Document:

exv10w6

Exhibit 10.6

The security
interest granted pursuant to this instrument is subordinated to other security
interests pursuant to, and to the extent provided in, and is otherwise subject to the terms of, the
Intercreditor Agreement, dated as of June 30, 2008, between BHC Interim Funding III L.P.,
as Junior Creditor, and PNC Bank, National Association, as Agent under the Revolving Credit and
Security Agreement, as Senior Creditor, as the same may be amended, restated, supplemented or
otherwise modified or extended or renewed from time to time.

CONTINUING UNCONDITIONAL GUARANTY

(Corporate)

     WHEREAS, Digital Recorders, Inc., a North Carolina corporation, TwinVision of North America,
Inc., a North Carolina corporation (“Borrowers”) and DRI Corporation, a North Carolina
corporation (“Guarantor”), are entering into that certain Loan and Security Agreement dated
as of even date herewith (as may be amended, restated, supplemented or otherwise modified from time
to time, the “Loan Agreement”) with BHC Interim Funding III, L.P., a Delaware limited
partnership (“Lender”), pursuant to which Lender is concurrently making a secured term loan
to Borrowers (the “Term Loan”); and

     WHEREAS, Lender has required that Guarantor execute and deliver this Continuing Unconditional
Guaranty, dated as of June 30, 2008 (this “Guaranty”), to Lender as a condition precedent
to making the Term Loan to Borrowers pursuant to the Loan Agreement; and

     WHEREAS, Borrowers are wholly-owned subsidiaries of Guarantor and therefore Guarantor will
directly or indirectly receive certain benefits from the credit accommodations hereinabove
described and is therefore willing to guaranty the prompt payment and performance of the
Obligations (as such term is hereinafter defined) of Borrowers, on the terms set forth in this
Guaranty.

     NOW, THEREFORE, for value received and in consideration of Lender’s execution of the Loan
Agreement and making of the Term Loan to Borrowers, the undersigned unconditionally guarantees
(i) the full and prompt payment when due, whether at maturity or earlier, by reason of acceleration
or otherwise, and at all times thereafter, of all of the indebtedness and obligations of every kind
and nature of Borrowers to Lender, or any parent, affiliate or subsidiary of Lender (the term
“Lender” as used hereafter shall include such parents, affiliates and subsidiaries), pursuant to
the terms of the Loan Agreement and the other Loan Documents (as such term is defined in the Loan
Agreement), and whether principal, interest, fees, costs, expenses or otherwise (including, without
limitation, any interest, fees or expenses accruing following the commencement of any insolvency,
receivership, reorganization or bankruptcy case or proceeding relating to Borrowers (or either of
them), whether or not a claim for post-petition interest, fees or expenses is allowed in such case
or proceeding), howsoever created, arising or evidenced, whether direct or indirect, absolute or
contingent, joint or several,

 

 

now or hereafter existing, or due or to become due, and howsoever
owned, held or acquired by Lender, whether through discount, overdraft, purchase, direct loan or as
collateral or otherwise; and (ii) the prompt, full and faithful discharge by Borrowers of each and
every term, condition, agreement, representation and warranty now or hereafter made by Borrowers to
Lender under the Loan Agreement and the other Loan Documents (all such indebtedness and obligations
being hereinafter referred to as the “Obligations”). For sake of clarity, the Obligations
shall include all “Obligations” as defined in the Loan Agreement. Guarantor further agrees to pay
all reasonable out-of-pocket costs and expenses, including, without limitation, all court costs and
reasonable attorneys’ and paralegals’ fees paid or incurred by Lender in collecting all or any part
of the Obligations from, or in prosecuting or defending any action against, Guarantor or any other
guarantor of all or any part of the Obligations. All amounts payable by Guarantor under this
Guaranty shall be payable upon demand by Lender and shall be made in lawful money of the United
States, in immediately available funds.

     SECTION 1. No Fraudulent Conveyance. Notwithstanding any provision of this Guaranty to the
contrary, it is intended that this Guaranty, and any liens and security interests granted by
Guarantor to secure this Guaranty, do not constitute a “Fraudulent Conveyance” (as defined below).
Consequently, Guarantor agrees that if this Guaranty, or any liens and security interests securing
this Guaranty, would, but for the application of this sentence, constitute a Fraudulent Conveyance,
this Guaranty and each such lien and security interest shall be valid and enforceable only to the
maximum extent that would not cause this Guaranty or such lien and security interest to constitute
a Fraudulent Conveyance, and this Guaranty or the Loan Documents providing for such liens and
security interests shall automatically be deemed to have been amended accordingly at all relevant
times. For purposes hereof, “Fraudulent Conveyance” means a
fraudulent conveyance under Section 548 of the Bankruptcy Code (as hereinafter defined) or a
fraudulent conveyance or fraudulent transfer under the provisions of any applicable fraudulent
conveyance or fraudulent transfer law or similar law of any state, nation or other governmental
unit, as in effect from time to time.

     SECTION 2. Unconditional Guaranty. Guarantor hereby agrees that, except as hereinafter
provided, its obligations under this Guaranty shall be irrevocable, absolute and unconditional,
irrespective of (i) the validity or enforceability of the Obligations or any part thereof, or of
any promissory note or other document evidencing all or any part of the Obligations, (ii) the
absence of any attempt to collect from Borrowers or any other guarantor all or any part of the
Obligations or other action to enforce the same, (iii) the waiver or consent by Lender with respect
to any provision of any instrument evidencing the Obligations, or any part thereof, or any other
agreement heretofore, now or hereafter executed by Borrowers or any other guarantor, and delivered
to Lender, (iv) failure by Lender to take any steps to perfect and maintain its security interest
in, or to preserve its rights to, any security or collateral for the Obligations, (v) the existence
or nonexistence of any defenses which may be available to Borrowers or any other guarantor with
respect to all or any part of the Obligations, (vi) the institution of any proceeding under Chapter
11 of Title 11 of the United States Code (11 U.S.C. § 101 et seq.), as amended (the “Bankruptcy
Code”), or any similar proceeding, by or against Borrowers or any other guarantor or Lender’s
election in any such proceeding of the application of Section 1111(b)(2) of the Bankruptcy Code,
(vii) any borrowing or grant of a security interest by Borrowers, as debtor-in-possession, under
Section 364 of the Bankruptcy Code (or use of

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cash collateral under Section 363 of the Bankruptcy
Code), (viii) the disallowance, under Section 502 of the Bankruptcy Code, of all or any portion of
Lender’s claim(s) for repayment of the Obligations, or (ix) any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of any other guarantor.

     SECTION 3. Waiver. Guarantor hereby waives diligence, presentment, demand of payment, filing
of claims with a court in the event of receivership or bankruptcy of any Borrowers or any other
guarantor, protest or notice (except as provided elsewhere in the Loan Documents) with respect to
the Obligations and all demands whatsoever, and covenants that this Guaranty will not be
discharged, except by complete and indefeasible payment and performance of the Obligations.
Guarantor further waives notice of (i) acceptance of this Guaranty, (ii) the existence or incurring
from time to time of any Obligations guarantied hereunder, (iii) the existence of any Default or
Event of Default, the making of demand, nonpayment, or the taking of any action by Lender, under
the Loan and Security Agreement or any other Loan Document, and (iv) default and demand hereunder.
Upon the occurrence and during the continuance of any Event of Default (as defined in the Loan
Agreement), Lender may, at its sole election (regardless of whether the liability of Borrowers or
any other guarantor of all or any part of the Obligations has matured or may then be enforced),
proceed directly and at once, without notice, against Guarantor to collect and recover the full
amount or any portion of the Obligations, without first proceeding against any Borrowers or any
other person, firm or corporation, or against any security or collateral for the Obligations.
Guarantor agrees that this Guaranty constitutes a guarantee of payment when due and not of
collection.

     SECTION 4. Authorization. Lender is hereby authorized, without notice or demand and without
affecting the liability of Guarantor hereunder, at any time and from time to time to
(i) renew, extend, accelerate or otherwise change the time for payment of, or other terms
relating to, the Obligations or otherwise modify, amend or change the terms of any promissory note
or other agreement, document or instrument now or hereafter executed by Borrowers or any other
guarantor and delivered to Lender; (ii) accept partial payments on the Obligations; (iii) take and
hold security or collateral for the payment of the Obligations guaranteed hereby, or for the
payment of this Guaranty, or for the payment of any other guaranties of the Obligations, and
exchange, enforce, waive and release any such security or collateral; (iv) apply such security or
collateral and direct the order or manner of sale or other disposition thereof as in its discretion
it may determine; and (v) settle, release, compromise, collect or otherwise liquidate the
Obligations and any security or collateral therefor in any manner, without affecting or impairing
the obligations of Guarantor hereunder. Lender shall have the exclusive right to determine the
time and manner of application of any payments or credits, whether received from Borrowers or any
other source, and such determination shall be binding on Guarantor. All such payments and credits
may be applied, reversed and reapplied, in whole or in part, to any of the Obligations as Lender
shall determine in its discretion without affecting the validity or enforceability of this
Guaranty.

     SECTION 5. Security Interest. To secure the payment and performance of the Obligations and
Guarantor’s obligations hereunder, Guarantor grants to Lender a continuing perfected lien on and
security interest in all of Guarantor’s right, title and interest in and to the following
(collectively, the “Collateral”):

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          (i) all Accounts, Chattel Paper (including all Electronic Chattel Paper and Tangible Chattel
Paper), Commercial Tort Claims, Deposit Accounts, Documents (including all warehouse receipts and
bills of lading), Equipment, Fixtures, General Intangibles (including all Payment Intangibles and
Software), Goods, Instruments (including all Promissory Notes and Negotiable Instruments),
Inventory (including all stock-in-trade, raw materials, work in process, items held for sale or
lease or furnished or to be furnished under contracts of sale or lease, goods that are returned,
reclaimed or repossessed, and materials used or consumed in such Loan Party’s business), Investment
Property and Financial Assets (including all Commodity Accounts, Commodity Contracts, Securities
(including all Certificated Securities and Uncertificated Securities), Security Entitlements and
Securities Accounts), Letter of Credit Rights and Money,

          (ii) all parts, substitutions or replacements to or of or accessories to any tangible assets
and property included in the foregoing, and all Software and computer programs embedded in the
foregoing, and all Accessions to the foregoing,

          (iii) all Supporting Obligations for any of the foregoing and all rights of such Loan Party in
any property belonging to any third party in which a Lien of any kind or nature has been granted to
such Loan Party to secure the payment or performance of any third party under or with respect to
any of the foregoing,

          (iv) all Records, books, ledger cards, files, correspondence, customer lists, blueprints,
technical specifications, manuals, computer software, computer printouts, tapes, disks and other
electronic storage media and related data processing software and similar items that at any time
evidence or contain information relating to any of the foregoing or are otherwise
necessary or helpful in the collection thereof or realization thereupon and all other business
books and Records of such Loan Party, and

          (v) all cash and non-cash Proceeds (including, without limitation, insurance proceeds),
products, rents and profits of all of the foregoing. Guarantor hereby authorizes Lender to record
without such Guarantor’s signature any and all financing statements deemed necessary or appropriate
by Lender to the perfection of its security interest in the Collateral.

All of the capitalized terms used in subsections (i) – (v) above, unless otherwise defined herein,
shall have the meanings ascribed to such terms under the Uniform Commercial Code as in effect in
the State of New York. Guarantor hereby authorizes Lender to record without such Guarantor’s
signature any and all financing statements deemed necessary or appropriate by Lender to the
perfection of its security interest in the Collateral. Guarantor agrees that Lender shall have the
rights and remedies of a secured party under the Uniform Commercial Code of New York, as now
existing or hereafter amended, with respect to all of the aforesaid property, including, without
limitation, thereof, the right to sell or otherwise dispose of any or all of such property and
apply the proceeds of such sale to the payment of the Obligations. In addition, at any time during
the existence of an Event of Default, Lender may, in its discretion, without notice to Guarantor
and regardless of the acceptance of any security or collateral for the payment hereof, appropriate
and apply toward the payment of the Obligations (i) any indebtedness due from Lender to Guarantor,
and (ii) any moneys, credits or other property belonging to Guarantor, at any time held by or
coming into the possession of Lender whether for deposit or otherwise.

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     SECTION 6. Guarantor’s Responsibility. Guarantor hereby assumes responsibility for keeping
itself informed of the financial condition of Borrowers and any and all endorsers and/or other
guarantors of any instrument or document evidencing all or any part of the Obligations and of all
other circumstances bearing upon the risk of nonpayment of the Obligations or any part thereof, and
Guarantor hereby agrees that Lender shall have no duty to advise Guarantor of information known to
Lender regarding such condition or any such circumstances or to undertake any investigation. If
Lender, in its discretion, undertakes at any time or from time to time to provide any such
information to Guarantor, Lender shall be under no obligation to update any such information or to
provide any such information to Guarantor on any subsequent occasion. Guarantor further
acknowledges that Guarantor has examined or had the opportunity to examine the Loan and Security
Agreement and the other Loan Documents, and waives any defense which may exist resulting from
Guarantor’s failure to receive or examine at any time the Loan and Security Agreement or the other
Loan Documents.

     SECTION 7. Consent. Guarantor consents and agrees that Lender shall be under no obligation to
marshal any assets in favor of Guarantor or against or in payment of any or all of the Obligations.
Guarantor further agrees that, to the extent that Borrowers, Guarantor or any other Person (as
defined in the Loan Agreement) makes a payment or payments to Lender, or Lender receives any
proceeds of collateral, which payment or payments or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be repaid to Borrowers, its
estate, trustee, receiver or any other Person, including, without limitation, Guarantor, under any
bankruptcy law, state or federal law, common law or equitable theory, then to the extent of such
payment or repayment, the Obligations or the part thereof which has been paid, reduced or satisfied
by such amount, and Guarantor’s obligations hereunder
with respect to such portion of the Obligations, shall be reinstated and continued in full
force and effect as of the date such initial payment, reduction or satisfaction occurred.

     SECTION 8. Transfer. Lender may sell or assign the Obligations or any part thereof, or grant
participations therein, and in any such event, each and every immediate or remote assignee or
holder of, or participant in, all or any of the Obligations shall have the right to enforce this
Guaranty, by suit or otherwise, for the benefit of such assignee, holder or participant, as fully
as if herein by name specifically given such right, but Lender shall have an unimpaired right,
prior and superior to that of any such assignee, holder or participant, to enforce this Guaranty
for the benefit of Lender, as to any part of the Obligations retained by Lender.

     SECTION 9. Binding on Assigns. This Guaranty shall be binding upon Guarantor and upon the
heirs, executors, successors (including, without limitation, any receiver, trustee or
debtor-in-possession of or for Guarantor) and assigns of Guarantor, and shall inure to the benefit
of Lender and its successors and assigns; provided, however, that Guarantor’s
obligations hereunder may not be delegated or assigned without Lender’s prior written consent.

     SECTION 10. Representations and Warranties. Guarantor represents and warrants (which
representations and warranties shall survive the execution and delivery hereof) to Lender that:

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     (a) Guarantor has the full power, authority and legal capacity to execute, deliver and perform
this Guaranty and the transactions contemplated hereby;

     (b) No consent of any person (including, without limitation, creditors of Guarantor), and no
consent, permit, approval or authorization of, exemption by, notice or report to, or registration,
filing or declaration with, any governmental authority is required in connection with the
execution, delivery, performance, validity or enforceability of this Guaranty and the transactions
contemplated hereby;

     (c) This Guaranty has been duly executed and delivered on behalf of Guarantor, and constitutes
the legal, valid and binding obligation of Guarantor, enforceable in accordance with its terms,
except as the enforceability thereof may be limited by applicable bankruptcy, reorganization,
insolvency, moratorium or other laws affecting creditors’ rights generally;

     (d) The execution, delivery and performance of this Guaranty will not violate any requirement
of law applicable to or material contractual obligation of Guarantor; and

     (e) It is in Guarantor’s direct interest to assist Borrowers in procuring credit because
Guarantor has a direct or indirect investment in or business relationship with Borrowers.

     SECTION 11. Continuation. This Guaranty shall continue in full force and effect (and may not
be revoked or terminated), and Lender shall be entitled to make the Term Loan and extend other
financial accommodations to Borrowers on the faith hereof until such time as Lender has, in
writing, notified Guarantor that all of the Obligations (including, without limitation, the
Obligations under the Warrant) have been indefeasibly paid and satisfied in full and the Loan
Agreement has been terminated.

     SECTION 12. Subrogation. Any and all rights of any nature of Guarantor to subrogation,
contribution, reimbursement or indemnity and any right of Guarantor to recourse to any assets or
property of, or payment from, Borrowers or any other guarantor of all or any part of the
Obligations as a result of any payments made or to be made hereunder for any reason are hereby
unconditionally waived, and Guarantor shall not at any time exercise any of such rights unless and
until all of the Obligations have been indefeasibly paid and satisfied in full. Any payments
received by Guarantor in violation of this Section 12 shall be held in trust for and
immediately remitted to Lender.

     SECTION 13. Subordination. The payment of any and all of indebtedness, liabilities and
obligations of Borrowers to Guarantor of every kind or nature, whether joint or several, due or to
become due, absolute or contingent, now existing or hereafter arising, and whether principal,
interest, fees, costs, expenses or otherwise (collectively, the “Subordinated Debt”), is
expressly subordinated to the Obligations. So long as any Obligations remain outstanding and the
Loan and Security Agreement has not been terminated, no payment of any kind (by voluntary payment,
prepayment, acceleration, setoff or otherwise) of any portion of the Subordinated Debt may be made
by Borrowers or received or accepted by Guarantor at any time. Until such time as

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the Obligations
have been indefeasibly paid and satisfied in full and the Loan and Security Agreement has been
terminated, Guarantor will not (i) obtain any Lien on any property of any Borrowers to secure the
Subordinated Debt, or (ii) make demand for payment of the Subordinated Debt or commence any
lawsuit, action or proceeding of any kind against any Borrowers to recover all or any part of the
Subordinated Debt. Any payments received by Guarantor in violation of this Section shall be held
in trust for and immediately remitted to Lender.

     SECTION 14. GOVERNING LAW. THIS GUARANTY 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.

     SECTION 15. CONSENT TO JURISDICTION; SERVICE OF PROCESS. GUARANTOR 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 LENDER’S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING
OUT OF OR RELATING TO THIS GUARANTY SHALL BE LITIGATED IN SUCH COURTS. GUARANTOR ACCEPTS FOR
ITSELF, 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 GUARANTY. GUARANTOR HEREBY WAIVES PERSONAL SERVICE OF ANY
AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON GUARANTOR BY CERTIFIED
OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO GUARANTOR, AT GUARANTOR’S ADDRESS SET
FORTH ON THE SIGNATURE PAGE HEREOF OR AS MOST RECENTLY NOTIFIED BY GUARANTOR IN WRITING, AND
SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED AS AFORESAID.

     SECTION 16. JURY TRIAL WAIVER. GUARANTOR AND LENDER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS GUARANTY. GUARANTOR
AND LENDER ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS
RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS GUARANTY AND THAT
EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. GUARANTOR AND LENDER
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.

     SECTION 17. Entire Agreement; Severability. This Guaranty represents the entire understanding
and agreement between Guarantor, on the one hand, and Lender, on the other hand, with respect to
the subject matter contained herein, and there are no other existing

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agreements or understandings,
whether oral or written, between or among such parties as to such subject matter. Wherever
possible, each provision of this Guaranty shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Guaranty shall be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision or the remaining
provisions of this Guaranty.

     SECTION 18. Cumulative Remedies; Amendments. All rights and remedies hereunder and under the
Loan and Security Agreement and the other Loan Documents are cumulative and not alternative, and
Lender may proceed in any order from time to time against Borrowers, Guarantor or any other
Guarantor of all or any part of the Obligations and their respective assets. Lender shall not have
any obligation to proceed at any time or in any manner against, or exhaust any or all of Lender’s
rights against, Borrowers or any other Guarantor of all or any part of the Obligations prior to
proceeding against Guarantor hereunder. No failure or delay on the part of Lender in the exercise
of any power, right or privilege shall impair such power, right or privilege or be construed to be
a waiver of any default or acquiescence therein, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise thereof or of any other right,
power or privilege. No amendment, modification or waiver of any provision of this Guaranty, or
consent to any departure by Guarantor therefrom, shall be effective unless the same shall be in
writing and signed by Lender and Guarantor. Each amendment, modification or waiver shall be
effective only in the specific instance and for the specific purpose for which it was given.

[Remainder of Page Intentionally Left Blank]

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          IN WITNESS WHEREOF, this Guaranty has been duly executed by the undersigned as of the date
first written above.

	 	 	 	 	 
	 	 	DRI CORPORATION
	 
	 	 	 	 
	 

	 	By:
	/S/ DAVID L. TURNEY
	 

	 	 	 
	 	 	Name: David L. Turney
	 	 	Title: CEO/President
	 
	 	 	 	 
	 

	 	Address: 
	13760 Noel Road, Suite 830
	 

	 	 	 	 
	 

	 	 	 	Dallas, Texas 75240
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 

	 	 	 	 	 
	Accepted:	 	 
	 
	 	 	 	 
	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: 

Name:

	 	/S/ GERALD H. HOUGHTON
 

Gerald H. Houghton
	 	 
	Title:

	 	Managing Memberexv10w7

Exhibit 10.7

The security interest granted pursuant to this instrument is subordinated to other security
interests pursuant to, and to the extent provided in, and is otherwise subject to the terms of, the
Intercreditor Agreement, dated as of June 30, 2008, between BHC Interim Funding III L.P., as Junior
Creditor, and PNC Bank, National Association, as Agent under the Revolving Credit and Security
Agreement, as Senior Creditor, as the same may be amended, restated, supplemented or otherwise
modified or extended or renewed from time to time.

STOCK PLEDGE AGREEMENT

     THIS STOCK PLEDGE AGREEMENT (as may be amended, restated, supplemented or otherwise modified
from time to time, this “Agreement”) is dated and made as of June 30, 2008 by DRI
Corporation, a North Carolina corporation (the “Pledgor”), in favor of BHC Interim Funding
III, L.P., a Delaware limited partnership (the “Lender”)

W I T N E S S E T H:

     WHEREAS, the Pledgor is entering into that certain Loan and Security Agreement, dated as of
the date hereof (as may be amended, restated, supplemented or otherwise modified from time to time,
the “Loan and Security Agreement”), by and among Digital Recorders Inc., a North Carolina
corporation, TwinVision of North America, Inc., a North Carolina corporation, (collectively, the
“Borrowers”), Pledgor and the Lender, pursuant to which the Lender is extending a term loan to the
Borrowers, which will benefit the Pledgor; and

     WHEREAS, the Pledgor is the owner of all of the issued and outstanding shares of common stock
of the Borrowers, Robinson Turney International, Inc. (“RTI”), and DRI Europa AB, a Swedish
corporation (“Europa” and, together with the Borrowers and RTI, the “Issuers”), which
shares are listed on Schedule 2(A) attached hereto and made a part hereof (the “Pledged
Stock”); and

     WHEREAS, it is a condition precedent to the effectiveness of the Loan and Security Agreement
that the Pledgor shall have executed this Agreement and made the pledge in favor of the Lender, as
contemplated hereby.

     NOW, THEREFORE, in consideration of the premises made herein and to induce the Lender to enter
into the Loan and Security Agreement, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Pledgor hereby agrees with the Lender as
follows:

     1. Definitions. Unless the context otherwise requires, all terms used but not
expressly defined herein shall have the meanings given to them in the Loan and Security
Agreement or, if they are not defined in the Loan and Security Agreement but are defined in the
UCC, they shall have the same meaning herein as in the UCC.

 

 

     2. Pledge of the Pledged Stock; Power of Attorney.

          (a) As security for the prompt payment and performance when due of the Obligations, the
Pledgor hereby pledges to the Lender, and grants to the Lender a perfected lien on and security
interest in, the following (the “Pledged Collateral”): (i)  all of the Pledged Stock of
Borrowers and RTI and sixty-five percent (65%) of the Pledged Stock of Europa, (ii) all additional
shares of stock or other securities at any time issued by the Issuers to the Pledgor, (iii) the
certificates evidencing all such shares and securities, (iv) subject to Section 6 hereof,
all dividends, cash, instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for all or any part of the Pledged Stock and
such shares and securities and (v) all proceeds of any of the foregoing (including, without
limitation, proceeds constituting any property of the types described above), provided that
in no event shall more than sixty-five (65%) of total outstanding shares of common stock of Europa
be pledged hereunder. The Pledgor has delivered to the Lender original stock certificates for all
of the Pledged Stock, including, an original stock certificate for one hundred percent (100%) of
the Pledged Stock of Europa (the “Europa Certificate”), each accompanied by an undated stock power
executed in blank by the Pledgor. The Europa Certificate has been delivered to Lender solely for
administrative convenience, so that Pledgor does not have to surrender the Europa Certificate in
exchange for two stock certificates representing one hundred percent (100%) of the Pledged Stock.
The Lender acknowledges and agrees that the Pledged Collateral described in clause (i) of this
paragraph includes only sixty-five percent (65%) of the Pledged Stock of Europa and that the
remaining thirty five percent (35%) is being held by the Lender solely for the benefit of the
Pledgor.

          (b) The Lender shall have no obligation with respect to any of the Pledged Collateral or any
other property held or received by it hereunder except to use reasonable care in the custody
thereof to the extent required by law. The Lender may hold the Pledged Collateral in the form in
which it is received by it.

          (c) The Pledgor, to the full extent permitted by law, hereby constitutes and irrevocably
appoints the Lender (and any officer or agent of the Lender, with full power of substitution and
revocation) as the Pledgor’s true and lawful attorney-in-fact, in the Pledgor’s stead and in the
name of the Pledgor or in the name of the Lender, to transfer, upon the occurrence and during the
continuance of an Event of Default, the Pledged Collateral on the books of the Issuers, in whole or
in part, to the name of the Lender or such other Person or Persons as the Lender may designate and,
upon the occurrence and during the continuance of an Event of Default, to take all such other and
further actions as the Pledgor could have taken with respect to the Pledged Collateral which the
Lender in its absolute discretion determines to be necessary or appropriate to accomplish the
purposes of this Agreement.

          (d) The powers of attorney granted pursuant to this Agreement and all authority hereby
conferred are granted and conferred solely to protect the Lender’s interests in the Pledged
Collateral and shall not impose any duty upon the attorney-in-fact to exercise such powers. Such
powers of attorney shall be irrevocable prior to the payment in full of the Obligations and the
termination of the Loan and Security Agreement, and shall not be terminated prior thereto or
affected by any act of the Pledgor or other Persons or by operation of law.

-2-

 

          (e) Each Person who shall be a transferee of the beneficial ownership of any of the Pledged
Collateral (any such transfer being prohibited under Section 5 unless the Lender consents
thereto) shall be deemed to have irrevocably appointed the Lender, with full power of substitution
and revocation, as such Person’s true and lawful attorney-in-fact in such Person’s name and
otherwise to do any and all acts herein permitted and to exercise any and all powers herein
conferred.

     3. Rights of the Pledgor; Voting.

          (a) During the term of this Agreement, and so long as no Voting Notice (as defined below) is
received from the Lender following the occurrence of an Event of Default as hereinafter provided in
this Section 3, the Pledgor shall have the right to vote any of the Pledged Collateral in
all corporate matters except those which would contravene this Agreement, the Loan and Security
Agreement or any of the other Loan Documents, or which would be reasonably likely to materially
reduce the value of such Pledged Collateral, unless the Lender consents thereto. The Pledgor shall
not suffer or permit any such action to be taken by the Issuers without the prior written approval
(which approval the Lender may withhold in its sole discretion) of the Lender.

          (b) Upon the occurrence and during the continuance of an Event of Default: (i) the Pledgor
shall give the Lender at least five (5) days’ prior written notice of (A) any meeting of
stockholders or directors of the Issuers convened for any purpose and (B) any written consent which
the Pledgor proposes to execute as the stockholder of the Issuers or which any of the
representatives of the Pledgor proposes to execute as a director of the Issuers, and (ii) in
connection with the foregoing, the Pledgor hereby authorizes the Lender to send its agents and
representatives to any such meeting of stockholders or directors of the Issuers that the Lender
wishes to attend, and agrees to take such steps as may be necessary to confirm and effectuate such
authority, including, without limitation, causing the Issuers to give reasonable prior written
notice to the Lender of the time and place of any such meeting and the principal actions to be
taken thereat, and (iii) the Pledgor hereby irrevocably authorize and instruct the Issuers to
comply with any instruction received by it from the Lender in writing that (A) states that an Event
of Default has occurred and (B) is otherwise in accordance with the terms of this Agreement,
without any other or further instructions from the Pledgor, and the Pledgor agrees that the Issuers
shall be fully protected in so complying.

          (c) Notwithstanding the occurrence of an Event of Default, the Pledgor may continue to
exercise its voting rights as herein described (and subject to the limitations herein) except to
the extent that the Lender may elect to exercise voting power (as determined by it in its sole
discretion) by a written notice given to the Pledgor at any time during the continuance of an Event
of Default (a “Voting Notice”), whereupon the Lender shall have the exclusive right to
exercise such rights to the extent specified in such Voting Notice, and the Pledgor shall take all
such steps as may be necessary to effectuate such rights until the Lender notifies the Pledgor of
the release of such rights. The voting rights of the Lender hereunder shall terminate at such time
as the Event of Default in respect of which the Voting Notice was given shall no longer continue,
provided, that upon the occurrence of any other Event of Default Lender may at any time
give a further Voting Notice and exercise voting power in accordance with the terms of this
Agreement.

-3-

 

     4. No Restrictions on Transfer. The Pledgor warrants and represents that, except as
set forth on Schedule 4 hereto, there are no restrictions on the transfer of any of the
Pledged Stock except for such restrictions imposed by operation of law, that there are no options,
warrants or rights pertaining thereto, and that the Pledgor has the right to transfer the Pledged
Stock free of any encumbrances and without the consent of the creditors of the Pledgor or the
consent of the Issuers, or any other Person or any governmental agency whatsoever. Without
limiting the generality of the foregoing, the Pledged Collateral is not subject to any voting,
“lock-up” or similar agreement.

     5. No Transfer or Liens; Additional Securities; Release of Lien. The Pledgor agrees
that, except as set forth on Schedule 5 hereto, it will not sell, transfer or convey any
interest in, or suffer or permit any lien or encumbrance to be created upon or with respect to, any
of the Pledged Collateral or any of the shares of common stock of Europa that are not Pledged
Collateral during the term of this Agreement, except to or in favor of the Lender. The Pledgor
shall not cause, suffer or permit the Issuers to issue any common or preferred stock, or any other
equity security, to any Person, unless the Lender otherwise consents in writing (which consent may
be withheld in the Lender’s sole discretion). Notwithstanding anything contained herein to the
contrary, upon the occurrence of a Capital Event, as hereinafter defined, so long as no Event of
Default shall have occurred and be continuing, the Pledgor may request the Lender to consent to a
release of its lien on and security interest in the shares of Pledged Stock which are the subject
of such Capital Event, which consent shall not be unreasonably withheld. The term “Capital Event”,
as used herein, means the sale, transfer or other disposition by the Pledgor, for fair
consideration, to a Person, other than an Affiliate of the Pledgor, the Issuers, or any of their
Affiliates, of any or all of the shares of Pledged Stock owned by the Pledgor.

     6. Adjustments of Pledged Stock; Payment and Application of Dividends. In the event
that during the term of this Agreement any stock dividend, reclassification, readjustment or other
change is declared or made in the capital structure of the Issuers or if any other or additional
shares of stock of the Issuers are issued to the Pledgor, all new, substituted and additional
shares or other securities issued by reason of any such change or acquisition shall immediately be
delivered by the Pledgor to the Lender and shall be deemed to be part of the “Pledged Collateral”
under the terms of this Agreement in the same manner as the shares of stock originally pledged
hereunder. Any additional shares of stock received by the Pledgor as a result of the Pledgor’s
record ownership of the Pledged Stock shall immediately be delivered by the Pledgor to the Lender
as Pledged Collateral hereunder. Upon the occurrence and during the continuance of an Event of
Default, the Pledgor will not demand or be entitled to receive, any cash dividends or other income,
interest or property in or with respect to the Pledged Collateral, and if the Pledgor receives any
of the same, the Pledgor shall immediately deliver it to the Lender.

     7. Warrants and Options. In the event that during the term of this Agreement, any
subscription warrants or other rights or options shall be issued in connection with any of the
Pledged Collateral, all such stock warrants, rights and options shall forthwith be assigned to the
Lender by the Pledgor, and said stock warrants, rights and options shall be, and, if exercised by
the Pledgor, all new stock issued pursuant thereto shall be, pledged by the Pledgor to the Lender
and shall immediately be delivered by Pledgor to the Lender to be held as, and shall be deemed

-4-

 

to be part of, the Pledged Collateral under the terms of this Agreement in the same manner and
percentage as the shares of capital stock originally pledged hereunder.

     8. Return of Pledged Collateral Upon Payment or Termination. Upon the full payment
and satisfaction of all of the Obligations and the termination of the Loan and Security Agreement,
the Lender shall cause to be transferred or returned to the Pledgor all of the Pledged Collateral
and any money, property and rights received by the Lender pursuant hereto, to the extent the Lender
has not taken, sold or otherwise realized upon the same as permitted hereunder, together with the
related stock powers and all other documents reasonably required by the Pledgor to evidence
termination of the pledge contemplated hereby.

     9. Events of Default; Remedies.

          (a) Upon the occurrence and during the continuance of an Event of Default, the Lender may
exercise all rights with respect to any of the Pledged Collateral, the proceeds thereof, and any
other property or money held by the Lender hereunder, all rights and remedies available to it under
law, including, without limitation, those given, allowed or permitted to a secured party by or
under the UCC, and all rights and remedies provided for herein.

          (b) Without limiting the foregoing, in the event that the Lender elects to sell all or any
part of the Pledged Stock (such term including, for purposes of this Section 9, the Pledged
Stock and all other shares of stock or securities at any time forming part of the Pledged
Collateral), the Lender shall have the power and right in connection with any such sale,
exercisable at its option and in its absolute discretion, to sell, assign, and deliver all or any
part of the Pledged Stock or any additions thereto at a private or public sale for cash, on credit
or for future delivery and at such price as the Lender deems to be satisfactory (and if permitted
by law, the Lender or its nominee may become the purchaser at any such sale). Notice of any public
sale shall be sufficient if it is published at least once not less than ten (10) days prior to the
date of sale in any newspaper then being circulated in the City of New York, New York as the Lender
may elect. The Lender shall give written notice of a public sale to the Pledgor. All requirements
of reasonable notice under this Section 9 shall be met if such notice is mailed, postage
prepaid at least ten (10) days before the time of such sale or disposition, to the Pledgor at its
address set forth in Section 16 hereto or such other address as the Pledgor may have, in
writing, provided to the Lender. The Lender may, if it deems it reasonable, postpone or adjourn
any sale of any collateral from time to time by an announcement at the time and place of the sale
to be so postponed or adjourned without being required to give a new notice of sale. The Pledgor
further recognizes and agrees that if the Pledged Stock, or a portion thereof, threatens to decline
speedily in value or is of a type customarily sold on a recognized market, the Pledgor shall not be
entitled to any prior notice of sale or other intended disposition. The Pledgor agrees that, in
connection with any sale or other disposition of the Pledged Stock, the Lender may, at Lender’s
option, disclaim any and all warranties regarding the Pledged Stock and that any such disclaimer
shall constitute commercially reasonable conduct on the part of Lender.

          (c) Because federal and state securities laws may restrict the methods of disposition of the
Pledged Stock which are readily available to the Lender, and specifically because a public sale
thereof may be impossible or impracticable by reason of certain restrictions under the Securities
Act of 1933, as amended, or under applicable Blue Sky or other state

-5-

 

securities laws as now or hereafter in effect, the Pledgor agrees that the Lender may from
time to time attempt to sell all or any part of the Pledged Stock by means of a private placement
restricting the offering or sale to a limited number of prospective purchasers who meet suitability
standards the Lender deems appropriate and who agree that they are purchasing for their own
accounts for investment and not with a view to distribution, and the Lender’s acceptance of the
highest offer obtained therefrom shall be deemed to be a commercially reasonable disposition of the
Pledged Stock. The Pledgor agrees that any such private placement may be at prices and on terms
less favorable to the Lender or the seller than if sold at public sales, and therefore recognizes
and confirms that such private sales shall not be deemed to have been made in a commercially
unreasonable manner solely because they were made privately. The Pledgor agrees that the Lender
has no obligation to delay the sale of any such securities for the period of time necessary to
permit the Issuers to register such securities for public sale under the Securities Act. The
Pledgor further agrees to use all reasonable efforts to do or cause to be done all such other acts
as may be necessary to make any sale or sales of all or any portion of the Pledged Collateral
pursuant to this Section 9(c) valid and binding and in compliance with any and all other
applicable law. The Lender or its assigns may purchase all or any part of the Pledged Stock and
any purchaser thereof shall thereafter hold the same absolutely free from any right or claim of any
kind. To the fullest extent permitted by law, the Lender shall not be obligated to make any such
sale pursuant to notice (other than notice to the Pledgor in the manner described in Section
9(b) hereof) and may, without notice or publication, adjourn any public or private sale by
announcement at the time and place fixed for the sale, and such sale may be held at any time or
place to which the same may be adjourned. If any of the Pledged Stock is sold by the Lender upon
credit or for future delivery, the Lender shall not be liable for the failure of the purchaser to
pay for the same and, in such event, the Lender may resell such Pledged Stock and the Pledgor shall
continue to be liable to the Lender for the full amount of the Obligations to the extent the Lender
does not receive full and final payment in cash therefor.

          (d) The Lender shall have the sole right to determine the order in which Obligations shall be
deemed discharged by the application of the proceeds of Pledged Stock or any other property or
money held hereunder or any amount realized thereon.

     10. Certain Representations and Warranties. The Pledgor represents and warrants,
(and, with respect to clause (e) below, covenants), except as set forth on Schedule 10
hereto, to the Lender that:

          (a) All shares of Pledged Stock are fully paid, duly and properly issued, nonassessable and
owned by the Pledgor free and clear of any lien or encumbrance of any kind whatsoever, except those
granted to the Lender, and the Pledged Stock constitutes all or, in the case of Europa, sixty-five
percent (65%) of the outstanding securities of any class or kind of the Issuers owned by the
Pledgor.

          (b) No effective financing statement or other instrument similar in effect covering all or any
part of the Pledged Collateral is on file in any recording office, other than such financing
statement naming the Lender, as a secured party.

          (c) The pledge of the Pledged Collateral pursuant to this Agreement creates a valid and
perfected security interest in the Pledged Collateral, securing the payment of the

-6-

 

Obligations, and all filing and other actions necessary or desirable to perfect and protect
such security interest have been or, concurrently herewith, will be duly made or taken.

          (d) No authorization, approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required for (i) the pledge by the Pledgor of the
Pledged Collateral pursuant to this Agreement, the grant by the Pledgor of the assignment or
security interest granted hereby or the execution, delivery or performance of this Agreement by the
Pledgor, (ii) the perfection of the Lender’s security interest in the Pledged Collateral or
exercise by the Lender of its rights and remedies provided for in this Agreement, or (iii) the
exercise by the Lender of the voting or other rights provided for in this Agreement or the remedies
in respect of the Pledged Collateral pursuant to this Agreement (except as may be required in
connection with the disposition of the Pledged Stock by laws affecting the offering and sale of
securities generally).

          (e) The Pledgor has full right, power and authority to enter into this Agreement and to grant
the security interest in the Pledged Collateral made hereby, and this Agreement constitutes the
legal, valid and binding obligation of the Pledgor enforceable against the Pledgor in accordance
with its terms, except as the enforceability thereof may be (i) limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforceability of creditors’ rights
generally, and (ii) subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).

     11. Indemnity and Expenses. (a) The Pledgor agrees to indemnify the Lender from and
against any and all claims, damages, losses, liabilities and expenses incurred by the Lender
arising out of, or in connection with, or resulting from, a breach by the Pledgor of any
representation, warranty, covenant or agreement contained in this Agreement.

          (b) The Pledgor agrees promptly upon the Lender’s demand to pay or reimburse the Lender for
all expenses (including, without limitation, reasonable fees and disbursements of counsel) incurred
by the Lender in connection with (i) the Lender’s enforcement of remedies under this Agreement,
(ii) the custody or preservation of the Pledged Collateral, (iii) any actual or attempted sale or
exchange of, or any enforcement, collection, compromise or settlement respecting, the Pledged
Collateral or any other property or money held hereunder, and any other action taken by the Lender
hereunder whether directly or as attorney-in-fact pursuant to the power of attorney herein
conferred, (iv) the failure by the Pledgor to perform or observe any of the provisions hereof, or
(v) any action taken by the Lender pursuant to this Agreement. All such expenses shall be deemed a
part of the Obligations for all purposes of this Agreement and the Lender may apply the Pledged
Collateral or any other property or money held hereunder to payment of or reimbursement for such
expenses after notice and demand to the Pledgor.

     12. Lender May Perform. If the Pledgor fails to perform any agreement contained
herein, the Lender may, but shall not be obligated to, perform, or cause performance of, such
agreement, and the expenses of the Lender incurred in connection therewith shall be payable by the
Pledgor.

-7-

 

     13. Waivers and Amendment. The rights and remedies given hereby are in addition to
all others however arising, but it is not intended that any right or remedy be exercised in any
jurisdiction in which such exercise would be prohibited by law. No action, failure to act or
knowledge of the Lender shall be deemed to constitute a waiver of any power, right or remedy
hereunder, nor shall any single or partial exercise thereof preclude any further exercise thereof
or the exercise of any other power, right or remedy. Any right or power of the Lender hereunder
respecting the Pledged Collateral and any other property or money held hereunder may at the option
of the Lender be exercised as to all or any part of the same and the term the “Pledged Collateral”
wherever used herein, unless the context clearly requires otherwise, shall be deemed to mean (and
shall be read as) “the Pledged Collateral and any other property or money held hereunder or any
part thereof.” This Agreement shall not be amended nor shall any right hereunder be deemed waived
except by a written agreement signed by the Lender expressly setting forth the amendment or waiver.
Each amendment, modification or waiver shall be effective only in the specific instance and for
the specific purpose for which it was given.

     14. Continuing Security Interest; Assignments. This Agreement shall create a
continuing security interest in the Pledged Collateral and shall (i) remain in full force and
effect until the Pledged Collateral is released in accordance herewith, (ii) be binding upon the
Pledgor and its successors and assigns, and (iii) inure, together with the rights and remedies of
the Lender hereunder, to the benefit of the Lender, its successors and assigns. Without limiting
the generality of the foregoing clause (iii), the Lender may assign or otherwise transfer all or
any portion of its rights and obligations under this Agreement to any other Person, and such other
Person shall thereupon become vested with all the benefits in respect hereof granted to the Lender
herein; the Lender shall, however, retain all of its rights and powers with respect to any part of
the Pledged Collateral not transferred. Any agent or nominee of the Lender shall have the benefit
of this Agreement as if named herein and may exercise all the rights and powers given to the Lender
hereunder.

     15. APPLICABLE LAW. THIS AGREEMENT 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.

     16. Notices. Unless otherwise specifically provided herein, all notices hereunder
shall be in writing addressed to the respective party as set forth below and may be personally
served, telecopied or sent by overnight courier service or United States mail and shall be deemed
to have been given: (a) if delivered in person, when delivered; (b) if delivered by telecopy, on
the date of transmission if transmitted on a Business Day before 4:00 p.m. Eastern standard time
or, if not, on the next succeeding Business Day; (c) if delivered by overnight courier, two (2)
days after delivery to such courier properly addressed; or (d) if by U.S. Mail, four (4) Business
Days after depositing in the United States mail, with postage prepaid and properly addressed.

	 	(a)	 	If to Pledgor, to:
	 
	 	 	 	DRI Corporation

-8-

 

	 	 	 	13760 Noel Road, Suite 830

Dallas, Texas 75240

Attention: Steven P. Slay

Facsimile: (214) 378-8437
	 
	 	 	 	With a copy to:
	 
	 	 	 	Gray, Layton, Kersh, Solomon, Sigmun,

Furr & Smith, P.A.

516 South New Hope Road

P.O. Box 2636

Gastonia, North Carolina 28053

Attn: David Furr, Esq.

Facsimile:
	 
	 	(b)	 	If to Lender, to:
	 
	 	 	 	BHC Interim Funding, L.P.

444 Madison Avenue, 25th Floor

New York, NY 10022

Attention: The Managing Partners

Facsimile: (212) 753-7730

	 
	 	 	 	With a copy to:
	 
	 	 	 	Blank Rome LLP

The Chrysler Building

405 Lexington Avenue

New York, NY 10174

Attention: George N. Abrahams, Esq.

Facsimile: (212) 885-5001

or at such other address as the party addressed shall have previously designated by written notice
to the serving party, given in accordance with this Section 16.

     17. CONSENT TO JURISDICTION. THE PLEDGOR 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 THE LENDER’S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS, SHALL BE LITIGATED IN SUCH COURTS. THE
PLEDGOR 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 AGREEMENT OR THE OTHER LOAN DOCUMENTS. IF THE PLEDGOR PRESENTLY IS, OR IN THE FUTURE BECOMES,
A NONRESIDENT OF

-9-

 

THE STATE OF NEW YORK, THE PLEDGOR HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND
AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON THE PLEDGOR BY CERTIFIED OR REGISTERED
MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO THE PLEDGOR, AT THE PLEDGOR’S ADDRESS AS SET FORTH IN
SECTION 16 HEREOF OR AS MOST RECENTLY NOTIFIED BY THE PLEDGOR TO THE LENDER IN WRITING AND
SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED AS AFORESAID.

     18. WAIVER OF JURY TRIAL. EACH OF THE PLEDGOR AND THE LENDER HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR THE OTHER LOAN DOCUMENTS. EACH OF THE PLEDGOR AND THE LENDER ACKNOWLEDGE THAT THIS
WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED
ON THE WAIVER IN ENTERING INTO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS AND THAT EACH WILL
CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH OF THE PLEDGOR AND THE
LENDER FURTHER WARRANTS AND REPRESENTS 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.

     19. Severability; Entire Agreement. (a) The invalidity, illegality or
unenforceability in any jurisdiction of any provision in or obligation under this Agreement shall,
as to such jurisdiction, not affect or impair the validity, legality or enforceability of the
remaining provisions or obligations under this Agreement or of such provision or obligation in any
other jurisdiction.

          (b) This Agreement constitutes the entire understanding and agreement between the parties, and
replaces any other or prior agreements or undertakings, with respect to the subject matter hereof,
and there are no other agreements or undertakings, oral or written, respecting such subject matter
which are intended to have any force or effect after the execution hereof.

     20. Termination. This Agreement shall remain in full force and effect until the date
upon which the Lender shall have received payment and satisfaction in full of the Obligations and
the termination of the Loan and Security Agreement.

     21. Miscellaneous. This Agreement shall be binding upon and shall inure to the
benefit of the Pledgor and the Lender and their respective successors, trustees, and assigns,
except that the Pledgor shall not assign its rights or obligations hereunder without the prior
written consent of the Lender. Section headings used herein are for convenience only and shall not
affect the meaning or construction of any of the provisions hereof.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

-10-

 

     IN WITNESS WHEREOF, the Pledgor has caused this Agreement to be executed by its duly
authorized officer as of the day and year first above written.

	 	 	 	 	 	 	 
	 	 	DRI CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:  

Title:   
	 	/S/ DAVID L. TURNEY
 

David L. Turney

CEO/President
	 	 

ACKNOWLEDGEMENT 

     The undersigned hereby acknowledges all of the rights granted to the Lender under the
foregoing Agreement and agrees to take all actions necessary to effectuate said rights and the
purposes of the Agreement including, without limitation, performance of any acts requested by the
Lender pursuant to the terms thereof.

	 	 	 	 	 
	 	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 	 
	 
	 	ROBINSON TURNEY INTERNATIONAL, INC.

 	 
	 	By:  	/S/ DAVID L. TURNEY
 	 
	 	 	Name:  	  David L. Turney  	 
	 	 	Title:  	    CEO/President 	 
	 
	 	DRI EUROPA AB

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

 

 

Accepted and agreed:

	 	 	 	 	 
	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	 	 

 

 

SCHEDULE 2(A)

DESCRIPTION OF PLEDGED STOCK

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Percentage	 	Percent	 	Certificate
	Issuer	 	Owned	 	Pledged	 	Number
	Digital Recorders, Inc.
	 	 	100	%	 	 	100	%	 	 	1	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	TwinVision of North
America, Inc.
	 	 	100	%	 	 	100	%	 	 	1	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Robinson Turney
International, Inc.
	 	 	100	%	 	 	100	%	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	DRI Europa AB
	 	 	100	%	 	 	65	%	 	 	1-1001	 

 

 

SCHEDULE 4

RESTRICTIONS ON TRANSFERS

None

 

 

SCHEDULE 5

LIENS

None

 

 

SCHEDULE 10

EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES

Laurus Master Fund, Ltd. has a current pledge on shares, which will be released at Closing

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