Exhibit 10.8
Execution Copy
OFFICE
LEASE
THIS OFFICE LEASE (“ Lease
”) is entered into as of the 1st day of June, 2005, by and
between AEROSPACE/DEFENSE, INC., a South Carolina corporation
(“ Landlord ”), and FORCE PROTECTION INDUSTRIES,
INC. (FORMERLY TECHNICAL SOLUTIONS GROUP, INC.), a Nevada
corporation and FORCE PROTECTION, INC., a Nevada corporation
(collectively, the “ Tenant ”).
Upon the terms and subject to the conditions
hereinafter set forth, the Landlord leases to the Tenant and the
Tenant leases from Landlord, the premises hereinafter
described:
1.
THE PREMISES.
A.
The premises hereby leased to the Tenant is a portion of the office
area located in a building (“ Building No. 1 or
the “ Building ”) which is part of an industrial
development located in Ladson, Charleston County, South Carolina
(“ Project ”). The term “ Premises
” means and is comprised of (i) the office area of
approximately 7,190 square feet outlined and marked “
Office Area ” on Exhibit A attached hereto
and made a part hereof, and (ii) the warehouse area of
approximately 9,139 square feet outlined and marked “
Warehouse Area ” on Exhibit A , and
(iii) subject to Subsection 5C hereof, the “
Common Areas ” (hereinafter defined).
B.
Tenant represents that Tenant has examined the physical condition
of the Premises and has found them satisfactory for all purposes
hereof and Tenant accepts the Premises in their present condition,
“AS IS,” subject to Landlord’s obligations under
Section 9A .
2.
TERM.
A.
Subject to the relocation rights of the Landlord under
Section 2A , the term of this Lease shall commence as
of June 1, 2005 and expire on July 14, 2008 (“
Initial Term ”). The Initial Term and any extension
under the Option Period (described in Subsection 2C
below) thereof are hereinafter referred to collectively as the
“ Term .”
B.
For purposes of this Lease the term “ Lease Year
” shall refer to a period of twelve (12) consecutive months.
The first Lease Year shall commence as of June 1, 2005
(“ Commencement Date ”) and end May 31,
2006. Each subsequent Lease Year shall commence on the anniversary
of the Commencement Date.
C.
Tenant shall have one (1) option to renew and extend the
Initial Term for a five (5) year period (“ Option
Period ”). Tenant may exercise the option by notice in
writing to Landlord served at least six (6) months and not
more than twelve (12) months prior to the end of the last year of
the Initial Term hereunder. Conditions to exercising the option to
renew this Lease shall be that (i) Tenant shall not be in
default in the performance of any terms, covenants, or conditions
of this Lease, and (ii) Tenant shall have exercised its option
to renew and extend the term of that certain Industrial Lease
between the parties hereto dated as of July 13, 2004, covering
premises known as Building No. 2 of the Project (the
“Building No. 2 Lease”) pursuant
to
Subsection 2C therein. All terms and conditions of this
Lease shall be applicable to the Option Period referred to in this
Subsection 2C .
2A.
RELOCATION OF THE
PREMISES.
A.
Effective at any time following the first Lease Year of the Initial
Term, Landlord may elect, by giving written notice of such election
to Tenant, to require Tenant to surrender possession of all of the
Premises for the remainder of the Term (the “ Relocation
Notice ”). The Relocation Notice shall designate the date
by which possession of the Premises shall be surrendered by Tenant
(the “ Surrender Date ”), which date shall not
be earlier than ninety (90) days after the date on which the
Relocation Notice is given.
B.
If Tenant shall be required to surrender possession of the Premises
pursuant to a Relocation Notice, the Landlord shall provide to the
Tenant comparable space including comparable parking, utilities and
leasehold improvements as or similar to attachments and other
specifications (reasonably comparable in size, type and quality of
construction to the Premises as improved by the Tenant pursuant to
Section 8A and B at another location within the Project
that has unobstructed frontage (except for landscape) on U.S.
Highway 78, which is generally northeast of the Building, and is
located no further from U.S. 78 than the Premises (the “
Relocation Premises ”). Within sixty (60) days after
the Relocation Notice shall be given, Landlord and Tenant shall
execute and deliver an amendment to this Lease (the “
Relocation Amendment ”) which shall substitute a
description of the Relocation Premises for the description of the
Premises contained herein and shall modify Exhibit A
(delineating the Relocation Premises) accordingly; otherwise, all
other terms and conditions of this Lease shall be applicable to
Tenant’s occupancy of the Relocation Premises.
C.
In the event the Tenant relocates to the Relocation Premises as
provided above, the Landlord shall reimburse the Tenant reasonable
moving expenses for Tenant to move its office furniture, equipment
and other personal property from the Premises to the Relocation
Premises within ten (10) days after receiving an invoice for
the amount thereof, together with details and documentation
(including copies of original invoices and receipts) relating to
such moving costs.
D.
Notwithstanding anything contained in this Section 2A (
Relocation of the Premises ) to the contrary,
(i) if the Surrender Date in the Relocation Notice occurs
during the last twelve (12) months of the Initial Term, the
Landlord shall not be required to provide a Relocation Premises
unless the Tenant provides to Landlord within fifteen (15) days of
the receipt of the Relocation Notice, a notice (“ Option
Notice ”) of Tenant’s desire to exercise its
options to renew and extend the Term of this Lease and Building
No. 2 Lease for the Option Period (as defined herein and in
the Building No. 2 Lease); if the Tenant fails to provide to
the Landlord an Option Notice within the said fifteen (15) day
period, the Term of this Lease shall terminate on the Surrender
Date; and (ii) if the Surrender Date occurs during the last
twenty-four (24) months of the Option Period, the Landlord shall
not be required to provide a Relocation Premises, in which event,
the Term of this Lease shall terminate on the Surrender Date unless
the Tenant and Landlord otherwise mutually agree pursuant to an
amendment to this Lease duly executed by the parties hereto
pursuant to Subsection 27K .
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E.
If this Lease shall terminate on the Surrender Date pursuant to
Subsection 2D , the rights and obligations of the
parties hereunder shall cease as of the Surrender Date (except that
both parties shall remain liable for any accrued obligations
arising under this Lease prior to the Surrender Date) and the
monthly Base Rent for the final month in which the Surrender Date
occurs shall be pro-rated as of the Surrender Date. No further
documentation shall be required to effect the termination of this
Lease, but each party agrees that, upon the request of the other
party to do so, it shall execute, acknowledge and deliver an
appropriate instrument evidencing such termination prepared by or
at the expense of the party requesting the same.
3.
BASE RENT.
A.
No Base Rent (hereinafter defined) shall be due for the first sixty
(60) days of the Initial Term to allow the Tenant to complete the
tenant leasehold improvements described under
Section 8A . Beginning on the sixty-first (61
st ) day after the Commencement Date (the “
Rent Commencement Date ”), and for the remainder of
the first Lease Year, Tenant agrees to pay to the Landlord, without
previous demand therefore and, without any set-off or deduction
whatsoever, the following monthly net rent (“ Base
Rent ”)(1): $9,989.98 per month. All monthly Base Rent
shall be due and payable on the first business day of each calendar
month during the Term. If the Rent Commencement Date does not occur
on the first day of the month, then (i) the monthly Base Rent
for the calendar month during which the Rent Commencement Date
occurs shall be pro-rated to cover the period between the Rent
Commencement Date and the last day of that month, and the Base Rent
for that month shall be due and payable on the Rent Commencement
Date; and (ii) the Base Rent for the last calendar month for
each Lease Year shall be pro-rated between the then existing Base
Rent for the then concluding Lease Year and the adjusted Base Rent
for the new Lease Year as calculated pursuant to
Subsection B below.
B.
Commencing with the first day of the second Lease Year, to-wit:
June 1, 2006 (“ First Adjustment Date ”)
and on the first day of each Lease Year thereafter (“
Subsequent Adjustment Date ”) during the Initial Term
and Option Period, the amount of the monthly Base Rent due under
this Lease shall be increased by an amount equal to the product of
the then current monthly Base Rent multiplied by a three percent
(3%). Therefore, the monthly Base Rent for the second Lease Year
shall be $10,289.68; for the third Lease Year, $10,598.37; and
increased so forth throughout the entire Term of this Lease.
C.
All monthly Base Rent payments and any other payments due Landlord
under this Lease shall be made without any setoff or deduction
whatsoever and shall be payable and delivered to:
Aerospace/Defense, Inc.
4383 Jenkins
Avenue
North Charleston, SC
29405
(1) Base Rent for
the first Lease Year shall be based on an annualized rate of
$119,879.75, being the sum of (a) $71,900.00 calculated at
$10.00 per square foot per year for 7,190 square feet of
“Office Area” and (b) $47,979.75 calculated at $5.25
per square foot per year for 9,139 square feet of “Warehouse
Area.”
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or to such other place
as may be designated by notice in writing from Landlord to Tenant.
Base Rent and other payments due Landlord by the Tenant under this
Lease received more than ten (10) days after the due date of
such payment shall be subjected to a late penalty of one point five
percent (1.5%) of the amount of such payment for each month, or
portion thereof, such payment is late. No payment by Tenant or
receipt by Landlord of any lesser sum than the monthly Base Rent
stipulated in this Lease shall be deemed to waive the right of
Landlord to receive in a timely manner the full amount due and
payable to the Landlord.
4.
UTILITIES.
A.
Provided Tenant only consumes water and electricity for personal
and office use and not for any manufacturing process or non-office
use, Tenant’s pro rata portion of the Project’s water
and electricity bill is included in the Base Rent. (No gas is
provided to the Premises.) Subject to Section 23 (
Force Majeure ), the Landlord shall not interrupt, or cause
to be interrupted, any such utility service (water and electricity)
for a period longer than 36 hours. No such interruption of utility
service shall relieve Tenant from any of its obligations under this
Lease.
B.
Tenant’s pro rata share of the county solid waste recycling
fee paid by the Project for solid waste hauled from the Project
shall be an amount equal to the product of (1) the total 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 any trash dumpster utilized by the Tenant at the Premises
during the period in question and as its denominator the volume of
all trash dumpsters at all buildings in the Project picked up
during the same time period. For purposes of this subparagraph, the
volume of a trash dumpster picked up during a billing period will
be determined by multiplying the capacity of the trash dumpster in
cubic yards by the number of times such trash dumpster is picked up
during the billing period, whether or not such trash dumpster was
filled to capacity at the time it was picked up. It is acknowledged
by the parties that the Tenant shall provide the Tenant’s own
trash dumpsters and shall pay for the hauling of trash
therefrom.
C.
Tenant shall provide and contract for Tenant’s own
telephone/telephonic, internal telecommunications, cabling and
computer network (LAN, WAN, etc.) needs in and associated with the
Premises - - with its own separate telephone numbers, wiring and
cables, and in connection therewith shall be free to make such
modifications to the Premises as may be reasonable and necessary
for such purpose.
5.
TAXES AND COMMON AREAS.
A.
Landlord shall pay, prior to delinquency, all real property taxes
and assessments which are levied, imposed, or assessed upon or
against the Building. Tenant shall not be responsible for any
portion of such real property taxes and assessments.
B.
Tenant shall pay prior to delinquency all taxes assessed against
and levied upon trade fixtures, furnishings, equipment, inventory
and all other personal property of Tenant contained in the
Premises. When possible, Tenant shall cause such trade fixtures,
furnishings, equipment and other personal property to be assessed
and billed separately from the real property
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of Landlord. If any of
Tenant’s personal property shall be assessed with
Landlord’s real property, Tenant shall pay Landlord the taxes
attributable to Tenant within thirty (30) days after receipt of a
written statement setting forth the taxes applicable to
Tenant’s property, together with a copy of the taxing
authority’s billing to Landlord.
C.
The term “Common Areas” as used in this Lease means
those parts of and adjacent to Building No. 1 marked “
Common Areas ” on Exhibit A-1 [the roadway
leading from U.S. Highway 78 to the parking area, and the parking
area in front of Building No. 1]. Landlord hereby grants to
Tenant and Tenant’s customers, invitees and employees for the
entire Term, the right to use, in common with Landlord,
Landlord’s invitees and employees and with the other lessees
and occupants of Project and their respective customers, invitees
and employees, the Common Areas for their intended purposes,
subject to reasonable, rules and regulations (“
Rules and Regulations ”) to be promulgated by
Landlord for the convenience and safety of all of the lessees,
occupants and users of the Project. Landlord will have the right to
make reasonable modifications and additions to the Rules and
Regulations from time to time. In addition, the Landlord reserves
the right to assign, limit or designate exact parking spaces for
the Tenant and other lessees and occupants of Building No. 1
and their respective employees and invitees and to close all or any
portion of the parking area or other Common Areas to such extent as
may, in the opinion of the Landlord, be necessary to maintain,
repair or renovate same. Except for senior management of the
Tenant (approximately 12 employees) and occasional visitors and
customers of the Tenant, the Tenant shall cause its other employees
and guests to park in the common area parking lots designated in
the Building No. 2 Lease during such temporary maintenance,
repair and renovation of parking. In the event of
additional tenants coming into Building 1, requiring parking
that creates needs beyond the current 124 spaces available, FPI
will receive reasonable space allocation and right upon receiving
Landlord’s prior written approval, to extend the current
parking spaces.
(i)
During the Term, Landlord will maintain the Common Areas in good
order and condition. Tenant shall not be responsible for paying any
so-called common area maintenance charges; however, notwithstanding
the foregoing, if the necessity for repairs to any Common Areas
(such as, for example, the common area restrooms) shall have arisen
from or shall have been caused by the negligence or willful acts of
the Tenant, its agents, concessionaires, officers, employees,
licensees, invitees or contractors, Landlord may make or cause the
same to be made, but shall not be obligated to do so, and Tenant
agrees to pay to Landlord promptly upon Landlord’s demand,
the cost of such repairs, if made. In the event Landlord elects not
to make such repairs, Landlord may require Tenant to make such
repairs at Tenant’s sole cost and expense.
(ii)
Landlord shall have the right, at Landlord’s sole cost and
expense, to relocate, change, move or alter the Common Areas, so
long as restroom facilities are available to the Tenant and 24-hour
pedestrian ingress to and egress from the Premises is not
materially disturbed.
6.
SIGNAGE.
Tenant shall have the option to install, at
Tenant’s cost, a sign at a location near the entrance to the
Premises, subject to the prior written consent of Landlord, which
consent shall
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not be unreasonably
withheld or delayed. Any sign constructed by Tenant must be of a
size and at a location which will not detract from the image and
unity of the Project and Building.
7.
USE.
A.
Tenant shall use the Premises for offices associated with
Tenant’s business located in Building No. 2 and Building
No. 3 within the Project currently under lease from Landlord.
Outside storage, including without limitation, trucks and other
vehicles, is prohibited. Tenant shall at its own cost and expense
obtain any and all licenses and permits necessary for any such use.
Tenant shall not permit any objectionable or unpleasant odors,
smoke, dust, noise or vibrations to emanate from the Premises, nor
take any other action that would constitute a nuisance or would
disturb or endanger the Landlord or any other tenants or occupants
of Building No. 1 or unreasonably interfere with their use of
Building No. 1. Without Landlord’s prior written
consent, Tenant shall not receive, store or otherwise handle any
product, material or merchandise which is explosive or highly
flammable.
B.
Tenant shall not commit or suffer to be committed any waste upon or
about the Premises, the Common Areas, and the Building.
8.
COMPLIANCE WITH LAWS AND
GOVERNMENTAL REGULATIONS.
A.
Tenant shall at all times during the Term be in full compliance
with any and all federal, state and local governmental
rules and regulations, ordinances and similar provisions
having the force and effect of law (collectively, “
Laws ”) which are or would be applicable to the use of
the Premises and the business being conducted within the
Premises.
B.
Landlord shall be responsible for any alteration or improvements or
repairs to the Common Areas ordered by any governmental authority
or required under applicable Laws, provided, however, Tenant shall
be obligated to make any alterations, repairs or improvements to
the Common Areas that are necessary because they relate primarily
to the occupancy or use of Tenant or Tenant’s business in the
Premises.
8A.
TENANT’S LEASEHOLD
IMPROVEMENTS.
A.
Tenant’s Leasehold Improvements to the Warehouse Area
. Within 60 days after the execution of this Lease and
subject to the provisions of Section 10 (
Alterations by Tenant ), Tenant will, at Tenant’s sole
cost and expense, without contribution by the Landlord, perform or
caused to be performed the work described in Exhibit B
of this Lease (“ Tenant’s Improvements to the
Warehouse Area ”). The plans and specifications for
Tenant’s Improvements to the Warehouse Area attached hereto
as Exhibit B-1 are hereby approved by the Landlord, and
shall not be substantially changed by the Tenant without the prior
written consent of the Landlord. During construction of
Tenant’s Improvements to the Warehouse Area, Tenant and its
contractors and agents shall take reasonable precaution not to
damage the existing structure of the Building and other areas
within and adjacent to the Building.
B.
Tenant’s Leasehold Improvements to the Office Area .
Within 60 days of the execution of this Lease and subject to
the provisions of Section 10 ( Alterations by
Tenant ), Tenant will, at Tenant’s sole cost and expense,
without, contribution by the Landlord, perform or
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cause to be performed
the work described in Exhibit C (GENERAL
SPECIFICATION DOCUMENT C-1 ATTACHED) of this Lease (“
Tenant’s Improvements to the Office Area ” which
for purposes of this Subsection B , only, may also be
referred to as “ Improvements ”). The plans and
specifications for the Improvements are attached hereto as
Exhibit C-1 and are hereby approved by the Landlord and
shall not be substantially changed by the Tenant without the prior
written consent of the Landlord. During construction of the
Improvements, Tenant and its contractors and agents shall take
precaution not to damage the existing structure of the Building and
other areas within and adjacent to the Building.
C.
Right to Inspect . During the construction of
Tenant’s improvements under this Section 8A , and
at the completion of such improvements, Landlord’s
representatives shall have the right (but the Landlord shall have
no duty or obligation whatsoever) to inspect the work related to
the construction and completion of such improvements upon
reasonable prior notice to the Tenant; provided ,
however , notwithstanding the foregoing, any such
inspections shall not (a) be relied upon by the Tenant or
Tenant’s contractor for any reason whatsoever, and
(b) be deemed to relieve the Tenant of its representations and
obligations to complete such improvements in accordance with the
terms and provisions of this Section 8A . During the
period that the Tenant is constructing the improvements in or upon
the Premises, it will cause its contractor and other invitees to
work so as not to unreasonably or unnecessarily interfere with the
operations of the other lessees and occupants of the Building.
9.
MAINTENANCE AND REPAIR.
A.
Landlord shall at its expense maintain only the roof, foundation
and structural soundness of the exterior walls of Building
No. 1 in good repair. Tenant shall repair and pay for any
damages caused by the negligence of the Tenant, or Tenant’s
employees, agents or invitees, or caused by Tenant’s fault
hereunder. The term “walls” as used herein shall not
include windows, glass or plate glass, doors, or entries to the
Premises. Tenant shall immediately give Landlord written notice of
any defect or need for repairs, after which Landlord shall have
reasonable opportunity and access to the Premises to repair same or
cure such defect. Landlord’s liability with respect to any
defects, repairs or maintenance for which Landlord is responsible
under any of the provisions of this Lease shall be limited to the
cost of such repairs or maintenance or the curing of such defect.
Landlord shall promptly, at Landlord’s cost and expense, make
all necessary replacements, restorations, renewals and repairs to
the Premises Landlord is required to maintain as hereinabove
provided in this Subsection 9A . Repairs, restorations,
renewals and replacements shall, to the extent possible, be at
least equivalent in quality of the original work or the property
replaced, as the case may be. Any injury sustained by any person
because of the Landlord’s failure to perform its obligations
as hereinabove provided in this Subsection 9A shall be
the responsibility of Landlord and Landlord shall indemnify and
hold Tenant harmless from and against all claims and actions for
injuries in connection therewith, including, but not limited to
attorney’s and other professional fees, and any other cost
which Tenant might reasonably incur.
B.
Tenant acknowledges that it is leasing the Premises in their
“AS-IS” condition. Except as provided in
Section 9A , Section 13 , and
Section 14 hereof, Tenant shall promptly throughout the
Term at Tenant’s cost and expense, take good care of and
maintain the Premises (including, but not limited to, all Tenant
Improvements to the Warehouse Area and all
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Tenant Improvements to
the Office Area, windows, glass and plate glass, doors, office
entries, interior walls and finish work, floors and floor
coverings, heating and air-conditioning systems) in good order,
repair and condition and in neat, clean and safe condition, fair
wear and tear excepted. In meeting its obligations pursuant to this
Section 9B , Tenant may repair (rather than replace)
any component of the Premises which Tenant is required to maintain
unless such component cannot be repaired, in which event
replacement shall be required. Tenant shall promptly, at
Tenant’s cost and expense, make all necessary replacements,
restorations, renewals and repairs to portions of the Premises
Tenant is required to maintain. Repairs, restorations, renewals and
replacements shall, to the extent possible, be at least equivalent
in quality of the original work or the property replaced, as the
case may be, and shall become the property of the Landlord. Tenant
will not overload the electrical wiring serving the Premises, and
will install at its expense, subject to the provisions of
Section 10 , any additional electrical wiring which may
be required in connection with Tenant’s apparatus. Any damage
or injury sustained by any person because of mechanical,
electrical, plumbing or any other equipment or installations, whose
maintenance and repair shall be t
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