EXHIBIT 10.32
FIRST AMENDMENT
THIS FIRST AMENDMENT (the "Amendment") is made and entered into as of the
25th day of August, 2003, by and between STERLING PLAZA LIMITED PARTNERSHIP, a
DELAWARE LIMITED PARTNERSHIP, doing business in Texas as DALLAS STERLING PLAZA
LIMITED PARTNERSHIP ("Landlord"), and DIGITAL RECORDERS, INC. A NORTH CAROLINA
CORPORATION ("Tenant").
RECITALS
A. Landlord and Tenant are parties to that certain lease dated March 15,
2000, which lease has been previously amended by instrument dated November
2, 2000 (collectively, the "Lease"). Pursuant to the Lease, Landlord has
leased to Tenant space currently containing approximately 2,206 rentable
square feet (the "Premises") described as Suite No. 1050 on the 10th floor
of the building located at 0000 Xxxxxx Xxxx, Xxxxxx, Xxxxx 00000, and
commonly known as Sterling Plaza (the "Building").
B. The Lease by its terms shall expire on April 30, 2004 ("Prior Termination
Date"), and the parties desire to extend the Term of the Lease, all on the
following terms and conditions.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant agree as
follows:
I. EXTENSION. The Term of the Lease is hereby extended for a period of 48
months and shall expire on April 30, 2008 ("Extended Termination Date"),
unless sooner terminated in accordance with the terms of the Lease. That
portion of the Term commencing the day immediately following the Prior
Termination Date ("Extension Date") and ending on the Extended Termination
Date shall be referred to herein as the "Extended Term".
II. BASE RENT. As of September 1, 2003, the schedule of Base Rent payable with
respect to the Premises during the remainder of the Term and the Extended
Term is the following:
ANNUAL RATE ANNUAL MONTHLY
PERIOD PER SQUARE FOOT BASE RENT BASE RENT
------------ --------------- ----------- ----------
September 1,
2003 - April
30, 2008 $ 22.00 $ 48,531.96 $ 4,044.33
All such Base Rent shall be payable by Tenant in accordance with the terms
of the Lease.
III. ADDITIONAL SECURITY DEPOSIT. No additional security deposit shall be
required in connection with this Amendment.
IV. EXPENSES AND TAXES. For the period commencing on the Extension Date and
ending on the Extended Termination Date, Tenant shall pay for Tenant's Pro
Rata Share of Expenses and Taxes in accordance with the terms of the
Lease, provided, however, during such period, the Base Year for the
computation of Tenant's Pro Rata Share of Expenses and Taxes is amended
from 2000 to 2003.
V. IMPROVEMENTS TO PREMISES.
A. CONDITION OF PREMISES. Tenant is in possession of the Premises and
accepts the same "as is" without any agreements, representations,
understandings or obligations on the part of Landlord to perform any
alterations, repairs or improvements, except as may be expressly
provided otherwise in this Amendment.
B. RESPONSIBILITY FOR IMPROVEMENTS TO PREMISES. Any construction,
alterations or improvements to the Premises shall be performed by
Tenant at its sole cost and expense using contractors selected by
Tenant and approved by Landlord and shall be governed in all
respects by the provisions of Article IX of the Lease.
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VI. OTHER PERTINENT PROVISIONS. Landlord and Tenant agree that, effective as
of the date of this Amendment (unless different effective date(s) is/are
specifically referenced in this Section), the Lease shall be amended in
the following additional respects:
A. PARKING. As of September 1, 2003, Article I, "Parking" of Exhibit E,
"Additional Provisions" to the Lease is hereby amended and modified
by deleting the phrase "the sum of $50.00 per month per Permit" from
the first sentence of paragraph B and inserting the following in
lieu thereof: "the sum of $00.00 per month per Permit".
B. RIGHT OF FIRST REFUSAL.
1. Grant of Option; Conditions. Tenant shall have the one time
right of first refusal (the "Right of First Refusal") with
respect to the approximately 1,972 rentable square feet of
space known as Suite No. 1030 on the 10th floor of the
Building shown on the demising plan attached hereto as Exhibit
A (the "Refusal Space"). Tenant's Right of First Refusal shall
be exercised as follows: when Landlord has a prospective
tenant, other than the existing tenant in the Refusal Space,
(the "Prospect") interested in leasing the Refusal Space,
Landlord shall advise Tenant (the "Advice") of the terms under
which Landlord is prepared to lease the Refusal Space to such
Prospect and Tenant may lease the Refusal Space, under such
terms, by providing Landlord with written notice of exercise
(the "Notice of Exercise") within 5 days after the date of the
Advice, except that Tenant shall have no such Right of First
Refusal and Landlord need not provide Tenant with an Advice
if:
a. Tenant is in default under the Lease beyond any
applicable cure periods at the time that Landlord would
otherwise deliver the Advice; or
b. the Premises, or any portion thereof, is sublet (other
than pursuant to a Permitted Transfer, as defined in
Article XII of the Lease) at the time Landlord would
otherwise deliver the Advice; or
c. the Lease has been assigned (other than pursuant to a
Permitted Transfer, as defined in Article XII of the
Lease) prior to the date Landlord would otherwise
deliver the Advice; or
d. the Refusal Space is not intended for the exclusive use
of Tenant during the Term; or
e. the Tenant is not occupying the Premises on the date
Landlord would otherwise deliver the Advice.
2. Terms for Refusal Space.
a. The term for the Refusal Space shall commence upon the
commencement date stated in the Advice and thereupon
such Refusal Space shall be considered a part of the
Premises, provided that all of the terms stated in the
Advice, including the termination date set forth in the
Advice, shall govern Tenant's leasing of the Refusal
Space and only to the extent that they do not conflict
with the Advice, the terms and conditions of the Lease
shall apply to the Refusal Space. Tenant shall pay Base
Rent and Additional Rent for the Refusal Space in
accordance with the terms and conditions of the Advice.
b. The Refusal Space (including improvements and
personality, if any) shall be accepted by Tenant in its
condition and as-built configuration existing on the
earlier of the date Tenant takes possession of the
Refusal Space or the date the term for such Refusal
Space commences, unless the Advice specifies work to be
performed by Landlord in the Refusal Space, in which
case Landlord shall perform such work in the Refusal
Space. If Landlord is delayed delivering possession of
the Refusal Space due to the holdover or unlawful
possession of such space by any party, Landlord shall
use reasonable efforts to obtain possession of the
space, and the commencement of the term for the Refusal
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Space shall be postponed until the date Landlord
delivers possession of the Refusal Space to Tenant free
from occupancy by any party.
3. Termination of Right of First Refusal. The rights of Tenant
hereunder with respect to the Refusal Space shall terminate on
the earlier to occur of (i) April 30, 2007; (ii) Tenant's
failure to exercise its Right of First Refusal within the 5
day period provided in Section 1 above; and (iii) the date
Landlord would have provided Tenant an Advice if Tenant had
not been in violation of one or more of the conditions set
forth in Section 1 above.
4. Refusal Space Amendment. If Tenant exercises its Right of
First Refusal, Landlord shall prepare an amendment (the
"Refusal Space Amendment") adding the Refusal Space to the
Premises on the terms set forth in the Advice and reflecting
the changes in the Base Rent, Rentable Square Footage of the
Premises, Tenant's Pro Rata Share and other appropriate terms.
A copy of the Refusal Space Amendment shall be sent to Tenant
within a reasonable time after Landlord's receipt of the
Notice of Exercise executed by Tenant, and Tenant shall
execute and return the Refusal Space Amendment to Landlord
within 15 days thereafter, but an otherwise valid exercise of
the Right of First Refusal shall be fully effective whether or
not the Refusal Space Amendment is executed.
5. Subordination. Notwithstanding anything herein to the
contrary, Tenant's Right of First Refusal is subject and
subordinate to (i) the renewal or extension rights of any
tenant leasing all or any portion of the Refusal Space, and
(ii) the expansion rights (whether such rights are designated
as a right of first offer, right of first refusal, expansion
option or otherwise) of any tenant of the Building existing on
the date hereof.
VII. MISCELLANEOUS.
A. This Amendment sets forth the entire agreement between the parties
with respect to the matters set forth herein. There have been no
additional oral or written representations or agreements. Under no
circumstances shall Tenant be entitled to any Rent abatement,
improvement allowance, leasehold improvements, or other work to the
Premises, or any similar economic incentives that may have been
provided Tenant in connection with entering into the Lease, unless
specifically set forth in this Amendment.
B. Except as herein modified or amended, the provisions, conditions and
terms of the Lease shall remain unchanged and in full force and
effect.
C. In the case of any inconsistency between the provisions of the Lease
and this Amendment, the provisions of this Amendment shall govern
and control.
D. Submission of this Amendment by Landlord is not an offer to enter
into this Amendment but rather is a solicitation for such an offer
by Tenant. Landlord shall not be bound by this Amendment until
Landlord has executed and delivered the same to Tenant.
E. The capitalized terms used in this Amendment shall have the same
definitions as set forth in the Lease to the extent that such
capitalized terms are defined therein and not redefined in this
Amendment.
F. Tenant hereby represents to Landlord that Tenant has dealt with no
broker, other than Xxx Xxxxx ("Broker") in connection with this
Amendment. Tenant agrees to indemnify and hold Landlord, its
members, principals, beneficiaries, partners, officers, directors,
employees, mortgagee(s) and agents, and the respective principals
and members of any such agents (collectively, the "Landlord Related
Parties") harmless from all claims of any brokers, other than
Broker, claiming to have represented Tenant in connection with this
Amendment. Landlord hereby represents to Tenant that Landlord has
dealt with no broker in connection with this Amendment. Landlord
agrees to indemnify and hold Tenant, its members, principals,
beneficiaries, partners, officers, directors, employees, and agents,
and the respective principals and members of any such agents
(collectively, the "Tenant Related Parties") harmless from all
claims of any brokers claiming to have represented Landlord in
connection with this Amendment.
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G. Each signatory of this Amendment represents hereby that he or she
has the authority to execute and deliver the same on behalf of the
party hereto for which such signatory is acting.
IN WITNESS WHEREOF, Landlord and Tenant have duly executed this Amendment
as of the day and year first above written.
LANDLORD:
STERLING PLAZA LIMITED PARTNERSHIP, A
DELAWARE LIMITED PARTNERSHIP, DOING
BUSINESS IN TEXAS AS DALLAS STERLING
PLAZA LIMITED PARTNERSHIP
By: TX-Sterling Plaza Limited
Partnership, a Delaware limited
partnership, its general partner
By: TX-Sterling Plaza GP, L.L.C., a
Delaware limited liability
company, its general partner
By: Equity Office Management,
L.L.C., a Delaware limited
liability company, its non-
member manager
By: /s/ Xxxx Xxxxxx
---------------------------
Name: Xxxx Xxxxxx
Title: Vice President - Leasing
TENANT:
DIGITAL RECORDERS, INC. A NORTH CAROLINA
CORPORATION
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President, CEO, Chairman
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