securities Exchange Act of 1934, as amended (the “1934 Act”) and has a class of


 


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common shares registered pursuant to Section 12(g) of the
1934 Act.  Pursuant to the provisions of
the 1934 Act, the Company has timely filed all reports and other materials
required to be filed thereunder with the Commission during the preceding twelve
months.


 


(j)                                     Information
Concerning Company.  The Reports
contain all material information relating to the Company and its operations and
financial condition as of their respective dates which information is required
to be disclosed therein.   Since the date
of the financial statements included in the Reports, and except as modified in
the Other Written Information or in the Schedules hereto, there has been no
material adverse change in the Company’s business, financial condition or
affairs not disclosed in the Reports. 
The Reports do not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the circumstances when
made.


 


(k)                                  Defaults.   The Company is not in violation of its
articles of incorporation or bylaws.  The
Company is (i) not in default under or in violation of any other material
agreement or instrument to which it is a party or by which it or any of its
properties are bound or affected, which default or violation would have a
Material Adverse Effect on the Company, (ii) not in default with respect
to any order of any court, arbitrator or governmental body or subject to or
party to any order of any court or governmental authority arising out of any
action, suit or proceeding under any statute or other law respecting antitrust,
monopoly, restraint of trade, unfair competition or similar matters, or (iii) to
its knowledge not in violation of any statute, rule or regulation of any
governmental authority which violation would have a Material Adverse Effect on
the Company.


 


(l)                                     No General
Solicitation.  Neither the Company,
nor any of its Affiliates, nor to its knowledge, any person acting on its or
their behalf, has engaged in any form of general solicitation or general
advertising (within the meaning of Regulation D under the 1933 Act) in
connection with the offer or sale of the Notes.


 


(m)                               Listing.  The Company’s common stock is quoted on the
Bulletin Board.  The Company has not
received any oral or written notice that its common stock is not eligible nor
will become ineligible for quotation on the Bulletin Board nor that its common
stock does not meet all requirements for the continuation of such
quotation.  The Company satisfies all the
requirements for the continued quotation of its common stock on the Bulletin
Board.


 


(n)                                 No Undisclosed
Liabilities.  The Company has no
liabilities or obligations which are material, individually or in the
aggregate, which are not disclosed in the Reports and Other Written
Information, other than those incurred in the ordinary course of the Company’s
businesses since December 31, 2004 and which, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect.


 


(o)                                 No Undisclosed
Events or Circumstances.  Since December 31,
2004, no event or circumstance has occurred or exists with respect to the
Company or its businesses, properties, operations or financial condition, that,
under applicable law, rule or regulation, requires public disclosure or
announcement prior to the date hereof by the Company but which has not been so
publicly announced or disclosed in the Reports.


 


(p)                                 Capitalization.  The authorized and outstanding capital stock
of the Company as of the date of this Agreement and the Closing Date are set
forth on Schedule 5(p).  There are no options, warrants, or rights to
subscribe to, securities, rights or obligations convertible into or
exchangeable for or giving any right to subscribe for any shares of capital
stock of the Company except as disclosed in the Reports.  All of the outstanding shares of Common Stock
of the Company have been duly and validly authorized and issued and are fully
paid and nonassessable.


 


(q)                                 No Disagreements with Accountants and
Lawyers.  There are no disagreements of any kind
presently existing, or reasonably anticipated by the Company to arise, between
the Company and the accountants and lawyers formerly or presently employed by
the Company, including but not limited to disputes or conflicts over payment
owed to such accountants and lawyers.


 


(r)                                    Correctness of
Representations.  The Company
represents that the foregoing representations and warranties are true and
correct as of the date hereof in all material respects, and, unless the Company


 


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otherwise notifies the Subscribers prior to the Closing Date, shall be
true and correct in all material respects as of the Closing Date.


 


(s)                                  Survival.  The foregoing representations and warranties
shall survive the Closing Date for a period of two years.


 


6.                                       Regulation D
Offering.  The offer and issuance of
the Notes to the Subscribers is being made pursuant to the exemption from the
registration provisions of the 1933 Act afforded by Section 4(2) of
the 1933 Act and/or Rule 506 of Regulation D promulgated thereunder.  On the Closing Date, the Company will provide
an opinion reasonably acceptable to Subscriber from the Company’s legal counsel
opining on the availability of an exemption from registration under the 1933
Act as it relates to the offer and issuance of the Notes and other matters
reasonably requested by Subscribers.  A
form of the legal opinion is annexed hereto as Exhibit F.


 


7.1.                              Covenants of the
Company.  The Company covenants and
agrees with the Subscribers as follows:


 


(a)                                  Reporting
Requirements.  From the
date of this Agreement and until the sooner of (i) two (2) years
after the Closing Date, or (ii) until all the Note has been satisfied,
will (x) cause its Common Stock to continue to be registered under Section 12(b) or
12(g) of the 1934 Act, (y) comply in all respects with its reporting and
filing obligations under the 1934 Act, and (z) comply with all reporting
requirements that are applicable to an issuer with a class of shares registered
pursuant to Section 12(b) or 12(g) of the 1934 Act, as applicable.  The Company will use its best efforts not to
take any action or file any document (whether or not permitted by the 1933 Act
or the 1934 Act or the rules thereunder) to terminate or suspend its
reporting and filing obligations under said acts until two (2) years after
the Closing Date.  Until the Note has
been satisfied, the Company will use its best efforts to continue the listing
or quotation of the Common Stock on the OTC Bulletin Board (“Principal Market”) or other market with the reasonable consent
of Subscribers holding a majority of the outstanding Note principal, and will
comply in all respects with the Company’s reporting, filing and other
obligations under the bylaws or rules of the Principal Market.  The Company agrees to timely file a Form D
with respect to the Notes if required under Regulation D and to provide a copy
thereof to each Subscriber promptly after such filing.


 


(b)                                 Taxes.  From the date of this Agreement and until the
Note has been satisfied, the Company will promptly pay and discharge, or cause
to be paid and discharged, when due and payable, all lawful taxes, assessments
and governmental charges or levies imposed upon the income, profits, property
or business of the Company; provided, however, that any such tax, assessment, charge
or levy need not be paid if the validity thereof shall currently be contested
in good faith by appropriate proceedings and if the Company shall have set
aside on its books adequate reserves with respect thereto, and provided,
further, that the Company will pay all such taxes, assessments, charges or
levies forthwith upon the commencement of proceedings to foreclose any lien
which may have attached as security therefore.


 


(c)                                  Insurance.  From the date of this Agreement and until the
Note has been satisfied, the Company will keep its assets which are of an
insurable character insured by financially sound and reputable insurers against
loss or damage by fire, explosion and other risks customarily insured against
by companies in the Company’s line of business, in amounts sufficient to
prevent the Company from becoming a co-insurer and not in any event less than
one hundred percent (100%) of the insurable value of the property insured; and
the Company will maintain, with financially sound and reputable insurers,
insurance against other hazards and risks and liability to persons and property
to the extent and in the manner customary for companies in similar businesses
similarly situated and to the extent available on commercially reasonable
terms.


 


(d)                                 Books and
Records.  From the
date of this Agreement and until the Note has been satisfied, the Company will
keep true records and books of account in which full, true and correct entries
will be made of all dealings or transactions in relation to its business and
affairs in accordance with generally accepted accounting principles applied on
a consistent basis.


 


(e)                                  Governmental
Authorities.   From the
date of this Agreement and until the Note has been satisfied, the Company shall
duly observe and conform in all material respects to all valid requirements of
governmental authorities relating to the conduct of its business or to its
properties or assets.


 


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(f)                                    Intellectual
Property.  From the
date of this Agreement and until the Note has been satisfied, the Company shall
maintain in full force and effect its corporate existence, rights and
franchises and all licenses and other rights to use intellectual property owned
or possessed by it and reasonably deemed to be necessary to the conduct of its
business.


 


(g)                                 Properties.  From the date of this Agreement and until the
Note has been satisfied, the Company will keep its properties in good repair,
working order and condition, reasonable wear and tear excepted, and from time
to time make all necessary and proper repairs, renewals, replacements,
additions and improvements thereto; and the Company will at all times comply
with each provision of all leases to which it is a party or under which it
occupies property if the breach of such provision could reasonably be expected
to have a Material Adverse Effect.


 


(h)                                 Notice of Certain
Events.   The Company shall promptly
notify Subscribers if Company learns of the occurrence of (i) any event
which constitutes an Event of Default, together with a detailed statement by a
responsible officer of Company of the steps being taken to cure the effect of
such event; (ii) any legal, judicial or regulatory proceedings affecting
Company; (iii) any dispute between Company and any governmental regulatory
body or other entity that is likely to interfere with the normal business
operations of Company; or (iv) any adverse changes, either in any case or
in the aggregate, in the assets, liabilities, financial condition, business,
operations, affairs, or circumstances of Company from those reflected in the
Reports or by the facts warranted or represented in any Transaction
Document.  Company will notify Subscriber
in writing of any material change in its management or change its name or the
location of its chief executive office or principal place of business or the
place where it keeps its books and records.


 


7.2.                              Seniority.   Except as described in the Security
Agreement, until the Notes are fully satisfied, the Company shall not grant nor
allow any security interest to be taken in the assets of the Company or any
subsidiary of the Company; nor issue any debt, equity or other instrument which
would give the holder thereof directly or indirectly, a right in any assets of
the Company or any subsidiary of the Company, superior to any right of the
holder in or to such assets.


 


8.                                       Finder.    The Company on the one hand, and each
Subscriber (for himself only) on the other hand, agree to indemnify the other
against and hold the other harmless from any and all liabilities to any persons
claiming brokerage commissions or finder’s fees on account of services
purported to have been rendered on behalf of the indemnifying party in
connection with this Agreement or the transactions contemplated hereby and
arising out of such party’s actions.  The
Company represents that there are no parties entitled to receive fees,
commissions, or similar payments in connection with the Offering.


 


9.                                       Legal Fees.   On the Closing Date, the Company shall pay
to Grushko & Mittman, P.C., a fee of $15,000 (“Legal Fees”) as reimbursement for services
rendered to the Subscribers in connection with this Agreement and the purchase
and sale of the Notes (the “Offering”)
and acting as Escrow Agent.   The Legal
Fees will be payable out of funds held pursuant to the Escrow Agreement.


 


10.                                 Commitment Fee.   Each Subscriber will receive a credit
against its portion of the Purchase Price equal to 6.6666% of the Principal
Amount of the Note (“Commitment Fee”).  Each Subscriber will deliver its portion of the
Purchase Price to the Escrow Agent net of such Commitment Fee.


 


11.                                 Covenants of the Company Regarding
Indemnification.   The Company agrees to indemnify, hold
harmless, reimburse and defend the Subscribers, the Subscribers’ officers,
directors, agents, Affiliates, control persons, and principal shareholders,
against any claim, cost, expense, liability, obligation, loss or damage
(including reasonable legal fees) of any nature, incurred by or imposed upon
the Subscriber or any such person which results, arises out of or is based upon
(i) any material misrepresentation by Company or breach of any warranty by
Company in this Agreement or in any Exhibits or Schedules attached hereto, or
other agreement delivered pursuant hereto; or (ii) after any applicable
notice and/or cure periods, any breach or default in performance by the Company
of any covenant or undertaking to be performed by the Company hereunder, or any
other agreement entered into by the Company and Subscriber relating hereto.


 


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12.                                 Miscellaneous.


 


(a)                                  Notices.  All notices, demands, requests, consents,
approvals, and other communications required or permitted hereunder shall be in
writing and, unless otherwise specified herein, shall be (i) personally
served, (ii) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by reputable air
courier service with charges prepaid, or (iv) transmitted by hand
delivery, telegram, or facsimile, addressed as set forth below or to such other
address as such party shall have specified most recently by written
notice.  Any notice or other
communication required or permitted to be given hereunder shall be deemed
effective (a) upon hand delivery or delivery by facsimile, with accurate
confirmation generated by the transmitting facsimile machine, at the address or
number designated below (if delivered on a business day during normal business
hours where such notice is to be received), or the first business day following
such delivery (if delivered other than on a business day during normal business
hours where such notice is to be received) or (b) on the second business
day following the date of mailing by express courier service, fully prepaid,
addressed to such address, or upon actual receipt of such mailing, whichever
shall first occur.  The addresses for
such communications shall be: (i) if to the Company, to: Force Protection, Inc.,
9801 Highway 78, #3, Ladson, SC 29456, telecopier: (843) 553-3832, with a copy
by telecopier only to: Amy Trombly, Esq., Trombly Business Law, 1320
Centre Street, Suite 202, Newton Center, MA 02459, Fax: (617) 243-0066, and (ii) if
to the Subscribers, to: the one or more addresses and telecopier numbers
indicated on the signature pages hereto, with an additional copy by
telecopier only to: Grushko & Mittman, P.C., 551 Fifth Avenue, Suite 1601,
New York, New York 10176, telecopier number: (212) 697-3575.


 


(b)                                 Entire
Agreement; Assignment.  This
Agreement and other documents delivered in connection herewith represent the
entire agreement between the parties hereto with respect to the subject matter
hereof and may be amended only by a writing executed by both parties.  Neither the Company nor the Subscribers have
relied on any representations not contained or referred to in this Agreement
and the documents delivered herewith.  
No right or obligation of the Company shall be assigned without prior
notice to and the written consent of the Subscribers.


 


(c)                                  Counterparts/Execution.  This Agreement may be executed in any number
of counterparts and by the different signatories hereto on separate
counterparts, each of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute but one and the same instrument.  This Agreement may be executed by facsimile
signature and delivered by facsimile transmission.


 


(d)                                 Law Governing
this Agreement.  This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York without regard to principles of conflicts of laws.  Any action brought by either party against
the other concerning the transactions contemplated by this Agreement shall be
brought only in the state courts of New York or in the federal courts located
in the state of New York.  The parties and the individuals executing this
Agreement and other agreements referred to herein or delivered in connection
herewith on behalf of the Company agree to submit to the jurisdiction of such
courts and waive trial by jury. 
The prevailing party shall be entitled to recover from the other party
its reasonable attorney’s fees and costs. 
In the event that any provision of this Agreement or any other agreement
delivered in connection herewith is invalid or unenforceable under any
applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law.  Any such provision which may prove invalid or
unenforceable under any law shall not affect the validity or enforceability of
any other provision of any agreement.


 


(e)                                  Specific
Enforcement, Consent to Jurisdiction.  The Company and Subscriber acknowledge and
agree that irreparable damage would occur in the event that any of the provisions
of this Agreement were not performed in accordance with their specific terms or
were otherwise breached.  It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent or cure breaches of the provisions of this Agreement and
to enforce specifically the terms and provisions hereof, this being in addition
to any other remedy to which any of them may be entitled by law or equity.  Subject to Section 12(d) hereof,
each of the Company, Subscriber and any signator hereto in his personal
capacity hereby waives, and agrees not to assert in any such suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction in
New York of such court, that the suit, action or proceeding is brought in an
inconvenient forum or that the venue of the suit, action or proceeding is
improper.  Nothing in this Section shall
affect or limit any right to serve process in any other manner permitted by
law.


 


8





















 


(f)                                    Independent Nature of Subscribers.   The Company acknowledges
that the obligations of each Subscriber under the Transaction Documents are
several and not joint with the obligations of any other Subscriber, and no
Subscriber shall be responsible in any way for the performance of the
obligations of any other Subscriber under the Transaction Documents.  The
Company acknowledges that the decision of each Subscriber to purchase Notes has
been made by such Subscriber independently of any other Subscriber and independently
of any information, materials, statements or opinions as to the business,
affairs, operations, assets, properties, liabilities, results of operations,
condition (financial or otherwise) or prospects of the Company which may have
been made or given by any other Subscriber or by any agent or employee of any
other Subscriber, and no Subscriber or any of its agents or employees shall
have any liability to any Subscriber (or any other person) relating to or
arising from any such information, materials, statements or opinions.  The
Company acknowledges that nothing contained in any Transaction Document, and no
action taken by any Subscriber pursuant hereto or thereto shall be deemed to
constitute the Subscribers as a partnership, an association, a joint venture or
any other kind of entity, or create a presumption that the Subscribers are in
any way acting in concert or as a group with respect to such obligations or the
transactions contemplated by the Transaction Documents.  The Company
acknowledges that each Subscriber shall be entitled to independently protect
and enforce its rights, including without limitation, the rights arising out
of the Transaction Documents, and it shall not be necessary for any
other Subscriber to be joined as an additional party in any proceeding for such
purpose.  The Company acknowledges that it has elected to provide all
Subscribers with the same terms and Transaction Documents for the convenience
of the Company and not because Company was required or requested to do so by
the Subscribers.  The Company acknowledges that such procedure with
respect to the Transaction Documents in no way creates a presumption that the
Subscribers are in any way acting in concert or as a group with respect to the
Transaction Documents or the transactions contemplated thereby.


 


SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT (A)


 


Please acknowledge your acceptance of the
foregoing Subscription Agreement by signing and returning a copy to the
undersigned whereupon it shall become a binding agreement between us.


 


	
   

  	
  FORCE PROTECTION, INC.

  
	
   

  	
  a Nevada corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gordon
  McGilton

  	
   

  
	
   

  	
   

  	
  Name: Gordon
  McGilton

  
	
   

  	
   

  	
  Title: Chief
  Executive Offier

  
	
   

  	
   

  
	
   

  	
  Dated: as of November 18, 2005

  



 


	
  SUBSCRIBER

  	
   

  	
  NOTE PRINCIPAL

  	
   

  
	
  LONGVIEW EQUITY FUND, LP

  600 Montgomery Street, 44th Floor

  San Francisco, CA 94111

  Fax: (415) 981-5301 

  	
   

  	
  $

  	
  1,000,000.00

  	
   

  
					



 


 


	
  /s/ Wayne H. Coleson 

  	
   

  	
   

  	
   

  
	
  (Signature)

  By: Wayne H. Coleson, Investment Advisor

  	
   

  	
   

  



 


9





















 


	
  SUBSCRIBER

  	
   

  	
  NOTE PRINCIPAL

  	
   

  
	
  LONGVIEW FUND, LP

  600 Montgomery Street, 44th Floor

  San Francisco, CA 94111

  Fax: (415) 981-5301



  	
   

  	
  $

  	
  6,500,000.00

  	
   

  
					



 


 


	
  /s/ S. Michael Rudolph

  	
   

  	
   

  	
   

  
	
  (Signature)

  By: S. Michael Rudolph, Investment Advisor

  	
   

  	
   

  



 


10





















 


SCHEDULE 5(P)


 


CAPITALIZATION


 


 


	
  As at
  11/15/05 (all numbers rounded)

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Commmon
  stock outstanding

  	
   

  	
  36,000,000

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Other
  Warrants

  	
   

  	
  600,000

  	
   

  	
   

  	
   

  
	
  Series D
  Warrants

  	
   

  	
  3,000,000

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Employee
  Stock Options*

  	
   

  	
  1,000,000

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  =

  	
  40,600,000

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Preferred Series A

  	
  0

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Preferred Series B

  	
  0

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Preferred Series C

  	
  0

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Preferred Series D**

  	
  13004

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Series D
  converts

  (@$2.10/share) 

  	
  =

  	
  6,192,380

  	
   

  	
  Common
  Shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  46,792,380

  	
   

  	
  Fully Diluted

  	
   

  



 


Employee
Stock Options vesting over various time intervals (figure shown assumes full
vesting and exercise)


Series D
Certificate of Designation grants various shareholder rights, including rights
relating to redemption, seniority and participation


 


11