(i) by adding the following new defined terms in their appropriate alphabetical order:     “Demore Shares” means 50% of the issued and outstanding quotas heldprior to the completion of the Transactions, by Roberto Juventino Demore and LorenaGiusti Demore in Mobitec Brazil.     “DRI Europa German Pledge” means that certain Share Pledge Agreement,dated as of August 22, 2008, made by DRI Europa in favor of Lender, as the same maybe amended, restated, supplemented or otherwise modified or extended or renewed fromtime to time.     “DRI Europa Swedish Pledge” means that certain Pledge Agreement, datedas of August 19, 2008, made by DRI Europa in favor of Lender, as the same may beamended, restated, supplemented or otherwise modified or extended or renewed fromtime to time     “DRI Pledge” means that certain Stock Pledge Agreement, dated as ofJune 30, 2008, made by Parent in favor of Lender, as the same may be amended,restated, supplemented or otherwise modified or extended or renewed from time totime.     “Memorandum” that certain Memorandum from Barbosa, Mussnich & Aragao,dated as of July 14, 2009.     “Mobitec AB Shares” means the 1,944,825 quotas of Mobitec Brazil,representing 50% of the issued and outstanding quotas of Mobitec Brazil owned byMobitec AB prior to the completion of the Transactions.     “Mobitec Par” means Mobitec Empreendimentos e Participações Ltda., alimited liability company organized under the laws of Brazil.     “Mobitec Par Pledge” means that certain Quota Pledge Agreement, datedas of July 22, 2009, made by Mobitec Par in favor of Lender, as the same may beamended, restated, supplemented or otherwise modified or extended or renewed fromtime to time.     “Mobitec AB Pledge” means that certain Quota Pledge Agreement, dated asof August 19, 2008, made by Mobitec AB in favor of Lender, as the same may beamended, restated, supplemented or otherwise modified or extended or renewed fromtime to time.     “Quota Purchase Agreement” means that certain Quota Purchase Agreementdated on or about July 22, 2009, among Mobitec AB, Roberto Juventino Demore andLorena Giusti Demore, relating to the purchase by Mobitec Par of the Demore Shares,as the same may be amended, restated, supplemented or otherwise modified or extendedor renewed from time to time.
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     “Third Amendment” means that certain Third Amendment to the Loan andSecurity Agreement, dated as of August 7, 2009, among the Loan Parties and theLender, as the same may be amended, restated, supplemented or otherwise modified orextended or renewed from time to time.     “Third Amendment Effective Date” has the meaning set forth in the ThirdAmendment.     “Transactions” means those certain transactions described in theMemorandum and Quota Purchase Agreement, including, but not limited to, thecontribution by Mobitec AB of the Mobitec AB Shares to Mobitec Par, the purchase ofthe Demore Shares by Mobitec Par and the merger of Mobitec Par with and into MobitecBrazil.          (ii) deleting the defined terms “Change of Control”, “Pledgor” and “Pledge Agreement”and inserting the following in lieu thereof:     “Change of Control” means any of the following: (a) the failure ofDavid Turney to remain actively engaged in the management of Borrowers or Parent andto hold the positions held on the Closing Date, including as an officer anddirector; (b) any Person or “group” (within the meaning of Rules 13d-3 and 13d-5under the Exchange Act), shall have acquired beneficial ownership of 20% or more ona fully diluted basis of the voting and/or economic interest in Parent’s CapitalStock, (b) the Board of Parent shall cease to consist of a majority of ContinuingDirectors, (c) other than as permitted by Section 6.5, any merger orconsolidation of or with any Loan Party or sale of all or substantially all of theproperty or assets of any Loan Party or (d) Parent ceases to own (i) 100% of theCapital Stock of either Borrower, (ii) directly or indirectly, 100% of any ForeignSubsidiary (other than Cast Master Mobitec), or (iii) at least 51% of Cast MasterMobitec.     “Pledgor” means, collectively, Parent, DRI Europa, Mobitec AB, MobitecPar and each other Person who shall from time to time hereafter become a party tothe Pledge Agreement, and shall extend to all heirs, estates, successors andpermitted assigns (in each case as applicable) of each such Person.     “Pledge Agreement” means that certain DRI Europa German Pledge, DRIEuropa Swedish Pledge, DRI Pledge, Mobitec Par Pledge, Mobitec AB Pledge, and anyother collateral pledge agreement executed by the Pledgor in favor of Lender, as thesame may be amended, restated, supplemented or otherwise modified or extended orrenewed from time to time.     (b) **Section 6.1****.****Indebtedness and Liabilities**. Section 6.1 of theLoan Agreement is deleted in its entirety and the following is inserted in lieu thereof:     Indebtedness and Liabilities. No Loan Party shall, norshall it permit any Subsidiary to, directly or indirectly create,incur,
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assume, guaranty, or otherwise become or remain directly orindirectly liable, on a fixed or contingent basis, with respect toany Indebtedness except: (i) the Indebtedness to Lender; (ii) (A)Indebtedness incurred for Capital Expenditures permitted underSection 6.18(E) hereof and (B) Indebtedness represented bythe promissory note permitted by Section 6.18(A)(i).; (iii)Indebtedness under the Senior Lien Financing Documents; (iv)Indebtedness which consists of loans permitted by Section6.16(b) or (c), (v) Indebtedness set forth onSchedule 4.4 and any refinancing, refunding or extensionthereof, provided that in connection with any suchrefinancing, refunding or extension: (x) the aggregate principalamount of such Indebtedness is not increased, (y) the scheduledmaturity date of such Indebtedness is not shortened, and (z) thecovenants or defaults are not materially more restrictive or moreonerous than analogous provisions in the documentation of suchIndebtedness as in effect on the date hereof; (vi) Indebtednessconsisting of loans by any Foreign Subsidiary of Parent to any LoanParty, so long as such Indebtedness is subordinated to theObligations on a basis satisfactory to Lender; (vii) trade payablesand normal accruals in the ordinary course of business not yet dueand payable or with respect to which are being Properly Contested;(viii) Subordinated Debt (including any subordinated shareholderdebt) to which Lender has consented and which is subject to asubordination agreement in favor of and acceptable to Lender all inaccordance with the requirements of the definition of SubordinatedDebt; (ix) any Indebtedness consisting of guaranty obligationspermitted by Section 6.2; (x) unsecured or, to the extentSenior Lien Lender is the counterparty, secured Indebtedness of LoanParties under any Hedging Agreements, but only to the extent anysuch Hedging Agreements are entered into by Loan Parties to protectagainst the risks of interest rate fluctuations affectingIndebtedness permitted hereunder or to protect against the risks ofcurrency or commodity fluctuations in connection with the ordinarybusiness operations of Loan Parties in the ordinary course of theirrespective businesses and not for speculative or investmentpurposes; and (xi) Indebtedness incurred in connection with theissuance of letters of credit, surety bonds (other than bondsrelated to judgments or litigation), performance bonds and otherobligations of a like nature incurred in the normal course ofbusiness.     (c) **Section 6.2****.****Guaranties****.**Section 6.2 of the Loan Agreement isdeleted in its entirety and the following is inserted in lieu thereof:     Guaranties. No Loan Party shall, nor shall it permitany Subsidiary to, become liable upon the obligations or liabilitiesof any Person by assumption, endorsement or guaranty thereof or
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otherwise (other than to Lender) except (a) as set forth onSchedule 6.2, (b) guarantees made in the Ordinary Course ofBusiness up to an aggregate amount of Two Hundred Fifty ThousandDollars ($250,000), (c) the endorsement of checks in the OrdinaryCourse of Business, and (d) guarantees in an aggregate amount not toexceed 2,000,000 Brazilian Reais made by Mobitec Brazil or MobitecPar for the purposes of asset-based working capital and capitallease financing of Mobitec Brazil.     (d) **Section 6.4****.****Restricted Payments****.**Section 6.4 of the LoanAgreement is deleted in its entirety and the following is inserted in lieu thereof:     Restricted Payments. No Loan Party shall, nor shall itpermit any Subsidiary to, declare, pay or make any dividend ordistribution on any shares of the common stock or preferred stock ofany Loan Party (other than dividends or distributions payable in itsstock, or split-ups or reclassifications of its stock and, withrespect to preferred stock, dividends that are capitalized,compounded and added to the preference amount of the preferredstock) or apply any of its funds, property or assets to thepurchase, redemption or other retirement of any common stock orpreferred stock, or of any options to purchase or acquire any suchshares of common stock or preferred stock of any Loan Party;provided that (A) Borrowers shall be permitted to makedividends or distributions to Parent, to enable Parent to pay (i)professional fees, franchise and other taxes and other OrdinaryCourse of Business operating expenses incurred by Parent and (ii) upto $150,000 in the aggregate in any Fiscal Year of dividends ordistributions with respect to Parent’s preferred stock, so long asafter giving effect to the payment of such dividend or distributionthe Borrowers have at least $750,000 of undrawn availability (asdefined in the Senior Lien Financing Documents); provided,however, that after giving effect to the payment of suchdividends or distributions there shall not exist any Default orEvent of Default, and (B) Mobitec Par shall be permitted to purchasethe Demore Shares as part of the Transactions and as set forth inthe Quota Purchase Agreement.     (e) **Section 6.5****.****Restriction on Fundamental Changes****.**Section 6.5 ofthe Loan Agreement is deleted in its entirety and the following is inserted in lieu thereof:     Restriction on Fundamental Changes. No Loan Partyshall, nor shall it permit any Subsidiary to, enter into any merger,consolidation or other reorganization with or into any other Personor acquire all or a substantial portion of the assets or CapitalStock of any Person or permit any other Person to consolidate withor merge with it; provided that the Borrowers shall bepermitted to
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merge or consolidate into each other; and provided,further, that in order to consummate the Transactions (A)Mobitec AB shall be permitted to (i) acquire Mobitec Par for thepurpose of acquiring the Demore Shares, and (ii) contribute theMobitec AB Shares to Mobitec Par and (B) Mobitec Par shall bepermitted to merge with and into Mobitec Brazil, so long as MobitecBrazil is the successor company to such merger.     (f) **Section 6.14****.****Organizational Documents****.**Section 6.14 of the LoanAgreement is deleted in its entirety and the following is inserted in lieu thereof:     Organizational Documents. No Loan Party shall, nor shall itpermit any Subsidiary to, amend, modify or waive any term or materialprovision of its Organization Documents or any certificate of designationunless required by law; provided, that, in order toconsummate the Transactions, (i) Mobitec Brazil may change itsOrganizational Documents in connection with the contribution of the MobitecAB Shares to Mobitec Par and related changes to the Mobitec AB Pledge, and(ii) each of Mobitec Brazil and Mobitec Par may change its OrganizationalDocuments solely in connection with the merger of Mobitec Par with and intoMobitec Brazil, so long as Mobitec Brazil is the successor company to suchmerger.     (g) **Section 6.16****.****Advances, Loans or Investments****.**Section 6.16 ofthe Loan Agreement is deleted in its entirety and the following is inserted in lieu thereof:     Advances, Loans or Investments. No Loan Party shall, nor shallit permit any Subsidiary to (i) purchase or acquire obligations or CapitalStock of, or any other interest in, any Person, except for those PermittedInvestments listed on Schedule 6.16 and as otherwise expresslypermitted hereunder, including but not limited to, (y) the purchase byMobitec Par of the Capital Stock of Mobitec Brazil as contemplated by theQuota Purchase Agreement, and (z) the contribution by Mobitec AB of theCapital Stock held by Mobitec AB in Mobitec Brazil to Mobitec Par, in eachcase, in connection with the consummation of the Transactions; or (ii) makeadvances, loans or extensions of credit to any Person, including anySubsidiary or Affiliate, except with respect to (a) the extension ofcommercial trade credit in connection with the sale of Inventory in theOrdinary Course of Business, (b) the Mobitec Loan, (c) so long as no Defaultor Event of Default has occurred and is continuing or would resulttherefrom, loans by any Loan Party to another Loan Party (other than Parent)and (d) loans or extensions of credit by the Borrowers or Parent to ForeignSubsidiaries of Parent (inclusive of (i) amounts utilized for the Mobitec ABLoan Repayment and (ii) any and all expenses incurred by a Loan Party andallocated to the Foreign Subsidiaries of Parent for purposes of calculatingthe net income of the Loan Parties on a consolidated basis, unless such LoanParty has been reimbursed in cash for
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such allocated expenses), so long as (x) no Default or Event of Defaulthas occurred and is continuing or would result therefrom, (y) Borrowers haveat least $750,000 of Undrawn Availability (as defined in the Senior LienFinancing Documents) after giving effect to such loan or extension of creditand (z) the aggregate amount of such loans and extensions of credit byBorrowers to Foreign Subsidiaries do not exceed $1,000,000 in the aggregateat any time outstanding.     (h) **Section 6.18(A)****.****Aggregate Indebtedness****.**Section 6.18(A) of theLoan Agreement is hereby amended by deleting “$1,500,000” from clause (i) of the second proviso,and inserting in lieu thereof “$1,950,000”.     **Section Two.****Representations and Warranties**. To induce Lender to enter into thisAmendment, the Loan Parties hereby warrant and represent to Lender as follows:     (a) all of the representations and warranties contained in the Loan Agreement and each otherLoan Document to which the Loan Parties are a party continue to be true and correct in all materialrespects as of the date hereof, as if repeated as of the date hereof, except for suchrepresentations and warranties which, by their terms, are expressly made only as of a previousdate;     (b) the execution, delivery and performance of this Amendment by each of the Loan Parties iswithin their corporate powers, has been duly authorized by all necessary corporate action on theirpart, and each of the Loan Parties has received all necessary consents and approvals (if any arerequired) for the execution and delivery of this Amendment;     (c) the Organizational Documents of Borrowers and Guarantor previously delivered to Lender bythe Loan Parties have not been amended or modified in any respect as of the date hereof;     (d) upon execution of this Amendment, the Loan Agreement as amended by this Amendment shallconstitute the legal, valid and binding obligation of the Loan Parties, enforceable against theLoan Parties in accordance with their terms as so amended, except as such enforceability may belimited 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 the Loan Parties or their representatives shall havenotified Lender of in writing, none of the Loan Parties are in default under any indenture,mortgage, deed of trust, or other material agreement or material instrument to which they are aparty or by which they may be bound which could have a Material Adverse Effect. Neither theexecution and delivery of this Amendment, nor the consummation of the transactions hereincontemplated, nor compliance with the provisions hereof will (i) violate any law or regulationapplicable to any of the Loan Parties, (ii) cause a violation by any of the Loan Parties of anyorder 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 any of the Loan Parties is a party orby which they may be bound, or (iv) result in the creation or imposition of any lien, charge, or
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encumbrance upon any property of any of the Loan Parties, except in favor of Lender, to securethe 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 Lender,no change or event has occurred which has had, or is reasonably likely to have, a Material AdverseEffect.     **Section Three.****Conditions Precedent**. This Amendment shall become effective (the“Third Amendment Effective Date”) upon the satisfaction of the following conditionsprecedent:     (a) Lender shall have received this Amendment, in form and substance satisfactory to Lender,duly executed by the Loan Parties;     (b) Lender shall have received the Quota Purchase Agreement, duly executed by the partiesthereto;     (c) Lender shall have received the first amendment to the Mobitec AB Pledge, in form andsubstance satisfactory to Lender, duly executed by the parties thereto and registered with allnecessary Governmental Authorities;     (d) Lender shall have received the Mobitec Par Pledge, in form and substance satisfactory toLender, duly executed by the parties thereto and registered with all necessary GovernmentalAuthorities;     (e) no Default or Event of Default shall have occurred be continuing, and no event ordevelopment which has had or is reasonably likely to have a Material Adverse Effect shall haveoccurred, in each case, since the date of the Loan Parties’ most recent financial statementsdelivered to Lender.     **Section Four.****Release**. The Loan Parties hereby acknowledge and agree that: (a)neither they nor any of their Affiliates have any claim or cause of action against Lender (or anyof Lender’s Affiliates, officers, directors, employees, attorneys, consultants or agents) and (b)Lender has heretofore properly performed and satisfied in a timely manner all of its obligations tothe Loan Parties under the Loan Agreement and the other Loan Documents. Notwithstanding theforegoing, Lender wishes (and the Loan Parties agree) to eliminate any possibility that any pastconditions, acts, omissions, events or circumstances would impair or otherwise adversely affect anyof Lender’s rights, interests, security and/or remedies under the Loan Agreement and the other LoanDocuments. Accordingly, for and in consideration of the agreements contained in this Amendment andother good and valuable consideration, the Loan Parties (for themselves and their Affiliates andthe successors, assigns, heirs and representatives of each of the foregoing) (each a“Releasor” and collectively, the “Releasors”) does hereby fully, finally,unconditionally and irrevocably release and forever discharge Lender and each of its Affiliates,officers, directors, employees, attorneys, consultants and agents (each a “Released Party”and collectively, the “Released Parties”) from any and all debts, claims, obligations,damages, costs, attorneys’ fees, suits, demands, liabilities, actions, proceedings and causes ofaction, in each case, whether known or unknown, contingent of fixed, direct or indirect, and ofwhatever nature
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or description, and whether in law or in equity, under contract, tort, statute or otherwise,which any Releasor has heretofore had or now or hereafter can, shall or may have against anyReleased Party by reason of any act, omission or thing whatsoever done or omitted to be done on orprior to the date hereof arising out of, connected with or related in any way to this Amendment,the Loan Agreement or any other Loan Document, or any act, event or transaction related orattendant thereto, or Lender’s agreements contained therein, or the possession, use, operation orcontrol of any of the assets of agreements contained therein, or the possession, use, operation orcontrol of any of the assets of the Loan Parties, or the making of any advance, or the managementof such advance or the Collateral.     **Section Five.****General Provisions**.     (a) Except as herein expressly amended, each of the Loan Agreement and all of the other LoanDocuments are ratified and confirmed in all respects and shall remain in full force and effect inaccordance with their respective terms.     (b) All references to the Loan Agreement in the Loan Agreement and each other Loan Documentshall mean such Loan Agreement as amended as of the effective date hereof, and as amended herebyand as hereafter amended, supplemented and modified from time to time.     (c) This Amendment embodies the entire agreement between the parties hereto with respect tothe subject matter hereof and supersedes all prior agreements, commitments, arrangements,negotiations or understandings, whether written or oral, of the parties with respect thereto.     (d) Section and subsection headings in this Amendment are included herein for convenience ofreference only and shall not constitute a part of this Amendment for any other purpose or be givenany substantive effect.     (e) THIS AMENDMENT AND ALL MATTERS RELATING HERETO AND ARISING HEREFROM (WHETHER ARISING UNDERCONTRACT LAW, TORT LAW OR OTHERWISE) SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED INACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWSPRINCIPLES.     (f) EACH LOAN PARTY FOR ITSELF AND ON BEHALF OF ITS SUBSIDIARIES HEREBY CONSENTS TO THEJURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF NEW YORK, STATE OF NEWYORK, AND IRREVOCABLY AGREES THAT, SUBJECT TO LENDER’S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISINGOUT OF OR RELATING TO THIS AMENDMENT SHALL BE LITIGATED IN SUCH COURTS. EACH LOAN PARTY FOR ITSELFAND 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 WAIVESANY DEFENSE OF FORUM NON CONVENIENS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDEREDTHEREBY IN CONNECTION WITH THIS AMENDMENT. IF ANY LOAN PARTY OR ANY SUBSIDIARY PRESENTLY IS, OR INTHE FUTURE
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BECOMES, A NONRESIDENT OF THE STATE OF NEW YORK, EACH LOAN PARTY FOR ITSELF AND ON BEHALF OFITS SUBSIDIARIES HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCHSERVICE OF PROCESS MAY BE MADE UPON SUCH PERSON BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPTREQUESTED, DIRECTED TO SUCH PERSON AT SUCH PERSON’S ADDRESS AS SET FORTH IN SECTION 8.6 OFTHE LOAN AGREEMENT OR AS MOST RECENTLY NOTIFIED BY SUCH PERSON IN WRITING PURSUANT TOSECTION 8.6 OF THE LOAN AGREEMENT AND SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTERTHE SAME HAS BEEN POSTED AS AFORESAID.     (g) EACH LOAN PARTY FOR ITSELF AND ON BEHALF OF ITS SUBSIDIARIES AND LENDER HEREBY WAIVE THEIRRESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THISAMENDMENT. EACH LOAN PARTY FOR ITSELF AND ON BEHALF OF ITS SUBSIDIARIES AND LENDER FURTHER WARRANTAND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLYAND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.     (h) This Amendment is a Loan Document.     (i) Nothing contained in this Amendment shall operate as a waiver of any right, power, orremedy to which Lender may be entitled, nor constitute a waiver of any provision of the LoanAgreement or any of the other Loan Documents, or any other documents, instruments or agreementsexecuted and/or delivered under or in connection therewith.     (j) This Amendment may be executed by the parties hereto in one or more counterparts, each ofwhich when so executed shall be deemed an original; and such counterparts taken together shallconstitute one and the same agreement. Any signatures delivered by a party by facsimile orelectronic transmission shall be deemed an original signature hereto.(*This space intentionally left blank – signature page follows.*)
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     **IN WITNESS WHEREOF,**Loan Parties and Lender have signed below to indicate their agreement withthe foregoing and their intent to be bound thereby.       **LENDER:** **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         **BORROWERS:** **DIGITAL RECORDERS, INC.**           By: /s/ David L. Turney Name: David L. Turney      Title: CEO, President           **TWINVISION OF NORTH AMERICA, INC.**           By: /s/ David L. Turney Name: David L. Turney      Title: CEO, President         **GUARANTOR:** **DRI CORPORATION**           By: /s/ David L. Turney Name: David L. Turney      Title: CEO, President  *Signature Page to Third Amendment to Loan and Security Agreement*
 

 
     Consented to and Acknowledged by:       **DRI EUROPA AKTIEBOLAG**       By: