Exhibit 10.1

 

FIRST AMENDMENT TO LEASE

 

This AMENDMENT TO LEASE (this “Amendment”), dated as of the 1st day of
September, 2009, is entered into by and between WALTON CWTX CORPORATE PLACE 87,
LP, a Delaware limited partnership (“Landlord”) and INTRUSION INC., a Delaware
corporation (“Tenant”).

 

RECITALS:

 

WHEREAS, Landlord’s predecessor and Tenant entered into that certain Lease
Agreement dated January 12, 2004 (the “Lease”), wherein Landlord leased to
Tenant those certain premises consisting of approximately 32,834 rentable square
feet (the “Existing Premises”) at the property commonly known as 1101 East
Arapaho Road, Richardson, Texas; and

 

WHEREAS, Landlord and Tenant desire to extend the term of the Lease and reduce
the size of the Premises to those certain premises shown on the attached
Exhibit A and containing approximately 27,777 rentable square feet (the “New
Premises”), and otherwise modify certain terms and covenants of the Lease; and,

 

WHEREAS, the portion of the Existing Premises which Tenant is vacating consists
of 5,057 rentable square feet on the first floor and is shown in the attached
Exhibit B (the “First Floor Premises”).

 

NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:

 

1.                                       Definitions.  Unless otherwise
specifically set forth herein, all capitalized terms herein shall have the same
meaning as set forth in the Lease.

 

2.                                       Contraction.  As of September 1, 2009,
(the “Effective Date”) the Premises subject to the Lease shall be amended to be
the New Premises and Exhibit A attached to the Lease shall be deleted in its
entirety and the attached Exhibit A shall be substituted therefor.

 

3.                                       Term.  As of the Effective Date, the
Termination Date shall be extended to December 31, 2012.

 

4.                                       Rent Adjustments.  As of the Effective
Date, the terms “Base Year (Taxes)” and “Base Year (Expenses)” shall both mean
the calendar year 2009 and “Tenant’s Proportionate Share” shall be 30.24%.  In
calculating the total Expenses for any Lease Year after the Base Year
(Expenses), the Controllable Expenses (defined below) for such Lease Year shall
not exceed the Controllable Expenses for the Base Year (Expenses) (such amount,
the “Base Year Controllable Expenses”), increased at a rate of seven percent
(7%) per annum on a cumulative basis.  As used

 

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herein, “Controllable Expenses” shall mean those Expenses which are within the
reasonable control of Landlord, and shall not include any non-recurring capital
expenditures or costs which are not with the reasonable control of Landlord,
including, without limitation, expenses which are established by public
utilities, government regulation or multi-employer labor agreements; costs, such
as snow removal, varying according to weather conditions; or insurance costs. 
Thus, the portion of Expenses constituting Controllable Expenses for the first
Lease Year after the Base Year (Expenses) shall be limited to 107% of the Base
Year Controllable Expenses; the portion of Expenses constituting Controllable
Expenses for the second Lease Year after the Base Year (Expenses) shall be
limited to 114.49% of the Base Year Controllable Expenses; the portion of
Expenses constituting Controllable Expenses for the third Lease Year after the
Base Year (Expenses) shall be limited to 121.50% of the Base Year Controllable
Expenses; and so on.

 

The amounts which Landlord claims are due from Tenant pursuant to Article 4 of
the Lease for the Expenses and Taxes accrued for calendar years 2007, 2008
(estimated to be approximately $85,654) and 2009 prior to the Effective Date
(estimated to be approximately $57,128) and which have not been paid and are in
dispute by Tenant are hereby waived and forgiven; provided, however, that Tenant
hereby reserves all rights and remedies available to Tenant to, now or
hereafter, dispute such amounts are or were owed by Tenant.  Landlord and Tenant
both hereby acknowledge and agree that any dollar amounts included herein are
only estimates and actual amounts being forgiven pursuant to this Section 4 may
exceed or be less than such amounts.  Landlord hereby represents to Tenant that,
as of the Effective Date, Landlord has no knowledge of any amounts which
Landlord believes are owing by Tenant under the Lease, other than the Expense
and Tax amounts listed above and forgiven under this Amendment.

 

5.                                       Rent.  As of the Effective Date, the
Base Rent for the Premises shall be as follows:

 

PERIOD

 

ANNUAL RENT

 

ANNUAL
RENT PSF

 

MONTHLY
INSTALLMENT OF
ANNUAL RENT

 

 

 

 

 

 

 

 

 

 

9/1/2009 – 12/31/2009

 

 

$

0.00

 

$

0.00

 

$

0.00

 

 

 

 

 

 

 

 

 

 

1/1/2010 – 6/30/2011

 

 

$

340,268.25

 

$

12.25

 

$

28,355.69

 

 

 

 

 

 

 

 

 

 

7/1/2011 – 12/31/2012

 

 

$

368,045.25

 

$

13.25

 

$

30,670.44

 

 

 

 

 

 

 

 

 

 

1/1/2013 – 2/28/2013
(option period)

 

 

$

0.00

 

$

0.00

 

$

0.00

 

 

 

 

 

 

 

 

 

 

3/1/2013 – 2/29/2016
(option period)

 

 

$

416,655.00

 

$

15.00

 

$

34,721.25

 

 

6.                                       Option to Extend.  Exhibit E of the
Lease is hereby deleted in its entirety and the following substituted therefor:

 

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Tenant shall, provided the Lease is in full force and effect and Tenant is not
in default under any of the other terms and conditions of the Lease at the time
of notification or commencement, have the option to extend the term of this
Lease for one term of thirty-eight (38) months.  If Tenant elects to exercise
said option, then Tenant shall provide Landlord with written notice no later
than December 31, 2011.  If Tenant fails to provide such notice, Tenant shall
have no further or additional right to extend or renew the term of the Lease. 
Such extension shall be on an “as is, where is” basis and Landlord shall have no
obligation to provide any improvements or construction allowance to Tenant. 
This option is not transferable; the parties hereto acknowledge and agree that
they intend that the aforesaid option to renew this Lease shall be “personal” to
Tenant as set forth above and that in no event will any assignee or sublessee
have any rights to exercise the aforesaid option to renew.

 

7.                                       Condition of New Premises.  Landlord
shall deliver the New Premises in “as-is, where-is” condition, with no
alterations, additions, repairs or improvements to be made by Landlord.

 

8.                                       Vacation of First Floor Premises.  On
or before October 15, 2009 (the “Delivery Date”), Tenant shall deliver full
possession of the First Floor Premises to Landlord, in the condition required as
though the Lease were then terminating as to the Existing Premises, with all
personal property (including, but not limited to, furniture) removed therefrom. 
Tenant’s failure to so deliver the Existing Premises to Landlord as of the
Delivery Date shall be considered a holding over pursuant to Article 14 of the
Lease.  Except as otherwise provided in this Amendment, as of the Effective
Date, Tenant shall have no further obligation to Landlord with respect to the
First Floor Premises other than obligations accrued on or prior to the Effective
Date, and those obligations which would survive the expiration or early
termination of the Lease.

 

9.                                       Option to Expand.  Provided Tenant is
not then in default under the terms, covenants and conditions of the Lease,
Tenant shall have the right to lease the First Floor Premises for occupancy as
of the date Landlord delivers the First Floor Premises to Tenant (the “Delivery
Date”).  In the event that Tenant desires to exercise its option, it shall
deliver notice of such exercise to Landlord on or before August 31, 2010,
failing which Landlord may lease the First Floor Premises to any third party on
whatever basis Landlord desires, and Tenant shall have no further rights with
respect to the First Floor Premises.  If Tenant exercises an expansion option
hereunder, effective as of the Delivery Date, the First Floor Premises shall
automatically be included within the Premises and subject to all the terms and
conditions of the Lease, except as follows:  (i)  Tenant’s Proportionate Share
shall be recalculated, using the total square footage of the Premises, as
increased by the First Floor Premises; (ii) the First Floor Premises shall be
leased on an “as is” basis and Landlord shall have no obligation to improve the
First Floor Premises or grant Tenant any improvement allowance thereon;
(iii) the Annual Rent for the First Floor Premises shall be the same, on a per
rentable square foot basis, as the Annual Rent for the New Premises; and,
(iv) if requested by Landlord, Tenant shall, prior to the beginning of the term
for the First Floor Premises, execute a written memorandum confirming the
inclusion of the First Floor Premises and the Annual Rent for the First Floor
Premises.  This option is not transferable; the parties hereto acknowledge and
agree that they intend that the aforesaid option

 

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to lease the First Floor Premises shall be “personal” to Tenant as set forth
above and that in no event will any assignee or sublessee have any rights to
exercise the aforesaid option.

 

10.                                 HVAC Expenses.  As of the Effective Date,
any reference to “HVAC Expenses” in the Lease shall be deleted and Tenant shall
have no further obligation to pay such sum; however, Tenant shall continue to be
liable for any such sums accrued up to the Effective Date.

 

1.                                       SNDA.  At Tenant’s request and at
Tenant’s sole expense, Landlord shall use commercially reasonable efforts to
obtain a reasonable and customary subordination and non-disturbance agreement
from its mortgagee, in a form reasonably acceptable to such lender, Landlord and
Tenant, but the failure to obtain such subordination and non-disturbance
agreement shall not be a breach or failure of condition of the Lease or this
Amendment.  Tenant shall reimburse Landlord for any costs and expenses actually
charged or passed through to Landlord from its mortgagee in connection
therewith.

 

2.                                       Brokers.   Landlord and Tenant hereby
represent to the other that Landlord has been represented by CB Richard Ellis
and that Tenant has been represented by NAI Robert Lynn and they had no dealings
with any other brokers in connection with this Amendment and that they know of
no other brokers who are entitled to a commission or finder’s fee in connection
with this Lease. Each party agrees to indemnify and hold harmless the other
party from all claims demands, losses, liabilities, lawsuits, judgments, and
costs and expenses (including reasonable attorney fees) for any leasing
commission, finder’s fee, or equivalent compensation by any other brokers
claiming to have represented such party in connection with this Amendment. 
Landlord hereby agrees to pay any commissions due to the foregoing brokers. 
Landlord agrees that, if Tenant exercises its option to extend as set forth in
Paragraph 6 above, Landlord shall pay the foregoing brokers as follows:

 

(a)                                  An amount equal to the Adjusted Rent (as
defined below) for the extended Term multiplied by four and one half percent
(4.50%), in the case of the commission due NAI Robert Lynn, and two and one
quarter percent (2.25%), in the case of the commission due CB Richard Ellis.

 

(b)                                 “Adjusted Rent” is the base rent payable for
the extended Term, not including in such amount any rents which are not actually
intended to be paid by Tenant, such as free rent or abated rent, additional
rents, percentage rents, reimbursements, amortized tenant improvements in excess
of the applicable building standard, or other amortized concessions given to the
tenant.

 

(c)                                  Such commission shall be paid upon the
later to occur of:  (i) commencement of the extended Term; or (ii) thirty (30)
days after Landlord’s receipt of the broker’s invoice for such amount.

 

3.                                       Recapture Upon Default.  Tenant
understands and agrees that in entering into this Amendment, Landlord is relying
upon receipt of all the Annual and Monthly Installments of Rent to become due
over the full Term of this Lease for amortization of the Concession Amount. 
Therefore, the parties agree that the Concession Amount, as defined in
Section 19.3 of the Lease,

 

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includes the concessions for this Amendment, namely:  brokers’ commissions, four
months’ abated rent and the Expenses and Taxes amounts forgiven under Paragraph
4 above.

 

4.                                       Incorporation.  Except as otherwise
amended herein, all other terms and conditions of the Lease shall remain in full
force and effect and Tenant hereby ratifies and confirms its obligations
thereunder.  Tenant acknowledges that as of the date of this Amendment, Tenant
(i) is not in default under the terms of the Lease; (ii) has no defense, set off
or counterclaim to the enforcement by Landlord of the terms of the Lease; and
(iii) is not aware of any action or inaction by Landlord that would constitute
an event of default by Landlord under the Lease.

 

5.                                       Limitation of Landlord Liability. 
Redress for any claims against Landlord under this Amendment or the Lease shall
be limited to and enforceable only against and to the extent of Landlord’s
interest in the Property.  The obligations of Landlord under this Amendment and
the Lease are not intended to be and shall not be personally binding on, nor
shall any resort be had to the private properties of, any of Landlord’s or its
investment manager’s trustees, directors, officers, partners, beneficiaries,
members, stockholders, employees, or agents, and in no case shall Landlord be
liable to Tenant hereunder for any lost profits, damage to business, or any form
of special, indirect or consequential damages.

 

IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment as of the
day and year first written above.

 

LANDLORD:

WALTON CWTX CORPORATE PLACE 87, LP, a Delaware limited partnership

 

TENANT:

INTRUSION INC., a Delaware corporation

 

 

 

By:   WCV Commercial Properties Inc., an Illinois corporation, its authorized
agent

 

 

 

 

 

By:

 

 

By:

 

Name:

 

Name:

 

Title:

 

Title:

 

 

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EXHIBIT A

 

attached to and made a part of the First Amendment to Lease

dated September 1, 2009 between

 WALTON CWTX CORPORATE PLACE 87, LP as Landlord, and

INTRUSION INC. as Tenant

 

1101 E. Arapaho Road, Suite 100, Richardson, Texas

 

NEW PREMISES

 

[g264441kgi001.jpg]

 

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EXHIBIT B

 

attached to and made a part of the First Amendment to Lease

dated September 1, 2009 between

 WALTON CWTX CORPORATE PLACE 87, LP as Landlord, and

INTRUSION INC. as Tenant

 

1101 E. Arapaho Road, Suite 100, Richardson, Texas

FIRST FLOOR PREMISES

 

[g264441kgi002.jpg]

 

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