Document:

exv10w18

 

Exhibit 10.18

THIS PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. NO SALE OR
DISPOSITION MAY BE AFFECTED EXCEPT IN COMPLIANCE WITH RULE 144 UNDER SAID ACT OR AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL FOR THE HOLDER, SATISFACTORY TO THE
COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT OR RECEIPT OF A NO-ACTION LETTER FROM
THE SECURITIES AND EXCHANGE COMMISSION.

PROMISSORY NOTE

			
	$344,184.50
	 	April 30, 2007

Durham, North Carolina

     FOR VALUE RECEIVED, the undersigned (“Maker”), promises to pay to DIGITAL RECORDERS, INC.
(“Payee”) at P. O. Box 14068, Research Triangle Park, NC 27709-4068, the principal sum of Three
Hundred Forty-Four Thousand One Hundred Eighty-Four Dollars and 50/100 ($344,184.50), payable as
follows:

Principal shall be payable in four (4) equal annual installments of $86,046.12 each, with
the first payment due April 30, 2008 and subsequent payments due April 30, 2009, April 30,
2010 and April 30, 2011. In addition, interest on the unpaid balance shall be paid in
semi-annual installments at the prime rate of interest as published by the Wall Street
Journal on the date of its issuance, such rate to be adjusted on the anniversary date of
this Promissory Note.

     1. Subject to Offset. The obligation of Maker under this Note is subject to
modification, offset or reduction as set forth in Sections 2.2(a) and 9.2(c) of the Share Purchase
Agreement of even date herewith between Maker, Payee and Digital Audio Corporation.

     2. Default. This note and all other obligations and liabilities of the Maker to the
Payee shall become immediately due and payable without notice or demand upon the occurrence of any
of the following events with respect to Maker: filing of a voluntary or involuntary petition under
any provision of the
state or federal insolvency law (whether for bankruptcy,

 

 

reorganization, arrangement, composition,
extension, wage earner’s plan, or otherwise); application for or the appointment of a receiver;
assignment for the benefit of creditors; entry of judgment or issuance of a warrant of attachment;
appointment of a committee of creditors or a liquidating agent, or calling of a meeting of
creditors; or an offer of composition or extension to creditors, or a breach in the terms of the
security agreement, or a default in payment of any installment due hereunder if such default is not
cured within fifteen (15) days of written notice thereof.

     3. Release and Modification. The Payee may renew or extend this note, release any
party hereto, or waive or modify any provision hereof, without affecting the obligation of the
Maker.

     4. Right of Prepayment. Maker shall have the right to prepay this note at any time
without penalty.

     5. Captions. The use of captions in this note is for convenience only. Captions are
not intended to be used for, nor shall any caption be used in, the interpretation or construction
of this note.

     6. Collection. In the event this note is not paid when due at any stated or
accelerated maturity, the Maker agrees to pay, in addition to the principal and interest, all costs
of collection, including reasonable attorneys’ fees.

	 	 	 	 	 	 	 
	 	 	DOLPHIN DIRECT EQUITY PARTNERS, LP	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Dolphin Advisors, LLC	 	 
	 

	 	 	 	Its managing general partner	 	 
	 

	 	By:
	 	Dolphin Management Inc.	 	 
	 

	 	 	 	Its managing member	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Peter E. Salas	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Peter E. Salas	 	 
	 

	 	Title:
	 	Presidentexv10w35

 

Exhibit 10.35

ADDENDUM

TO LEASE AGREEMENT FOR A GAMMA KNIFE UNIT

     This ADDENDUM TWO TO LEASE AGREEMENT FOR A GAMMA KNIFE UNIT (this “Addendum”) is dated
effective as of April 13, 2007, and is entered into between GK FINANCING, LLC, a California limited
liability company (“GKF”) or its wholly owned subsidiary whose obligation under this Agreement
shall be guaranteed by GKF, and OSF Healthcare System, an Illinois not for profit corporation,
owner and operator of St. Francis Medical Center (“Medical Center”), with reference to the
following recitals:

Recitals:

     WHEREAS, on February 18, 2000, GKF and Medical Center executed a Lease Agreement for a Gamma
Knife Unit (the “Lease”); and

     WHEREAS, the parties desire to amend the terms and provisions of the Lease as set forth
herein.

     NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and
for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

Agreement:

     1. Defined Terms. Unless otherwise defined herein, the capitalized terms used herein
shall have the same meanings set forth in the Lease.

     2. Extension of Lease Term.

          a. It is acknowledged that the Commencement Date of the Lease is May 14, 2001. In view of the
provisions set forth below in this Section, Section 18 of the Lease is hereby deleted in its
entirety.

          b. In consideration of the “Upgrade and First Reload” described below, the Term of the Lease
as set forth in Section 6 of the Lease is hereby extended for an additional five (5) years
(collectively, the “First Extension”). The First Extension shall commence on May 14, 2011 (which
is the expiration date of the initial Term of the Lease).

          c. If the “Second Reload” is performed as described below, then, in consideration thereof, the
Term of the Lease (as extended by the First Extension) shall be automatically extended for an
additional three (3) years (collectively, the “Second Extension”). The Second Extension shall
commence on May 14, 2016 (which is the expiration date of the First Extension).

          d. All references in the Lease to the “Term” shall be deemed to refer to the Term, as extended
by the First Extension and the Second Extension, as applicable.

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     3. Upgrade and Cobalt Reload of the Equipment. Section 15 of the Lease is hereby
deleted in its entirety and replaced with the following:

     “15.1 Upgrade and First Reload. Subject to the terms and conditions
set forth below, (a) GKF, at GKF’s cost and expense, shall replace and upgrade the
Equipment to a Leksell Gamma Knife Perfexion model (the “Perfexion Model”) and
reload the Equipment (as upgraded) with new cobalt-60 (the “Upgrade and First
Reload”), which Upgrade and First Reload shall be performed at the Site; and (b) GKF
shall use its commercially reasonable efforts to perform the Upgrade and First
Reload during summer/fall 2007, subject to availability of the Perfexion Model from
the equipment manufacturer. It is anticipated that the Equipment will be
unavailable to perform procedures for approximately four to five weeks due to the
Upgrade and First Reload process. Medical Center agrees to be responsible for all
insurance, rigging, site modifications and installation costs related to the Upgrade
and First Reload, and the de-installation and removal of the existing Equipment.

     “15.2 Second Reload. Subject to the terms and conditions set forth
below, (a) GKF may elect, at its sole option and at its cost and expense, to reload
the Perfexion Model with new cobalt-60 (the “Second Reload”), which Second Reload
shall be performed at the Site; and (b) if GKF has elected to do so, GKF shall use
its commercially reasonable efforts to perform the Second Reload during the
13th year of the Lease. Medical Center agrees to be responsible for all
insurance, rigging, site modifications and installation costs related to the Second
Reload.

     “15.3 Medical Center Support. In connection with both the Upgrade and
First Reload and the Second Reload, Medical Center, at Medical Center’s cost and
expense, shall provide GKF with Medical Center personnel (including Medical Center
physicists) and services upon request and as required by GKF, among other things, to
oversee, supervise and assist with construction and compliance with local, state and
federal regulatory requirements and with nuclear regulatory compliance issues and
the calibration of the Perfexion Model.

     “15.4 Permits. Notwithstanding the foregoing, the Upgrade and First
Reload and the Second Reload (if applicable) shall be performed by GKF only after
all necessary and appropriate licenses, permits, approvals, consents and
authorizations, including, without limitation, the proper handling of the cobalt-60
(collectively, the “Permits”), have been obtained by Medical Center at Medical
Center’s sole cost and expense (other than any filing or registration fees which
shall be paid for by GKF). The timing and procedure for such Upgrade and First
Reload and the Second Reload (if applicable) shall be as mutually agreed upon
between the parties. Notwithstanding anything to the contrary contained in this
Agreement, GKF makes no representation or warranty to Medical Center concerning the
Upgrade and First Reload and/or the Second Reload (if applicable), and GKF shall
have no obligation or liability to pay any damages to Medical Center resulting
therefrom.

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     “15.5 All references in this Agreement to (a) “Installation” shall be deemed to
refer to the Upgrade and First Reload and the Second Reload, as applicable; and (b)
“Equipment” shall be deemed, immediately following its upgrade, to mean the
Perfexion Model.”

     4. Per Procedure Payment.

          a. Notwithstanding the provisions of Section 7 of the Lease, commencing from and after the
first day of the first month after installation of the Perfexion Model, the per procedure payment
set forth in Section 7 of the Lease shall be amended to equal * per procedure, and no further
adjustment to such per procedure payment shall be made based on the number of procedures performed
during any year or other time period under the Lease. As used in the Lease, the term “procedure”
shall mean each individual treatment session (fraction), whether performed on an inpatient or
outpatient basis, during which a patient receives treatment, imaging or other procedures,
including, without limitation, treatment planning and delivery, imaging and other ancillary
services, using the Equipment and/or any other equipment or devices that are used in lieu of, or as
an alternative to, the Equipment.

     5. No Responsibility for Additional Upgrades or Reloading. Notwithstanding anything
to the contrary contained herein or in the Lease, it is understood by the parties that GKF is not
responsible for any additional upgrades, hardware, cobalt reloading, software changes and/or other
modifications to the Perfexion Model, except as expressly set forth herein or otherwise agreed upon
in writing by Medical Center and GKF.

     6. Captions. The captions and paragraph headings used herein are for convenience only
and shall not be used in construing or interpreting this Addendum.

     7. Full Force and Effect. Except as amended by this Addendum, all of the terms and
provisions of the Lease shall remain in full force and effect.

     IN WITNESS WHEREOF, the parties have executed this Addendum effective as of the date first
written above.

	 	 	 	 	 	 	 	 	 	 	 
	GK FINANCING, LLC	 	 	 	OSF HEALTHCARE SYSTEM, owner and

operator of Saint Francis Medical Center	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By: 

Name:

	 	/s/ Ernest A. Bates, M.D.
 

Ernest A. Bates, M.D.
	 	 	 	By:

Name:
	 	/s/ John Moore
 

John Moore
	 	 
	Title:

	 	GKF Policy Committee Member
	 	 	 	Title:
	 	Chief Executive Officer	 	 

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