exv4w10






Exhibit 4.10




FIRST AMENDMENT TO

WARRANT 




     FIRST AMENDMENT dated as of March 26, 2009 (this “Amendment”), between DRI
CORPORATION, a North Carolina corporation (“DRI”) and BHC INTERIM FUNDING III, L.P.
(“Holder”) to that certain Warrant dated as of June 30, 2008 issued by DRI to Holder (as
amended, modified, supplemented or restated from time to time, the “Warrant”).



     WHEREAS, DRI issued the Warrant to Holder, in connection with that certain Loan and Security
Agreement dated as of June 30, 2008, among DRI, Digital Recorders Inc., a North Carolina
corporation, TwinVision of North America, Inc., a North Carolina corporation, and Holder, as lender
(as amended, restated, supplemented or otherwise modified from time to time, the “Loan
Agreement”). Capitalized terms used without further definition herein shall have the respective
meanings set forth in the Loan Agreement and the Loan Documents;



     WHEREAS, in consideration of and as a condition precedent to that certain Second Amendment to
the Loan and Security Agreement dated as of the date hereof, DRI and Holder have agreed to amend
the Warrant on the terms and subject to satisfaction of the conditions contained herein.



     NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, DRI and Holder hereby
agree as follows:



     Section 1. Amendment to Warrant.



          (a) Paragraph (A). Paragraph (A) of the Warrant is hereby deleted in its entirety and
the following is hereby substituted therefor:





     THIS IS TO CERTIFY THAT, for value received, BHC INTERIM FUNDING III, L.P., a
Delaware limited partnership, or its registered assigns (the “Holder”) is
entitled to purchase from DRI CORPORATION, a North Carolina corporation (the
“Company”), at any time on or after the date hereof and before 5:00 p.m.
(New York time) on June 30, 2013, (i) Two Hundred Thousand (200,000) fully paid and
non-assessable shares of the Company’s common stock, $0.10 par value per share (the
“A Common Stock”) at a price (the “A Exercise Price”) equal to $1.00
per share, and (ii) One Hundred Fifty Thousand (150,000) fully paid and
non-assessable shares of the Company’s common stock, $0.10 par value per share (the
“B Common Stock” and, together with the A Common Stock, the “Common
Stock”) at a price (the “B Exercise Price” and, together with the A
Exercise Price, the “Exercise Price”) equal to $2.99 per share, payable as
provided below and subject to adjustment pursuant to Article III hereof. The shares
of Common Stock issuable upon exercise of this Warrant are herein called the
“Warrant Shares.”



 









 





          (b) Section 1.1. Method of Exercise. Section 1.1 is amended by deleting the
first paragraph and the following is hereby substituted therefor:





     To exercise this Warrant in whole or in part, the Holder shall deliver on any
Business Day to the Company at its principal place of business (a) this Warrant, (b)
a written notice in substantially the form of the Subscription Notice attached
hereto, of the Holder’s election to exercise this Warrant, which notice shall
specify (i) the number of Warrant Shares to be purchased (which shall be a whole
number of shares in an amount not less than 50,000 shares if such exercise is for
less than all the Warrant Shares then issuable hereunder) and (ii) whether the
Holder is purchasing A Common Stock or B Common Stock, and (c) payment of the
Exercise Price with respect to such Warrant Shares. Such payment may be made, at
the option of the Holder, either (x) by cash, certified or bank cashier’s check or
wire transfer in an amount equal to the product of the applicable Exercise Price
times the number of applicable Warrant Shares as to which this Warrant is being
exercised or (y) by a “cashless exercise” of this Warrant, in which event the Holder
shall receive from the Company the number of applicable Warrant Shares equal to the
number of applicable Warrant Shares as to which this Warrant is being exercised
minus the number of such Warrant Shares having an aggregate value (determined by
reference to the Fair Market Value of a share of Common Stock on the Business Day
immediately prior to the date of such exercise), equal to the product of the
applicable Exercise Price times the number of such Warrant Shares as to which this
Warrant is being exercised.



          (c) Article V. The following new defined terms are added to Article V of the Warrant
in appropriate alphabetical order:





“A Common Stock” has the meaning set forth in paragraph (A) of this Warrant.




“A Exercise Price” has the meaning set forth in paragraph (A) of this
Warrant.




“B Common Stock” has the meaning set forth in paragraph (A) of this Warrant.




“B Exercise Price” has the meaning set forth in paragraph (A) of this
Warrant.



     Section 2. Representations and Warranties by DRI. DRI warrants and represents to
Holder that:



          (a) all of the representations and warranties contained in the Warrant and each other Loan
Document to which DRI is a party continue to be true and correct in all material respects as of the
date hereof, as if repeated as of the date hereof, except for such representations and warranties
which, by their terms, are expressly made only as of a previous date;




          (b) the execution, delivery and performance of this Amendment by DRI is within its corporate
powers, has been duly authorized by all necessary corporate action on its part, and DRI has
received all necessary consents and approvals (if any are required) for the execution and delivery
of this Amendment;




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          (c) the Organizational Documents of DRI previously delivered to Holder by DRI have not been
amended or modified in any respect as of the date hereof;




          (d) upon its execution, the Warrant as amended by this Amendment shall constitute the legal,
valid and binding obligation of DRI, enforceable against DRI in accordance with their terms as so
amended, except as such enforceability may be limited by (i) bankruptcy, insolvency or similar laws
affecting creditors’ rights generally and (ii) general principles of equity;




          (e) except as set forth herein or as DRI or its representatives shall have notified Holder of
in writing, DRI is not in default under any indenture, mortgage, deed of trust, or other material
agreement or material instrument to which it is a party or by which it may be bound which could
have a Material Adverse Effect. Neither the execution and delivery of this Amendment, nor the
consummation of the transactions herein contemplated, nor compliance with the provisions hereof
will (i) violate any law or regulation applicable to DRI, (ii) cause a violation by DRI of any
order or decree of any court or government instrumentality applicable to them, (iii) conflict with,
or result in the breach of, or constitute a default under, any indenture, mortgage, deed of trust,
or other material agreement or material instrument to which DRI is a party or by which it may be
bound, or (iv) result in the creation or imposition of any lien, charge, or encumbrance upon any
property of DRI, except in favor of Holder, to secure the Obligations.




          (f) no Default or Event of Default has occurred and is continuing; and




          (g) since the date of the Loan Parties’ most recent financial statements delivered to Holder,
no change or event has occurred which has had, or is reasonably likely to have, a Material Adverse
Effect.




          (h) This Amendment and any assignment or other instrument, document or agreement executed and
delivered in connection herewith, will be valid, binding and enforceable in accordance with their
respective terms.




     Section 3. Miscellaneous.



          (a) Notwithstanding anything to the contrary contained in Section 3.3 of the Warrant as
amended hereby, the reduction of the Exercise Price with respect to the A Common Stock shall not be
construed as a Dilutive Issuance, and except as otherwise set forth herein, shall not result in an
adjustment to the Exercise Price.




          (b) The provisions of this Amendment are to be deemed severable, and the invalidity or
unenforceability of any provision shall not affect or impair the remaining provisions which shall
continue in full force and effect.




          (c) This Amendment may be executed in any number of counterparts, each of which when so
executed shall be deemed to be an original, and such counterparts together shall constitute one and
the same respective agreement. Signature by facsimile shall also bind the parties hereto.




          (d) This Amendment is a Loan Document.




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          (e) The headings of this Amendment are for the purposes of reference only and shall not affect
the construction of this Amendment.




          (f) THIS AMENDMENT AND ALL MATTERS RELATING HERETO AND ARISING HEREFROM (WHETHER ARISING UNDER
CONTRACT LAW, TORT LAW OR OTHERWISE) SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES.




          (g) DRI FOR ITSELF AND ON BEHALF OF ITS SUBSIDIARIES HEREBY CONSENTS TO THE JURISDICTION OF
ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF NEW YORK, STATE OF NEW YORK, AND
IRREVOCABLY AGREES THAT, SUBJECT TO HOLDER’S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AMENDMENT SHALL BE LITIGATED IN SUCH COURTS. DRI FOR ITSELF AND ON BEHALF OF ITS
SUBSIDIARIES ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN
CONNECTION WITH THIS AMENDMENT. DRI FOR ITSELF AND ON BEHALF OF ITS SUBSIDIARIES HEREBY WAIVES
PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE
UPON SUCH PERSON BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO SUCH PERSON
AT SUCH PERSON’S ADDRESS AS SET FORTH IN SECTION 8.6 OF THE LOAN AGREEMENT OR AS MOST
RECENTLY NOTIFIED BY SUCH PERSON IN WRITING PURSUANT TO SECTION 8.6 OF THE LOAN AGREEMENT
AND SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED AS AFORESAID.




          (h) DRI FOR ITSELF AND ON BEHALF OF ITS SUBSIDIARIES AND HOLDER HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AMENDMENT.
DRI FOR ITSELF AND ON BEHALF OF ITS SUBSIDIARIES AND HOLDER FURTHER WARRANT AND REPRESENT THAT
EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.




[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]




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     Dated the date and year first written above.



	 	 	 	 	 
	 	DRI CORPORATION

 	 
	 	By:  	/s/ DAVID L. TURNEY
 	 
	 	Name:  	David L. Turney 	 
	 	Title:  	CEO, President 	 
	 



Accepted as of the day and

year first above written:




	 	 	 
	BHC INTERIM FUNDING III, L.P.
	 
	 	 
	By:

	 	BHC Interim Funding Management III, L.P.,

its General Partner
	By:

	 	BHC Investors III, L.L.C.,

its Managing Member
	By:

	 	GHH Holdings III, L.L.C.






	 	 	 	 	 
	By:

	 	/s/ GERALD H. HOUGHTON
 
	 	 
	Name:

	 	Gerald H. Houghton	 	 
	Title:

	 	Managing Member	 	 






Signature Page to First Amendment to Warrant