**Exhibit 10.17**REGISTRATION RIGHTS AGREEMENT     THIS REGISTRATION RIGHTS AGREEMENT dated as of June 11, 2007 by and among DIGITAL RECORDERS,INC., a North Carolina corporation (the “Company”) and                                          (the “Holder”).     The parties agree as follows:     Section 1. Definitions. For purposes of this Agreement:     (a) “Series J Convertible Preferred Stock” means the Company’s Series J ConvertiblePreferred Stock with a liquidating value of $5,000 per share;     (b) “Registrable Securities” means ___ shares of Series J Convertible PreferredStock to be issued to the Holder upon closing of that certain Stock Purchase Agreement ofeven date (the “Agreement”; certain terms not defined herein but used herein are used asdefined in the Agreement);     (c) “register” and “registration” refer to a registration of the RegistrableSecurities effected by filing a registration statement or similar document pursuant to theSecurities Act of 1933, as amended (the “Act”) and the declaring or ordering ofeffectiveness of such registration statement; and     (d) The “Company” means Digital Recorders, Inc., a North Carolina corporation.Section 2. Demand Registration.     (a) If at any time the Company receives a written request from the Holder that theCompany file a registration statement under the Act covering the registration of RegistrableSecurities held by him, then the Company shall, subject to the limitations of this Section2, use its best efforts to, within six months of the date of such request, effect theregistration under the Act of all Registrable Securities and will keep such registrationstatement effective for a minimum period of six (6) months thereafter. The Company shall beobligated
 

 
to effect only one (1) registration pursuant to this Section 2(a).     (b) If the Holder intends to distribute the Registrable Securities covered by hisrequest by means of an underwriting, he shall so advise the Company as a part of his requestmade pursuant to this Section 2. The Holder shall (together with the Company as provided inSection 3) enter into an underwriting agreement in customary form with a mutually acceptableunderwriter or underwriters.     Section 3. “Piggyback” Rights. For a period of one (1) year from June 11, 2007, andif (but without any obligation to do so) the Company proposes to register any of its securitiesunder the Act in connection with a public offering of such common stock for cash proceeds payablein whole or in part to the Company (other than with respect to a Registration Statement filed onForm S-8 or Form S-4 or such other similar form then in effect under the Securities Act), theCompany shall, at such time, subject to the provisions of Section 6 and 7 hereof and upon requestof the Holder cause to be registered under the Act all of the Registrable Securities which theHolder requests be registered; provided, however, if the managing underwriter of the publicoffering of shares proposed to be registered by the Company advises the Holder in writing thatmarketing factors require a limitation of the number of shares to be underwritten, then the numberof shares of Registrable Securities of the Holder that may be included in the underwriting shall beso limited prorata. Such “piggyback rights” shall expire on the registration and sale of theRegistrable Securities pursuant to Section 2 above or upon the sale of the Registrable Securitieshereunder.     Section 4. Registration Procedure. Whenever required under this Agreement to effectthe registration of any Registrable Securities, the Company shall, as expeditiously as isreasonably possible:     (a) Furnish to the Holder of the Registrable Securities covered by such registrationstatement such number of copies of a prospectus, including a preliminary prospectus, inconformity with the requirements of the Act, and such other documents as he may reasonablyrequest in order to facilitate the disposition of the Registrable Securities owned by him.
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     (b) In the event of any underwritten public offering, enter into and perform itsobligations under an underwriting agreement, in usual and customary form, with the managingunderwriter of such offering. The Holder participating in such underwriting shall alsoenter into and perform his obligations under such agreement.     (c) Notify the Holder of Registrable Securities covered by such registrationstatement, at any time when a prospectus relating thereto covered by such registrationstatement is required to be delivered under the Act, of the happening of any event as aresult of which the prospectus included in such registration statement, as then in effect,includes an untrue statement of a material fact or omits to state a material fact requiredto be stated therein or necessary to make the statements therein not misleading in the lightof the circumstances then existing.     Section 5. Furnish Information. The Holder shall promptly furnish to the Company inwriting such reasonable information regarding the Holder, the Registrable Securities held by theHolder, and the intended method of disposition of such securities as shall be required to effectthe registration of his Registrable Securities.     Section 6. Expenses of Registration. All of the foregoing expenses relating to theRegistrable Securities incurred in connection with registration, filing or qualification pursuantto this Agreement, including (without limitation) all registration, filing and qualification fees,printers’ bills, mailing and delivery expenses, accounting fees, and the fees and disbursements ofcounsel for the Company, but excluding underwriting discounts or fees, shall be borne by theCompany.     Section 7. Indemnification and Contribution. In the event any Registrable Securitiesare included in a registration statement under this Agreement:     (a) To the extent permitted by law, the Company will indemnify and hold harmless theHolder, the officers and directors of each Holder, any underwriter (as defined in the Act)for such holder, and each person, if any, who controls such Holder or underwriter within themeaning of the Act or the Securities Exchange Act of 1934 (the “Exchange Act”), against anylosses, claims, damages, or liabilities (joint or several) to which they may become subjectunder the Act, the Exchange Act or other federal or
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state law, insofar as such losses, claims, damages, or liabilities (or actions in respectthereto) arise out of or are based upon any untrue statement or alleged untrue statement ofa material fact contained in such registration statement, including any preliminaryprospectus or final prospectus contained therein or any amendments or supplements thereto,or arise out of or are based upon the omission or alleged omission to state therein amaterial fact required to be stated therein or necessary to make the statements therein notmisleading; and the Company will reimburse each such Holder, officer or director,underwriter or controlling person for any legal or other expenses reasonably incurred bythem in connection with investigating or defending any such loss, claim, damage, liability,or action; provided however, that the indemnity agreement contained in this Section 7(a)shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, oraction if such settlement is effected without the consent of the Company (which consentshall not be unreasonably withheld), nor shall the Company be liable in any such case forany such loss, claim, damage, liability, or action to the extent that it arises out of or isbased upon an untrue statement or alleged untrue statement or omission or alleged omissionmade in such registration statement, preliminary prospectus or final prospectus or anyamendment or supplement thereto in reliance upon and in conformity with written informationfurnished expressly for use in connection with such registration by any such Holder,underwriter or controlling person; provided, further, however, that if any losses, claims,damages or liabilities arise out of or are based upon any untrue statement, alleged untruestatement, omission or alleged omission contained in any preliminary prospectus, and made inreliance upon and in conformity with written information furnished by such Holder expresslyfor use therein, which did not appear in the final prospectus, the Company shall not haveany such liability with respect thereto to such Holder, any person who controls such Holderwithin the meaning of the Act, or any director of such Holder, if such Holder delivered acopy of the preliminary prospectus to the person alleging such losses, claims, damages orliabilities and failed to deliver a copy of the final prospectus, as amended or supplementedif it has been amended or supplemented, to such person at or prior to the writtenconfirmation of the sale to such person, provided that such Holder had an obligation todeliver a copy of the final prospectus to such person.
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     (b) To the extent permitted by law, each selling Holder will indemnify and holdharmless the Company, each of its directors, each of its officers who has signed theregistration statement, each person, if any, who controls the Company within the meaning ofthe Act, any underwriter and any other Holder selling securities in such registrationstatement or any of its directors or officers or any person who controls such Holder orunderwriter against any losses, claims, damages or liabilities, joint or several) to whichthe Company or any such director, officers, controlling person, or underwriter orcontrolling person, or other such Holder or director, officer or controlling person maybecome subject, under the Act, the Exchange Act or other federal or state law, insofar assuch losses, claims, damages or liabilities (or actions in respect thereto) arise out of orare based upon any untrue statement or alleged untrue statement of a material fact containedin such registration statement, including any preliminary prospectus or final prospectuscontained therein or any amendments or supplements thereto, or arise out of or are basedupon the omission or alleged omission to state therein a material fact required to be statedtherein or necessary to make the statements therein not misleading, if the untrue statementor omission or alleged untrue statement or omission in respect of which such loss, claim,damage or liability is asserted was made in reliance upon and in conformity with writteninformation furnished by such Holder expressly for use in connection with such registration;and each such Holder will reimburse any legal or other expenses reasonably incurred by theCompany or any such director, officer, controlling person, underwriter or controllingperson, or other Holder, officer, director, or controlling person in connection withinvestigating or defending any such loss, claim, damage, liability or action; providedhowever, that the indemnity agreement contained in this Section 7(b) shall not apply toamounts paid in settlement of any such loss, claim, damage, liability or action, if suchsettlement is effected without the consent of the Holder (which consent shall not beunreasonably withheld); provided, further that the maximum liability of any selling Holderunder this Section 7(b) in regard to any registration statement shall in no event exceed theamount of the proceeds received by such selling Holder from the sale of securities undersuch registration statement; provided, further however, that if any losses, claims, damagesor liabilities arise out of or are based
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upon an untrue statement, alleged untrue statement, omission or alleged omission containedin any preliminary prospectus which did not appear in the final prospectus, such sellershall not have any such liability with respect thereto to the Company, any person whocontrols the Company within the meaning of the Act, any officer of the Company who signedthe registration statement or any director of the Company, if the Company delivered a copyof the preliminary prospectus to the person alleging such losses, claims, damages orliabilities and failed to deliver a copy of the final prospectus, as amended or supplementedif it has been amended or supplemented, to such person at or prior to the writtenconfirmation of the sale to such person, provided that the Company had an obligation todeliver a copy of the final prospectus to such person.     (c) Promptly after receipt by an indemnified party under this Section 7 of notice ofthe commencement of any action (including any governmental action), such indemnified partywill, if a claim in respect thereof is to be made against any indemnifying party under thisSection 7, deliver to the indemnifying party a written notice of the commencement thereof,and the indemnifying party shall have the right to participate in and, to the extent theindemnifying party so desires, jointly with any other indemnifying party similarly notified,to assume the defense thereof with counsel mutually satisfactory to the parties. Anindemnified party shall have the right to retain its own counsel, however, the fees andexpenses of such counsel shall be at the expense of the indemnified party, unless (i) theemployment of such counsel has been specifically authorized in writing by the indemnifyingparty, (ii) the indemnifying party has failed to assume the defense and employ counsel, or(iii) the named parties to any such action (including any impleaded parties) include boththe indemnified party and the indemnifying party, and the indemnified party shall have beenadvised by such counsel that there may be one or more legal defenses available to it whichare different from or additional to those available to the indemnifying party (in which casethe indemnifying party shall not have the right to assume the defense of such action onbehalf of such indemnified parry, it being understood, however, that the indemnifying partyshall not, in connection with any one such action or separate but substantially similar orrelated actions in the same jurisdiction arising out of the same general allegations orcircumstances, be liable for the reasonable
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fees and expenses of more than one separate firm of attorneys for all indemnified parties).The failure to deliver written notice to the indemnifying party will not relieve it of anyliability that it may have to any indemnified party under this Agreement.     (d) If the indemnification provided for in this Section 7 is unavailable orinsufficient to hold harmless an indemnified party in respect of any losses, claims, damagesor liabilities or actions in respect thereof referred to therein, then each indemnifyingparty shall in lieu of; indemnifying such indemnified party contribute to the amount paid orpayable by such indemnified party as a result of such losses, claims, damages, liabilitiesor actions in such proportion as is appropriate to reflect the relative fault of theCompany, on the one hand, and selling Holder, on the other, in connection with thestatements or omissions which resulted in such losses, claims, damages, liabilities oractions as well as any other relevant equitable considerations, including the failure togive any required notice. The relative fault shall be determined by reference to, amongother things, whether the untrue or alleged untrue statement of a material fact or theomission or alleged omission to state a material fact relates to information supplied by theCompany, on the one hand, or by such selling Holder on the other, and the parties’ relativeintent, knowledge, access to information and opportunity to correct or prevent suchstatement or omission. The parties hereto acknowledge and agree that it would not be justand equitable if contribution pursuant to this subparagraph (d) were determined by prorataallocation (even if all of the selling Holder were treated as one entity for such purpose)or by any other method of allocation which does not take account of the equitableconsiderations referred to above in this subparagraph (d). The amount paid or payable by anindemnified party as a result of the losses, claims, damages, liabilities or actions inrespect thereof referred to above in this subparagraph (d) shall be deemed to include anylegal or other expenses reasonably incurred by such indemnified party in connection withinvestigating or defending any such action or claim. Notwithstanding the provisions of thissubparagraph (d), the amount the selling Holder shall be required to contribute shall notexceed the amount, if any, by which the total price at which the securities sold by each ofthem were offered to the public exceeds the amount of any damages which they would haveotherwise been required to pay by reason of such untrue or
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alleged untrue statement or omission or alleged omission, or other violation of law. Noperson guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of theAct) shall be entitled to contribution from any person who was not guilty of fraudulent misrepresentation.Section 8. Miscellaneous.     (a) Binding Effect. This Agreement shall be binding upon and shall inure tothe benefit of the Company and to the Holder and their respective heirs, personalrepresentatives, successors and assigns.     (b) Notices. Except as otherwise provided herein, any notice, consent orrequest to be given in connection with any term or provision of this Agreement shall bedeemed to have been given sufficiently if sent by hand, registered or certified mail,postage prepaid, facsimile transmission or courier (next day delivery), to the Company or tothe Holder at their respective addresses as provided on or about the date hereof.     (c) Integration. This Agreement contains the entire agreement between theparties with respect to the transactions contemplated hereby and no party shall be bound by,nor shall any party be deemed to have made, any covenants, representations, warrantiesundertakings or agreements except those contained in such entire Agreement. The section andparagraph headings contained in this Agreement are for the reference purposes only and shallnot affect in any way the meaning or interpretation of this Agreement.     (d) Counterparts. This Agreement may be executed in one or more counterparts,each of which shall be deemed to be an original, but all of which together shall constituteone and the same agreement.     (e) Amendment. This Agreement may be amended, changed, waived or terminatedonly in writing signed by each of the parties.REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
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     IN WITNESS WHEREOF, this Agreement has been executed effective as of the date first abovewritten.         DIGITAL RECORDERS, INC.           By                  President           HOLDER:        (SEAL)    
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