<PAGE> 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)
<PAGE> 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
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<TABLE>
<CAPTION>
Reg. S-K
Exhibit No. Description Item No.
- ----------- ----------- --------
<S> <C> <C>
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
</TABLE>
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
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Reg. S-K
Exhibit No. Description Item No.
- ----------- ----------- --------
<S> <C> <C>
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
</TABLE>
<PAGE> 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: [email protected]
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.
<PAGE> 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."
<PAGE> 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-
<PAGE> 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
<PAGE> 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
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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
<PAGE> 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
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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
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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
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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
<PAGE> 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.
<PAGE> 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.
<PAGE> 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
<PAGE> 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
<PAGE> 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
