Document:

<PAGE>
                                                                   EXHIBIT 10.29

STATE OF NORTH CAROLINA

COUNTY OF DURHAM                                          SECOND LEASE AMENDMENT

      THIS SECOND LEASE AMENDMENT (the "Amendment") is entered into and
effective this 18 day of June, 2003, by and between PROPERTY RESERVE, INC, a
Utah corporation (hereinafter "Landlord"), and DIGITAL RECORDERS, INC., a North
Carolina corporation (hereinafter, "Tenant").

                                    RECITALS:

      A. The Prudential Savings Bank, F.S.B., as Trustee ("Prudential") and
Tenant entered into a Lease Agreement dated December 18, 1998, as amended by
First Lease Amendment dated December 11, 2002, between Landlord, successor in
interest to Prudential's interest as landlord (as amended, the "Lease"), for
approximately twenty-two thousand four hundred eighty-four (22,484) rentable
square feet of space (the "Existing Premises") located in Suite 100 at that
certain building known as 4018 Patriot Drive, Durham, Durham County North
Carolina 27709, being part of that development known as One Park Center.

      B. Landlord and Tenant now desire to modify and amend the Lease pursuant
to the terms and conditions contained herein.

                                   AGREEMENT:

      NOW, THEREFORE, for valuable consideration and ONE AND NO/100 DOLLARS
($1.00) paid by Tenant to Landlord, Landlord and Tenant agree that the Lease is
modified and amended as follows:

      1.    Commencing on the Additional Space Commencement Date, as defined
            herein, the Premises shall be expanded to include approximately four
            thousand rentable square feet (4,000 r.s.f.), more or less, (the
            "Additional Space") contiguous to the Existing Premises, as shown on
            Exhibit A, attached hereto and incorporated herein by reference. As
            of the Additional Space Commencement Date, the Premises shall
            contain a total of twenty-six thousand four hundred eighty-four
            rentable square feet (26,484 r.s.f.).

      2.    As of July 1, 2003:

            a.    Tenant's Pro Rata Share for operating expense pass throughs
                  and other purposes shall be recalculated based on the revised
                  square footage of the Premises; and

            b.    The Base Year Amount for determining operating expense pass
                  throughs attributable for the Additional Space incurred after
                  the Additional Space Commencement Date shall be the operating
                  expenses paid or incurred by

<PAGE>

                  Landlord for calendar year 2003. The Base Year(s) for the
                  Existing Space shall remain unchanged; and

            c.    In addition to the Base Rent on the Existing Premises, Tenant
                  shall pay Base Rent on the Additional Space as follows:

<TABLE>
<CAPTION>
                                                         Installment of Monthly Base
                             Month                                  Rent
                             -----                                  ----
                  <S>                                    <C>
                  July 1, 2003 - April 30, 2004                   $1,983.33
                  May 1, 2004 - April 30, 2005                    $2,042.83
                  May 1, 2005 - April 30, 2006                    $2,104.12
                  May 1, 2006 - April 30, 2007                    $2,167.24
                  May 1, 2007 - April 30, 2008                    $2,232.26
                  May 1, 2008 - April 30, 2009                    $2,299.23
</TABLE>

            d.    Any other sums calculated based on rentable square footage of
                  the Premises shall be recalculated based on 26,484 rentable
                  square feet. The provisions of Paragraph 3(h) of or Lease
                  limiting annual increases in Controllable Expenses shall not
                  limit increases arising from the increase in the rentable
                  square footage of the Premises.

            e.    Except as specifically modified hereby, all references to
                  "rent," "Base Rent," "operating expenses," and "additional
                  rent" shall be interpreted to apply as and to reflect the
                  revised square footage of the Premises.

      3.    The term of the Lease shall not be affected by this Second
            Amendment; the Lease shall expire as of April 30, 2009, unless
            earlier terminated as set forth in the Lease.

      4.    The "Additional Space Commencement Date" shall mean the date
            Landlord and Tenant execute this Lease. It is understood that
            Tenant may use the Additional Space once the Lease is fully executed
            and pay no rent until July 1, 2003. Tenant agrees to execute a
            document setting out the actual Additional Space Commencement Date
            upon Landlord's request.

      5.    Tenant has examined and inspected the Additional Space and accepts
            the Additional Space in all respects "AS IS" and "WHERE IS."

      6.    Tenant understands and agrees that certain services and utilities,
            including but not limited to electrical, gas, water and sewer which
            are provided to the 4,000 r.s.f added by the First Lease Amendment
            and to the 4,000 r.s.f. added by this Second Lease Amendment are not
            separately metered for such space and/or have not been

                                       2
<PAGE>

            contracted directly between Tenant and the service provider. As to
            such services and utility charges, Landlord may charge Tenant and
            Tenant agrees to pay upon demand as additional rent Tenant's
            equitable share of such charges as reasonably determined by
            Landlord. Landlord shall determine Tenant's share in a reasonable
            manner, such as, for example, the proportion that the square footage
            of Tenant's space using such services/utilities bears in relation to
            the square footage on that particular meter; provided however, the
            parties agree that to the extent usage/cost may differ because of
            occupancy or vacancy of the metered space, Landlord may equitably
            adjust ("gross up") the costs to reflect a fair charge for such
            usage/cost.

      7.    Landlord acknowledges that it currently holds $12,707.25 as a
            Security Deposit pursuant to Paragraph 3(b) of the Lease, As of the
            Additional Space Commencement Date, Tenant shall deposit an
            additional $ -0- with Landlord to be added to the Security Deposit,
            bringing the total Security Deposit being held by Landlord in
            connection with the Lease to $12,707.25.

      8.    The permitted usage under Paragraph 5(a) of the Lease is revised to
            include storage, subject to the prohibitions set forth in the Lease
            such as the prohibition on storage of explosive or highly flammable,
            toxic or hazardous substances.

      9.    Tenant is currently in the process of negotiating adding an
            additional 4,000 approximate rentable square feet to the Premises.
            It is understood and agreed that so long as allowed by applicable
            law, Landlord initially will simply mark the boundaries of the
            Additional Space on the floor of the warehouse space and will not
            build a wall separating the Additional Space. Tenant will respect
            such marked lines as the boundary of its Additional Space. If
            Landlord and Tenant have not negotiated a lease or lease amendment
            for the contemplated 4,000 additional rental square feet within
            sixty (60) days from the date hereof, then Landlord may build a wall
            setting off the Additional Space.

      10.   Tenant acknowledges that any guaranty, letter of credit, or other
            form of security which was intended to be applicable to the Existing
            Premises or Lease pursuant to Paragraph 3 of Exhibit D to tile Lease
            shall also be applicable, to the Additional Space and the Lease as
            amended by this Second Lease Amendment. Tenant agrees to deliver
            such documents or other items, signed by all appropriate parties as
            may be requested by Landlord to evidence this agreement.

      11.   Tenant represents and warrants to Landlord that tenant has not
            entered into any agreements, nor will tenant enter into any
            agreement in the future whereby Landlord would be obligated to pay
            any broker's commission or finder's fee in connection with Tenant's
            execution of this Second Lease Amendment. Tenant agrees to indemnify
            Landlord against, and to hold Landlord harmless from, all
            liabilities arising from any such claim.

      12.   Capitalized terms not defined herein shall have the same meaning as
            set forth in the Lease.

                                       3
<PAGE>

      13.   Except as specifically modified hereby, all the terms and provisions
            of the Lease shall remain in full force and effect and are hereby
            affirmed and ratified.

      IN WITNESS WHEREOF, Landlord and tenant have executed this Second
Amendment to Lease in triplicate originals, all as of the day and year first
above written.

                                                   LANDLORD:

                                                   PROPERTY RESERVE, INC.,
                                                   a Utah corporation

                                                   By: _________________________
                                                   Name: _______________________
                                                   Title: ______________________

                                                   Date: _______________________

                                                   TENANT:

                                                   DIGITAL RECORDERS, INC.,
                                                   a North Carolina corporation

                                                   By: /s/ Lawrence A. Hagemann
                                                       -------------------------
                                                   Name: LAWRENCE A. HAGEMANN
                                                   Title: EVP

                                                   Date: June 18, 2003

<PAGE>

                              SCHEDULE OF EXHIBITS

Exhibit A   Diagram showing Additional Space in relation to its location in the
            Building. Preferable to cross hatch Additional Space.

<PAGE>

                                    PREMISES

                             [ONE PARK CENTER MAP]<PAGE>
                                                                   EXHIBIT 10.30

STATE OF NORTH CAROLINA

COUNTY OF DURHAM                                           THIRD LEASE AMENDMENT

      THIS THIRD LEASE AMENDMENT (the "Amendment") is entered into and effective
this 21st day of August, 2003, by and between PROPERTY RESERVE, INC, a Utah
corporation (hereinafter "Landlord"), and DIGITAL RECORDERS, INC., a North
Carolina corporation (hereinafter, "Tenant").

                                    RECITALS:

      A. The Prudential Savings Bank, F.S.B., as Trustee ("Prudential") and
Tenant entered into a Lease Agreement dated December 18, 1998, as amended by
First Lease Amendment dated December 11, 2002, and Second Lease Amendment dated
June 18, 2003 between Landlord, successor in interest to Prudential's interest
as landlord (as amended, the "Lease"), for approximately twenty-six thousand
four hundred eighty-four (26,484) rentable square feet of space (the "Existing
Premises") located in Suite 100, being at the east end of that certain building
known as 4018 Patriot Drive, Durham, Durham County North Carolina 27709 (the
"Building"), being part of that development known as One Park Center.

      B. Landlord and Tenant now desire to modify and amend the Lease pursuant
to the terms and conditions contained herein.

                                   AGREEMENT:

      NOW, THEREFORE, for valuable consideration and ONE AND NO/100 DOLLARS
($1.00) paid by Tenant to Landlord, Landlord and Tenant agree that the Lease is
modified and amended as follows:

      1.    Commencing on the Additional Space Commencement Date, as defined
            herein, the Premises shall be expanded to include approximately Four
            Thousand Six Hundred Eighty-eight rentable square feet (4,688
            r.s.f.), more or less, (the "Additional Space") on the west end of
            the Building, as shown on Exhibit A, attached hereto and
            incorporated herein by reference. As of the Additional Space
            Commencement Date, the Premises shall contain a total of Thirty-one
            Thousand One Hundred Seventy-two rentable square feet (31,172
            r.s.f).

      2.    As of the Additional Space Commencement Date:

            a.    Tenant's Pro Rata Share for operating expense pass throughs
                  and other purposes shall be recalculated based on the revised
                  square footage of the Premises; and

            b.    The Base Year Amount for determining operating expense pass
                  throughs attributable for the Additional Space incurred after
                  the Additional Space

<PAGE>

                  Commencement Date shall be the operating expenses paid or
                  incurred by Landlord for calendar year 2003. The Base Year(s)
                  for the Existing Space Shall remain unchanged; and

            c.    In addition to the Base Rent on the Existing Premises, Tenant
                  shall pay Base Rent on the Additional Space as follows:

<TABLE>
<CAPTION>
                                                                   Installment of Monthly Base
                                  Month                                       Rent
                                  -----                                       ----
                  <S>                                              <C>
                  1 (beginning with the Additional Space                    $    0.00
                  Commencement Date)                                 (one month "free rent")
                  2-12                                                      $2,715.13
                  13-24                                                     $2,797.17
                  25-36                                                     $2,879.21
                  37-48                                                     $2,965.16
                  49-60                                                     $3,055.01
                  61-66*                                                    $3,144.87
</TABLE>

                  *66 month term assumes Additional Space Commencement Date is
                  November 1, 2003; Notwithstanding any assumed "lease term" it
                  is understood that the Lease term is not extended by this
                  Amendment and that the base rent for the Additional Space is
                  based on a rate of $6.95 per rentable square foot with 3%
                  annual escalations.

            d.    Any other sums calculated based on rentable square footage of
                  the Premises shall be recalculated based on 31,172 rentable
                  square feet. The provisions of Paragraph 3(h) of the Lease
                  limiting annual increases in Controllable Expenses shall not
                  limit increases arising from the increase in the rentable
                  square footage of the Premises.

            e.    Except as specifically modified hereby, all references to
                  "rent," "Base Rent," "operating expenses," and "additional
                  rent" shall be interpreted to apply as and to reflect the
                  revised square footage of the Premises.

      3.    The term of the Lease shall not be affected by this Third Amendment;
            the Lease shall expire as of April 30, 2009, unless earlier
            terminated as set forth in the Lease.

      4.    The "Addtional Space Commencement Date" shall mean the Scheduled
            Additional Space Commencement Date as defined in Exhibit B subject
            to adjustment as set out herein. Tenant agrees to execute a document
            setting out the actual Additional Space Commencement Date upon
            Landlord's request.

                                       2
<PAGE>

      IN WITNESS WHEREOF, Landlord and Tenant have executed this Third Amendment
to Lease in triplicate originals, all as of the day and year first
above-written.

                                          LANDLORD:

                                          PROPERTY RESERVE, INC.,
                                          a Utah corporation

                                          By: /s/ Mark B. Gibbons,
                                              -------------------------
                                          Name: _______________________
                                          Title: Mark B. Gibbons, President

                                          Date: 8/27/03

                                          TENANT:

                                          DIGITAL RECORDERS, INC.,
                                          a North Carolina corporation.

                                          By: /s/ Lawrence A. Taylor
                                              -------------------------
                                          Name: LAWRENCE A. TAYLOR
                                          Title: CFO & SECRETARY

                                          Date: 8/21/03

                                       3
<PAGE>

                                   EXHIBIT A

                                     [MAP]

<PAGE>

                                    EXHIBIT B
                      POSSESSION AND LEASEHOLD IMPROVEMENTS

1.    Landlord conveys and Tenant accepts the Additional Space in its current
      "as is" condition and configuration, except that Landlord at Tenant's sole
      cost (subject to the Tenant Allowance as described below) shall construct
      the improvements shown on Exhibit B-1 attached hereto and incorporated
      herein by reference. It is expressly understood and agreed that
      Landlord's obligation with respect to the construction and finishing of
      the Additional Space shall be limited to the scope of work described in
      Exhibit B-1 ("Landlord's Work") and shall in no event include any work not
      described in Exhibit B-1. All Landlord's Work shall constitute
      improvements to the Demised Premises which shall, at Landlord's option,
      become sole property of Landlord and shall remain at the Demised Premises
      upon expiration of the Lease or termination of Tenant's right to
      possession of the Demised Premises.

2.    For purposes of this Amendment, the term "Scheduled Additional Space
      Commencement Date" shall mean November 15, 2003. Landlord will proceed to
      complete Landlord's Work. Landlord will deliver Landlord's Work and tender
      possession of the Additional Space to Tenant when the Landlord's Work has
      been completed to the extent that only minor construction details, which
      would not materially interfere with Tenant's use and enjoyment of the
      Additional Space, require completion or correction ("substantially
      completed"). The "Additional Space Commencement Date" is the day Landlord
      delivers Landlord's Work and tenders possession of the Additional Space
      (subject to the terms of Paragraph 6 below), which will be the Scheduled
      Additional Space Commencement Date, unless the Additional Space
      Commencement Date is extended according to Paragraph 5 below. Tenant shall
      accept the Landlord's Work and possession of the Additional Space when
      Landlord tenders and delivers them, provided the Landlord's Work has been
      substantially completed as set forth above, and provided further that
      Tenant shall not be required to accept possession prior to the Scheduled
      Additional Space Commencement Date.

3.    Landlord and Tenant agree to execute a document after possession of the
      Additional Space is delivered to Tenant specifying the Additional Space
      Commencement Date.

4.    In no event shall Tenant be required to occupy the Additional Space prior
      to the Scheduled Additional Space Commencement Date. If Tenant, with
      Landlord's consent, occupies the Additional Space or any part thereof
      prior to the Scheduled Additional Space Commencement Date, then Tenant's
      and Landlord's obligations as to the Additional Space, including the
      payment of rent as set forth hereunder, shall commence as of such earlier
      date, which shall be deemed the Additional Space Commencement Date for the
      purposes of the Lease and this Third Lease Amendment.

5.    If Landlord fails to (i) tender possession of the Additional Space to
      Tenant; or (ii) deliver the Landlord's Work to Tenant on or before the
      Scheduled Additional Space

<PAGE>

      Commencement Date, Landlord will not be in default or liable in damages to
      Tenant, nor will the obligations of Tenant be affected, provided however,
      that

      (a)   the Additional Space Commencement Date will be extended
            automatically by one day for each day of the period after the
            Scheduled Additional Space Commencement Date to the day on which
            Landlord tender possession of the Demised Premises to Tenant, less
            any portion of that period attributable to Tenant's delays as more
            particularly described in Paragraph 6 below; and

      (b)   if Landlord does not (i) tender possession of the Additional Space
            to Tenant and (ii) deliver the Landlord's Work to Tenant on or
            before the date six (6) months after the Scheduled Additional Space
            Commencement Date (plus any period of delay caused by Tenant's
            delays described in Paragraph 6 below,) Tenant shall have the right
            to terminate this Amendment, by delivering written notice of
            termination to Landlord not more than ten (10) days after such
            tender deadline date.

6.    Notwithstanding anything contained herein to the contrary, the Additional
      Space Commencement Date (and therefore Tenant's obligations for the
      payment of rent with respect to the Additional Space) shall not be delayed
      or extended if Landlord is delayed in substantially completing Landlord's
      Work as a result of:

      (a)   any delays in Tenant providing information requested by Landlord or
            approving plans, specifications, construction drawings in
            connection with the Landlord's Work;

      (b)   Tenant's request for materials or installations as part of the
            Landlord's Work that are other than Building standard materials or
            installations.

      (c)   any change order or changes in any drawings, plans or specifications
            requested by Tenant;

      (d)   Tenant's failure to review or approve in a timely manner any item
            requiring Tenant's review or approval;

      (e)   performance of any additional Tenant Improvements or any failure to
            complete or delay in completion of such work; or

      (f)   any other act or omission of Tenant, or Tenant's architects,
            engineers, contractors or subcontractors (all of which will be
            deemed to be delays caused by Tenant).

      In such event, the Additional Space Commencement Date will only be
extended under Paragraph 5 above until the date on which Landlord would have
substantially completed the performance of such work but for such delays.

<PAGE>

7.    Notwithstanding anything contained herein or in the Lease to the contrary,
Landlord may withhold its approval to any work, plans, specifications or
drawings that require work which:

      (a) exceeds or adversely affects the capacity or integrity of the
      Building's structure or any of its heating, ventilating, air conditioning,
      plumbing, mechanical, electrical, communications or other systems;

      (b) is not approved by the holder of any mortgage, deed of trust or other
      lender who has a security interest in the Building or the lessor of any
      ground lease interest, if any;

      (c) would not be approved by a prudent operator of property similar to the
      Building;

      (d) violates any agreement which affects the Building or binds Landlord;

      (e) Landlord reasonably believes will increase the cost of operating or
      maintaining any of the Building's systems;

      (f) Landlord reasonably believes will reduce the market value of the
      subject premises or the Building at the end of the term of the Lease;

      (g) does not conform to applicable building codes or is not approved by
      any governmental authority having jurisdiction over the subject premises;

      (h) does not meet or exceed Building standard; or

      (i) Landlord reasonably believes will infringe on the architectural or
      historical integrity of the Building.

8. The cost to be paid for Landlord's Work shall cover the cost for installation
of these improvements set out on Exhibit B-1, including any required permits;
provided, however, in no event shall Landlord pay any costs for the above
referenced items in excess of an aggregate of $56,256.00 (the "Tenant Allowance"
being $12.00 per rentable square foot of the Additional Space). The Tenant
Allowance may not be used to purchase equipment, furniture or materials for
Tenant's business operations. The Tenant Allowance shall not be used to pay for
work which Tenant performs itself. Any costs for the Landlord's Work in excess
of the Tenant Allowance shall be paid to Landlord by Tenant prior to
commencement of construction. Additionally, if during the course of performing
Landlord's Work, Landlord reasonably determines that the cost of Landlord's Work
shall exceed the Tenant Allowance, Tenant will, upon Landlord's request, deposit
the amount of such excess with Landlord. Landlord's obligation to continue
performance of Landlord's Work is subject to receipt of any such excess and
delays caused by failure to deposit such excess shall constitute Tenant Delays.
Failure by Tenant to pay same in full within ten (10) business days after being
notified by Landlord shall constitute failure to pay Rent when due and shall
constitute an event of default by Tenant hereunder, giving rise to all remedies
available to Landlord under this Lease Agreement and at law or in equity for
nonpayment of Rent. At Tenant's election, such election to be made within 10
days of the Additional Space Commencement Date, the excess of the upfit costs
over the Tenant Allowance

<PAGE>

for approved initial upfit items shall be amortized over the term of the Lease
at an interest rate of 8% per annum and Tenant shall pay such amortized cost
monthly as Additional Rent.

<PAGE>

                                  EXHIBIT B-1

                    [DIGITAL RECORDERS INC.- SPACE PLAN MAP]

<PAGE>

                                  EXHIBIT B-1

                                                                       31-Jul-03

ADVANTIS CONSTRUCTION

ESTIMATE COVER SHEET

JOB: DAC
REF: CRAIG SCATES                               4,800- TOTAL R.S.F.
AT: ONE PARK CENTER
EST:   0
DRWG: WATERTOWN 7/16/03

                                DIVISION SUMMARY

<TABLE>
<CAPTION>
                                                                          ALTERNATE
<S>                                                       <C>             <C>
DIV 1000 - GENERAL COND./ SUPERVISION / CLEANING          $ 7,812.00
DIV 2000 - DEMOLITION                                       5,700.00
DIV 3000 - CONCRETE                                             0.00
DIV 4000 - MASONRY                                              0.00
DIV 5000 - METALS                                               0.00
DIV 6000 - CASEWORK                                         4,800.00
DIV 7200 - THERMAL & MOISTURE PROTECTION                        0.00
DIV 7500 - ROOFING                                              0.00
DIV 7900 - CAULKING                                             0.00
DIV 8000 - DOORS & HARDWARE                                 5,920.00
DIV 8800 - GLASS                                              840.00
DIV 9250 - FRAMING & DRYWALL REPAIR                        13,325.00
DIV 9510 - ACOUSTICAL REPAIR                                1,250.00
DIV 9310 - TILE                                                 0.00
DIV 9600 - RESILIENT/CARPET(VCT IN ASSEMBLY AREA)           7,950.00
DIV 9900 - PAINT                                            4,790.00
DIV 10000 - HYDRAULIC DOCK LIFT(3000# CAPACITY)                 0.00      $ 7,658.00
DIV 15400 - PLUMBING                                        1,650.00
DIV 15500 - SPRINKLER                                       5,750.00
DIV 15800 - H.V.A.C.(RELOCATE STATS DIFFUSER)               2,940.00
DIV 16000 - ELECTRICAL /FIRE ALARM                         15,155.00
                                                          ----------
                 SUB-TOTAL :                               77,882.00
                       FEE :                                7,788.20
                                                          ----------
                 TOTAL COST:                              $85,670.20
                                                          ==========
                 PER SQ.FT.:                              $    17.85
                                                          ----------
</TABLE>

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