-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Bpjuf00f3l9ihCCRckCv8TbHZJ+78IkxO50Y18i9mZUvsL1XrZVRvRkkxpx2c0t1 YckX7jyg/tBVUShFj0pVJQ== 0000950144-98-009104.txt : 19980806 0000950144-98-009104.hdr.sgml : 19980806 ACCESSION NUMBER: 0000950144-98-009104 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19980701 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980805 SROS: BSE SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: DIGITAL RECORDERS INC CENTRAL INDEX KEY: 0000853695 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 561362926 STATE OF INCORPORATION: NC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-13408 FILM NUMBER: 98677321 BUSINESS ADDRESS: STREET 1: 2300 ENGLEERT DRIVE STREET 2: SUITE B CITY: DURHAM STATE: NC ZIP: 27713 BUSINESS PHONE: 9193612155 MAIL ADDRESS: STREET 1: 2300 ENGLERT DRIVE STREET 2: SUITE B CITY: DURHAM STATE: NC ZIP: 27713 8-K 1 DIGITAL RECORDERS 8-K 7-1-1998 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K -------------- CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of Earliest Event Reported): JULY 1, 1998 -------------- DIGITAL RECORDERS, INC. (Exact name of registrant as specified in its charter) NORTH CAROLINA 1-13408 56-1362926 (State of Incorporation) (Commission File No.) (I.R.S. Employer Identification No.) 2300 ENGLERT DRIVE, SUITE B DURHAM, NORTH CAROLINA 27713 (Address of principal executive offices) (919) 361-2155 (Registrant's telephone number, including area code) 2 ITEM 5. OTHER EVENTS On July 1, 1998, Digital Recorders, Inc. (the "Company"), Robinson Turney International, Inc. ("RTI"), Digital Recorders Acquisition, Inc., a wholly owned subsidiary of the Company (the "Subsidiary") and David L. Turney and Claude G. Robinson, the two shareholders of RTI (the "Shareholders") consummated an Agreement and Plan of Reorganization (the "Agreement") pursuant to which the Subsidiary merged into RTI (the "Merger"). A disinterested majority of the directors voting with respect to the transaction approved the Merger on behalf of the Company. Pursuant to the Merger, 200,000 restricted shares of the Company's Common Stock were issued to the Shareholders. For two years commencing July 1, 1998, the Shareholders have the right to include their shares on any registration statement which the Company files to register any of its securities under the Securities Act of 1933, as amended (the "Act"), in connection with a public offering for cash proceeds payable in whole or in part to the Company. After July 1, 1998 and before January 1, 1999, the Shareholders also have been granted the right to demand that the Company file a registration statement under the Act covering the 200,000 shares of Common Stock issued to them in the Merger. RTI is engaged in business development, marketing services, advisory services, and merger, acquisition and financing assignments for selected clients, including the Company, who are primarily in the transit and transportation equipment industries. On effectiveness of the Merger, RTI assigned a sublicense agreement and marketing agreement between RTI and TwinVision, Inc. to the Company and also assigned a management services agreement between RTI and Transit Media GmbH to the Company. Mr. Turney served as the Chairman of the Board and the Chief Executive Officer of RTI since he and Mr. Robinson co-founded RTI in August 1994. Their respective employment agreements with RTI were cancelled on effectiveness of the Merger. Mr. Turney has served as the Company's Chairman of the Board and Chief Executive Officer since April 1998 and as a director since May 1996. The Company entered into a consulting agreement with Mr. Robinson, commencing July 1, 1998 and extending through June 30, 1999 which maybe extended one additional year upon same terms and conditions at the mutual agreement of the Company and Mr. Robinson, to provide services for the manufacturing and operational support of the Company. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (a) Not applicable. (b) Not applicable. (c) The following exhibits are furnished herewith in accordance with the provisions of Item 601 of Regulation S-B: 2 3
Reg. S-K Exhibit No. Description Item No. - ----------- ----------- -------- 2.3 Agreement and Plan of Reorganization among Robinson Turney 2 International, Inc., the Company, Digital Recorders Acquisition, Inc., a wholly owned subsidiary of the Company, and the shareholders of Robinson Turney International, Inc. 2.4 Registration Rights Agreement among the Company, David L. 2 Turney and Claude G. Robinson 2.5 Claude G. Robinson Consulting Agreement 2 2.6 Shareholder Acknowledgement 2
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. DIGITAL RECORDERS, INC. Date: August 5, 1998 By: /s/ David L. Turney ---------------------------------------- David L. Turney, Chairman of the Board, Chief Executive Officer and President 3 4 EXHIBIT INDEX
Reg. S-K Exhibit No. Description Item No. - ----------- ----------- -------- 2.3 Agreement and Plan of Reorganization among Robinson Turney 2 International, Inc., the Company, Digital Recorders Acquisition, Inc., a wholly owned subsidiary of the Company, and the shareholders of Robinson Turney International, Inc. 2.4 Registration Rights Agreement among the Company, David L. Turney 2 and Claude G. Robinson 2.5 Claude G. Robinson Consulting Agreement 2 2.6 Shareholder Acknowledgement 2
EX-2.3 2 AGREEMENT AND PLAN OF REORGANIZATION 1 EXHIBIT 2.3 FOR IMMEDIATE RELEASE CONTACT: DIGITAL RECORDERS, INC. DAVID L. TURNEY, CHAIRMAN AND CHIEF EXECUTIVE OFFICER (919) 361-2155, EXT. 120 EMAIL: DAVET@DIGREC.COM Robinson-Turney International Merged Into Digital Recorders, Inc. CEO DAVID L. TURNEY AGREES TO FOUR-YEAR EMPLOYMENT CONTRACT RESEARCH TRIANGLE PARK, N.C. - (July 2, 1998) Digital Recorders, Inc. (NASDAQ-Small Cap: TBUS), a high-technology microelectronics company and developer of digital communications systems, today announced that a letter of intent has been signed to acquire Robinson Turney International (RTI), a business marketing and technology firm. In a separate announcement, David L. Turney, a co-founder of RTI, accepted a four-year employment contract as CEO of Digital Recorders, Inc. RTI, a Dallas-based firm, is an international business and market development firm engaged in technology development, mergers, acquisitions, business development, marketing and other services for transit and transportation equipment manufacturers, operators and suppliers. RTI has business interests in both the United States and Europe; Digital Recorders is an RTI client. RTI is owned by David L. Turney and Claude G. Robinson, a Grand Rapids-area transit industry professional. 2 Page Two The acquisition, expected to be completed by the end of July, will be accomplished as a pooling of interests under which RTI shareholders will receive 200,000 shares of Digital Recorders common stock. DRI management expects the transaction to be accretive. Separately, DRI announced that Chairman and Chief Executive Officer David L. Turney has entered into a four-year employment agreement. With more than 14 years experience in the core transit and transportation markets served by Digital Recorders, Turney served as group executive of the Transportation Products Group for Mark IV Industries Inc., a Fortune 500 company listed on the New York Stock Exchange. At Mark IV Industries (NYSE: IV), Mr. Turney founded the Transportation Products Group and guided it to more than $150 million in sales. Turney has been a DRI director since May 1996 and, through RTI, is responsible for Digital Recorders' acquisition of Transit-Media GmbH and the start-up of TwinVision, Inc., the first LED illuminated electronic flip-dot destination sign in European and American markets. Concerning the RTI merger, Turney said: "This merger will allow RTI to work more closely with the Digital Recorders organization both on internal growth of the existing business as well as through acquisitions." 3 Page Three Headquartered in Research Triangle Park, NC, Digital Recorders is ranked in the "Technology Fast 500" by Deloitte and Touche LLP from a base of all United States technology companies including private and life science companies. The company is a market leader in transit, transportation and law enforcement digital communications systems using proprietary software applications. Digital Recorders develops technologically advanced digital communications systems for transit, transportation and law enforcement applications. The company's transit and transportation systems include the TALKING BUS(R), an on-vehicle voice messaging and passenger information system and the TwinVision(R) LeDot Destination Sign System - a proprietary, electronic external destination sign. In addition, the company's Digital Audio Company subsidiary is a leading supplier of proprietary Digital Signal Processing systems for voice enhancements to law enforcement agencies worldwide. Customers include transit agencies and bus manufacturers; municipalities; federal, state and local departments of transportation and law enforcement agencies. -end- EX-2.4 3 REGISTRATION RIGHTS AGREEMENT 1 EXHIBIT 2.4 REGISTRATION RIGHTS AGREEMENT THIS REGISTRATION RIGHTS AGREEMENT dated as of July ___, 1998 by and among DIGITAL RECORDERS, INC., a North Carolina corporation (the "Company") and Messrs. DAVID L. TURNEY and CLAUDE G. ROBINSON (the "Holders"). The parties agree as follows: SECTION 1. DEFINITIONS. For purposes of this Agreement: (a) "Common Stock" means the Company's Common Stock, $.10 par value; (b) "Registrable Securities" means 200,000 shares of Common Stock to be issued to the Holders upon closing of that certain Merger described in an Agreement and Plan of Reorganization of even date (the "Agreement"; certain terms not defined herein but used herein are used as defined in the Agreement); (c) "register" and "registration" refer to a registration of the Registrable Securities effected by filing a registration statement or similar document pursuant to the Securities Act of 1933, as amended (the "Act") and the declaring or ordering of effectiveness of such registration statement; and (d) The "Company" means Digital Recorders, Inc., a North Carolina corporation. SECTION 2. DEMAND REGISTRATION. (a) If at any time after July 1, 1998 and before January 1, 1999, the Company receives a written request from a majority of the Holders that the Company file a registration statement under the Act covering the registration of Registrable Securities held by them, then the Company shall, subject to the limitations of this Section 2, use its best efforts to, within six months of the date of such request, effect the registration under the Act of all Registrable Securities and will keep such registration statement effective for a minimum period of 24 months thereafter. The Company shall be obligated to effect only one (1) registration pursuant to this Section 2(a). (b) If the Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to this Section 2. The Holders shall (together with the Company as provided in Section 3) enter into an underwriting agreement in customary form with a mutually acceptable underwriter or underwriters. SECTION 3. "PIGGYBACK" RIGHTS. For a period of two years from July 1, 1998, and if (but 2 without any obligation to do so) the Company proposes to register any of its securities under the Act in connection with a public offering of such common stock for cash proceeds payable in whole or in part to the Company (other than with respect to a Registration Statement filed on Form S-8 or Form S-4 or such other similar form then in effect under the Securities Act), the Company shall, at such time, subject to the provisions of Section 6 and 7 hereof and upon request of the Holders cause to be registered under the Act all of the Registrable Securities which the Holders request be registered; provided, however, if the managing underwriter of the public offering of shares proposed to be registered by the Company advises the Holders in writing that marketing factors require a limitation of the number of shares to be underwritten, then the number of shares of Registrable Securities of the Holders that may be included in the underwriting shall be so limited pro rata. Such "piggyback rights" shall expire on the registration and sale of the Registrable Securities pursuant to Section 2 above or upon the sale of the Registrable Securities hereunder, but in no event later than July 1, 2000. SECTION 4. REGISTRATION PROCEDURE. Whenever required under this Agreement to effect the registration of any Registrable Securities, the Company shall, as expeditiously as is reasonably possible: (a) Furnish to the Holders of the Registrable Securities covered by such registration statement such number of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Act, and such other documents as they may reasonably request in order to facilitate the disposition of the Registrable Securities owned by them. (b) In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter of such offering. The Holders participating in such underwriting shall also enter into and perform their obligations under such agreement. (c) Notify the Holders of Registrable Securities covered by such registration statement, at any time when a prospectus relating thereto covered by such registration statement is required to be delivered under the Act, of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing. SECTION 5. FURNISH INFORMATION. The Holders shall promptly furnish to the Company in writing such reasonable information regarding the Holders, the Registrable Securities held by the Holders, and the intended method of disposition of such securities as shall be required to effect the registration of their Registrable Securities. SECTION 6. EXPENSES OF REGISTRATION. All of the foregoing expenses relating to 2 3 the Registrable Securities incurred in connection with registration, filing or qualification pursuant to this Agreement, including (without limitation) all registration, filing and qualification fees, printers' bills, mailing and delivery expenses, accounting fees, and the fees and disbursements of counsel for the Company, but excluding underwriting discounts or fees, shall be borne by the Company. SECTION 7. INDEMNIFICATION AND CONTRIBUTION. In the event any Registrable Securities are included in a registration statement under this Agreement: (a) To the extent permitted by law, the Company will indemnify and hold harmless each Holder, the officers and directors of each Holder, any underwriter (as defined in the Act) for such holder, and each person, if any, who controls such Holder or underwriter within the meaning of the Act or the Securities Exchange Act of 1934 (the "Exchange Act"), against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages, or liabilities (or actions in respect thereto) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; and the Company will reimburse each such Holder, officer or director, underwriter or controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability, or action; provided however, that the indemnity agreement contained in this Section 7(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for any such loss, claim, damage, liability, or action to the extent that it arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement, preliminary prospectus or final prospectus or any amendment or supplement thereto in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by any such Holder, underwriter or controlling person; provided, further, however, that if any losses, claims, damages or liabilities arise out of or are based upon any untrue statement, alleged untrue statement, omission or alleged omission contained in any preliminary prospectus, and made in reliance upon and in conformity with written information furnished by such Holder expressly for use therein, which did not appear in the final prospectus, the Company shall not have any such liability with respect thereto to such Holder, any person who controls such Holder within the meaning of the Act, or any director of such Holder, if such Holder delivered a copy of the preliminary prospectus to the person alleging such losses, claims, damages or liabilities and failed to deliver a copy of the final prospectus, as amended or supplemented if it has been amended or 3 4 supplemented, to such person at or prior to the written confirmation of the sale to such person, provided that such Holder had an obligation to deliver a copy of the final prospectus to such person; and (b) To the extent permitted by law, each selling Holder will indemnify and hold harmless the Company, each of its directors, each of its officers who has signed the registration statement, each person, if any, who controls the Company within the meaning of the Act, any underwriter and any other Holder selling securities in such registration statement or any of its directors or officers or any person who controls such Holder or underwriter against any losses, claims, damages or liabilities, joint or several) to which the Company or any such director, officers, controlling person, or underwriter or controlling person, or other such Holder or director, officer or controlling person may become subject, under the Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, if the untrue statement or omission or alleged untrue statement or omission in respect of which such loss, claim, damage or liability is asserted was made in reliance upon and in conformity with written information furnished by such Holder expressly for use in connection with such registration; and each such Holder will reimburse any legal or other expenses reasonably incurred by the Company or any such director, officer, controlling person, underwriter or controlling person, or other Holder, officer, director, or controlling person in connection with investigating or defending any such loss, claim, damage, liability or action; provided however, that the indemnity agreement contained in this Section 7(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action, if such settlement is effected without the consent of the Holder (which consent shall not be unreasonably withheld); provided, further that the maximum liability of any selling Holder under this Section 7(b) in regard to any registration statement shall in no event exceed the amount of the proceeds received by such selling Holder from the sale of securities under such registration statement; provided, further however, that if any losses, claims, damages or liabilities arise out of or are based upon an untrue statement, alleged untrue statement, omission or alleged omission contained in any preliminary prospectus which did not appear in the final prospectus, such seller shall not have any such liability with respect thereto to the Company, any person who controls the Company within the meaning of the Act, any officer of the Company who signed the registration statement or any director of the Company, if the Company delivered a copy of the preliminary prospectus to the person alleging such losses, claims, damages or liabilities and failed to deliver a copy of the final prospectus, as amended or supplemented if it has been amended or supplemented, to such person at or prior to the written confirmation of the sale to such person, provided 4 5 that the Company had an obligation to deliver a copy of the final prospectus to such person. (c) Promptly after receipt by an indemnified party under this Section 7 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 7, deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly notified, to assume the defense thereof with counsel mutually satisfactory to the parties. An indemnified party shall have the right to retain its own counsel, however, the fees and expenses of such counsel shall be at the expense of the indemnified party, unless (i) the employment of such counsel has been specifically authorized in writing by the indemnifying party, (ii) the indemnifying party has failed to assume the defense and employ counsel, or (iii) the named parties to any such action (including any impleaded parties) include both the indemnified party and the indemnifying party, and the indemnified party shall have been advised by such counsel that there may be one or more legal defenses available to it which are different from or additional to those available to the indemnifying party (in which case the indemnifying party shall not have the right to assume the defense of such action on behalf of such indemnified parry, it being understood, however, that the indemnifying party shall not, in connection with any one such action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys for all indemnified parties). The failure to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party under this Agreement. (d) If the indemnification provided for in this Section 7 is unavailable or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages or liabilities or actions in respect thereof referred to therein, then each indemnifying party shall in lieu of; indemnifying such indemnified party contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or actions in such proportion as is appropriate to reflect the relative fault of the Company, on the one hand, and selling Holders, on the other, in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or actions as well as any other relevant equitable considerations, including the failure to give any required notice. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company, on the one hand, or by such selling Holders on the other, and the parties' relative intent, knowledge, 5 6 access to information and opportunity to correct or prevent such statement or omission. The parties hereto acknowledge and agree that it would not be just and equitable if contribution pursuant to this subparagraph (d) were determined by prorata allocation (even if all of the selling Holders were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subparagraph (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or actions in respect thereof referred to above in this subparagraph (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subparagraph (d), the amount the selling Holders shall be required to contribute shall not exceed the amount, if any, by which the total price at which the securities sold by each of them were offered to the public exceeds the amount of any damages which they would have otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission, or other violation of law. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of fraudulent misrepresentation SECTION 8. MISCELLANEOUS. (a) Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of the Company and to the Holders and their respective heirs, personal representatives, successors and assigns. (b) Notices. Except as otherwise provided herein, any notice, consent or request to be given in connection with any term or provision of this Agreement shall be deemed to have been given sufficiently if sent by hand, registered or certified mail, postage prepaid, facsimile transmission or courier (next day delivery), to the Company or to the Holders at their respective addresses as provided on or about the date hereof. (c) Integration. This Agreement contains the entire agreement between the parties with respect to the transactions contemplated hereby and no party shall be bound by, nor shall any party be deemed to have made, any covenants, representations, warranties undertakings or agreements except those contained in such entire Agreement. The section and paragraph headings contained in this Agreement are for the reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. (d) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which 6 7 together shall constitute one and the same agreement. (e) Amendment. This Agreement may be amended, changed, waived or terminated only in writing signed by each of the parties. IN WITNESS WHEREOf, this Agreement has been executed effective as of the date first above written. DIGITAL RECORDERS, INC. By --------------------------------- President HOLDERS: (SEAL) ----------------------------- DAVID L. TURNEY (SEAL) ----------------------------- CLAUDE G. ROBINSON 7 EX-2.5 4 CLAUDE G ROBINSON CONSULTING AGREEMENT 1 EXHIBIT 2.5 STATE OF NORTH CAROLINA COUNTY OF WAKE CONSULTANT AGREEMENT AGREEMENT, made this __1st_ day of July, 1998, by and between ROBINSON TURNEY INTERNATIONAL, INC., (hereinafter called "Company") and CLAUDE G. ROBINSON - ROBINSON ASSOCIATES, (hereinafter called "Consultant"): R E C I T A L WHEREAS, Company desires to retain the services of Consultant in an advisory capacity with regard to Company's manufacturing and related operations; and WHEREAS, Consultant desires to accept such engagement upon the terms and conditions hereinafter set forth; NOW THEREFORE, in consideration of the mutual covenants herein contained and for other good and valuable considerations, the parties agree as follows: 1. Term: The Company shall retain Consultant and Consultant accepts such engagement on the terms and conditions herein contained. The term of this Agreement and the retainage of Consultant is for one (1) year from the date hereof, unless sooner terminated pursuant to Section 8. This Agreement may be extended for additional one (1) year terms upon the same terms and conditions as apply herein at the mutual agreement of the parties. 2. Compensation: Company agrees to pay Consultant for his services Thirty-Six Thousand Dollars ($36,000.00) per year. Such compensation shall be paid in equal amounts on or before the last day of each month. Additionally, Consultant shall be reimbursed reasonable and agreed out-of-pocket expenses incurred while discharging duties assigned herein. 3. Duties: During the term of this Agreement, Consultant shall provide services for the manufacturing and operational support of Company and shall perform general consulting services required or requested of him by the President of the Company. A reasonable and agreed amount of Consultant's time, attention, and energies shall be diligently devoted to the business of Company. Time required and agreed over and above same shall be at rates to be determined and negotiated at the time. 4. Nonsolicitation of Customers and Employees: Consultant undertakes and agrees that during the term of this Agreement and for a period of six (6) months after this Agreement shall be terminated, whether voluntarily or involuntarily, he will not, without the prior written approval of the Company, solicit any of the customers, suppliers, licensees, franchisors, franchisees, or other business relations with regard to a competitive service or product, or solicit any employees of Company with regard to working for a competitor. 2 2 In the event Company shall establish to the satisfaction of a court of competent jurisdiction the existence of a breach or threatened breach by Consultant of any of the provisions of this section, the Company, in addition to any other rights and remedies it may have, shall be entitled to an injunction restraining the Consultant from doing or continuing to do any such act in violation of this section, as well as attorney's fees and costs of prosecution to enforce this Agreement. 5. Disclosure of Confidential Information: (a) Non-disclosure. Except as required in his duties to the Company, the Consultant will never, directly or indirectly, use, disseminate, disclose, lecture upon, or publish articles concerning any Confidential Information. Confidential Information shall be defined as information developed by or disclosed to the Consultant or known by the Consultant as a consequence of or through his employment by the Company, not generally known in the industry in which the Company is or may become engaged, about the Company's products, processes, and services, including information and trade secrets relating to research, development, formulas and recipes, inventions, manufacture, profitability, purchasing, accounting, engineering, marketing, merchandising, and selling. (b) Confidential Papers. Upon termination of this relationship with the Company, all documents, records, notebooks, and similar repositories of or containing Confidential Information, including copies thereof, then in the Consultant's possession, whether prepared by him or others, will be left with the Company. (c) Confidential Information. As part of the consideration required of him under this Agreement, the Consultant agrees that he will not, at any time either during the term of this Agreement or thereafter, divulge to any person, firm, or corporation any information received by him during the course of his relationship with regard to the personnel, financial, or other affairs of the Company and all such information shall be kept confidential and shall not in any manner be revealed to anyone. (d) Customer Names. As part of the consideration for the making of this Agreement, the Consultant agrees that he will not, at any time during the term of this Agreement or thereafter, divulge to any person, firm, or corporation any name or names of any or all of the customers or suppliers of the Company. (e) In the event the Company shall establish to the satisfaction of a court of competent jurisdiction the existence of a breach or threatened breach by the Consultant of any of the provisions of this Section 5, the Company, in addition to any other rights and remedies it may have, shall be entitled to an injunction restraining the Consultant from doing or continuing to do any such act in violation of this Section 5. 6. Company Defined. The provisions of Sections 4-5 shall apply not only to Company, but also to any affiliates, assigns, subsidiaries or parent of Company or a Company or business managed by Company, as now exists or may exist. 3 3 7. Representation of Relationship. Consultant hereby represents and warrants that he has not entered into a written contract of employment or consulting that would affect or void this contract. Consultant further agrees that he will serve as an independent representative of the parties and that this agreement shall not be construed as any form of employment, partnership or joint venture agreement between the parties. 8. Termination of Relationship. Company may terminate this contract at any time, without notice, where cause for such termination exists. Termination for cause shall mean termination because of Consultant's personal dishonesty, physical or mental impairment preventing Consultant from performing his duties and obligations herein, breach of fiduciary duty involving personal profit, negligent or intentional failure to perform stated duties, willful violation of any law, rule, or regulation (other than traffic violations or similar offenses) or final cease and desist order, engagement in any business or personal activity which tends to discredit Company or is detrimental to Company or its business relationships, or a breach of any provision of this Agreement. In the event Consultant is terminated for cause, Consultant shall have no right to receive future compensation or bonuses except that which may have accrued to but not been paid to Consultant prior to such termination or cessation of employment. 9. Assignment. The rights and obligations of Company under this Agreement shall inure to the benefit of and shall be binding upon its successors and assigns. 10. Notices. All notices, requests, demands and other communications hereunder must be in writing and shall be deemed to have been duly given if mailed by first class, registered mail, return receipt requested, postage and registry fees prepaid and addressed as follows: (a) To the Company Robinson Turney International, Inc. 800 East Campbell Road, Suite 199 Richardson, TX 75081 (b)To the Consultant Claude G. Robinson - Robinson Associates 6475 28th Street, S.E., Suite 325 Grand Rapids, MI 49546 Either party by notice in writing mailed to the other as hereunder provided may change the address to which future notices to such party shall be mailed. 11. Entire Agreement. This instrument contains the entire agreement of the parties relating to Consultant's relationship with Company. 12. Jurisdiction. This Agreement is being entered into within the State of Texas, and it is agreed that all of the terms and conditions hereof shall be interpreted accordingly to the laws of the State of Texas or the federal laws of the United States as they may 4 4 otherwise apply. 13. Severability. If any clause, term, or provision of this Agreement is declared or held invalid by any court of competent jurisdiction, such declaration or holding shall not affect the validity of any other term, clause, or provision herein contained. 14. Duplicate Originals. This Agreement is executed in duplicate originals, one of such shall be retained by each of the parties. IN WITNESS WHEREOF, the parties have executed this agreement as of the day and years first above written. ROBINSON TURNEY INTERNATIONAL, INC. By -------------------------------------- President (SEAL) ---------------------------------- CLAUDE G. ROBINSON - ROBINSON ASSOCIATES EX-2.6 5 SHAREHOLDER ACKNOWLEDGEMENT 1 EXHIBIT 2.6 SHAREHOLDER ACKNOWLEDGEMENT THIS ACKNOWLEDGEMENT dated the ____ day of ___________, 1998 by DAVID L. TURNEY and CLAUDE ROBINSON, shareholders of Robinson Turney International, Inc. With respect to the Agreement and Plan of Reorganization by and among Robinson Turney International, Inc, Digital Recorders, Inc., and Digital Recorders Acquisition, Inc. (the "Agreement"), the undersigned acknowledge: (i) That he knows or has had the opportunity to acquire all information concerning the business affairs, financial condition, plans and prospects of Digital Recorders, Inc. that he deems relevant to make a fully informed decision respecting the acquisition of the Digital Recorders, Inc. shares; (ii) That he has been encouraged and has had the opportunity to rely upon the advice of legal counsel and accountants and other advisers with respect to the acquisition of the Digital Recorders, Inc. shares; and (iii) That he has had the opportunity to ask such questions and receive such answers and information respecting, among other things, the business, affairs, financial condition, plans and prospects of Digital Recorders, Inc. and the terms and conditions of the acquisition of the Digital Recorders, Inc. shares as he has requested so as to more fully understand his investment. Without limiting the foregoing, the undersigned acknowledges that he has been provided complete copies of all of the information identified on Schedule 3.2(g) of said Agreement. IN WITNESS WHEREOF, this Shareholder Acknowledgement has been executed the day and year first above written. (SEAL) ----------------------------- DAVID L. TURNEY (SEAL) ----------------------------- CLAUDE ROBINSON -----END PRIVACY-ENHANCED MESSAGE-----