exv10w1






Exhibit 10.1




AMENDMENT NO. 4

TO REVOLVING CREDIT AND SECURITY AGREEMENT




     THIS AMENDMENT NO. 4 (this “Agreement”) is entered into as of July 30, 2009, by and between
DIGITAL RECORDERS, INC. (“DR”), TWINVISION OF NORTH AMERICA, INC. (“TVna”, collectively with DR,
each a “Borrower”, and collectively the “Borrowers”), DRI CORPORATION (“DRI”, collectively with the
Borrowers, each a “Loan Party, and collectively, the “Loan Parties”), the financial institutions
party hereto (collectively, the “Lenders” and individually a “Lender”) and PNC BANK, NATIONAL
ASSOCIATION (“PNC”), as agent for Lenders (PNC, in such capacity, the “Agent”).



BACKGROUND




     Loan Parties, Lenders and Agent are parties to that certain Revolving Credit and Security
Agreement dated June 30, 2008 (as amended, restated, supplemented or otherwise modified from time
to time, the “Loan Agreement”) pursuant to which Agent and Lenders provide Borrowers with certain
financial accommodations.



     Loan Parties have requested that Agent and Lenders amend certain provisions of the Loan
Agreement as hereafter provided, and Agent and Lenders are willing to do so on the terms and
conditions hereafter set forth.



     NOW, THEREFORE, in consideration of any loan or advance or grant of credit heretofore or
hereafter made to or for the account of Borrowers by Agent or Lenders, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto hereby agree as follows:



     1. Definitions. All capitalized terms not otherwise defined or amended herein shall
have the meanings given to them in the Loan Agreement.



     2. Amendment. Subject to the satisfaction of Section 3 below, the Loan Agreement is
hereby amended as follows:



          (a) Section 1.2 of the Credit Agreement is hereby amended by inserting the following defined
terms in appropriate alphabetical order:





     “Acceptable Credit Insurance Policies” shall have the meaning provided
in the definition of Eligible Foreign Receivables”.




     “Eligible Foreign Receivables” shall mean and include with respect to
each Borrower, each Receivable of such Borrower that would be an Eligible
Receivable, except that that such Receivable does not meet the requirements of
sub-clause (f) of said definition, provided that no Receivable shall be an
Eligible Foreign Receivable unless (i) it is subject to a credit insurance policy
in form and substance satisfactory to Agent and Agent has been designated as a loss
payee under such credit insurance policy pursuant to a loss payable endorsement in
form



 









 







and substance satisfactory to Agent (an “Acceptable Credit Insurance Policy”)
and (ii) the sale with respect to such Receivable is to a Customer located in the
Netherlands or Belgium.”




     “Foreign Receivables Advance Rate” shall have the meaning set forth in
Section 2.1(a)(y)(i) hereof




     “Foreign Receivables Cap” shall mean, at any time, the lesser of (x)
$2,500,000 in the aggregate and (y) the aggregate amount of coverage under
Acceptable Credit Insurance Policies that the Borrowers’ have with respect to
Eligible Foreign Receivables, as determined by Agent in its reasonable discretion.



          (b) The definition of “Advance Rates” appearing in Section 1.2 of the Loan Agreement
is hereby amended to read in its entirety as set forth below:





     “Advance Rates” shall mean, collectively, the Receivables Advance Rate,
the Foreign Receivables Advance Rate and the Inventory Advance Rate.



          (c) Section 2.1(a)(y)(i) of the Loan Agreement is hereby amended to read in its entirety as
set forth below:





     “(i) the sum of (x) up to 85%, subject to the provisions of Section 2.1(b)
hereof (“Receivables Advance Rate”), of Eligible Receivables plus (y) the
lesser of (A) the applicable Foreign Receivables Cap or (B) up to 75%, subject to
the provisions of Section 2.1(b) hereof (“Foreign Receivables Advance
Rate”), of Eligible Foreign Receivables,”.



     3. Conditions of Effectiveness. This Agreement shall become effective when Agent
shall have received four (4) copies of this Agreement executed by the Required Lenders and each
Loan Party.



     4. Representations, Warranties and Covenants. Each Loan Party hereby represents,
warrants and covenants as follows:



     (a) This Agreement and the Loan Agreement constitute legal, valid and binding obligations of
such Loan Party and are enforceable against such Loan Party in accordance with their respective
terms.



     (b) Upon the effectiveness of this Agreement, each Loan Party hereby reaffirms all covenants,
representations and warranties made in the Loan Agreement to the extent the same are not amended
hereby and agrees that all such covenants, representations and warranties shall be deemed to have
been remade as of the effective date of this Agreement.



     (c) The execution, delivery and performance of this Agreement and all other documents in
connection therewith has been duly authorized by all necessary corporate action, and does not
contravene, violate or cause the breach of any agreement, judgment, order, law or regulation
applicable to any Loan Party



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     (d) No Event of Default or Default has occurred and is continuing or would exist after giving
effect to this letter amendment.



     (e) No Loan Party has any defense, counterclaim or offset with respect to the Loan Agreement
or the Obligations.



     5. Effect on the Loan Agreement.



     (a) Upon the effectiveness of this Agreement, each reference in the Loan Agreement to “this
Agreement,” “hereunder,” “hereof,” “herein” or words of like import shall mean and be a reference
to the Loan Agreement as amended hereby. Except as specifically amended herein, the Loan
Agreement, and all other documents, instruments and agreements executed and/or delivered in
connection therewith, shall remain in full force and effect, and are hereby ratified and confirmed.
This Agreement shall constitute an “Other Document” for all purposes under the Loan Agreement.



     (b) The execution, delivery and effectiveness of this Agreement shall not operate as a waiver
of any right, power or remedy of Agent or any Lender, nor constitute a waiver of any provision of
the Loan Agreement, or any other documents, instruments or agreements executed and/or delivered
under or in connection therewith.



     6. Governing Law. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns and shall be governed by and
construed in accordance with the laws of the State of New York (other than those conflict of law
rules that would defer to the substantive law of another jurisdiction).



     7. Cost and Expenses. Loan Parties hereby agree to pay the Agent, on demand, all
costs and reasonable expenses (including reasonable attorneys’ fees and legal expenses) incurred in
connection with this Agreement and any instruments or documents contemplated hereunder.



     8. Headings. Section headings in this Agreement are included herein for convenience
of reference only and shall not constitute a part of this Agreement for any other purpose.



     9. Counterparts; Facsimile Signatures. This Agreement may be executed by the parties
hereto in one or more counterparts of the entire document or of the signature pages hereto, each of
which shall be deemed an original and all of which taken together shall constitute one and the same
agreement. Any signature received by facsimile or electronic transmission shall be deemed an
original signature hereto.



[Remainder of page intentionally left blank]




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     IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and year first written
above.



	 	 	 	 	 
	 	PNC BANK, NATIONAL ASSOCIATION,

as Lender and as Agent

 	 
	 	By:  	/s/ John T. Trieu
 	 
	 	 	Name:  	John T. Trieu 	 
	 	 	Title:  	Vice President 	 
	 
	 	DRI CORPORATION

 	 
	 	By:  	/s/ Stephen P. Slay
 	 
	 	 	Name:  	Stephen P. Slay 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	DIGITAL RECORDERS, INC.

 	 
	 	By:  	/s/ Stephen P. Slay
 	 
	 	 	Name:  	Stephen P. Slay 	 
	 	 	Title:  	Vice President and Secretary 	 
	 
	 	TWINVISION OF NORTH AMERICA, INC.

 	 
	 	By:  	/s/ Stephen P. Slay
 	 
	 	 	Name:  	Stephen P. Slay 	 
	 	 	Title:  	Vice President and Secretary 	 
	 



[Signature Page to Amendment No. 4]