EXHIBIT 99.6 SHARE PURCHASE AGREEMENTBy and BetweenLITE VISION CORPORATION, |
SHARE PURCHASE AGREEMENTSHARE PURCHASE AGREEMENT, dated as of ___________, 2002, by and between LITE VISION Corporation, a corporation organized in Taiwan (the “Buyer”), on the one hand, and DIGITAL RECORDERS, INC., a North Carolina corporation (“DRI”) on the other. W I T N E S S E T H: WHEREAS, on or about April 3, 2002, the Buyer and DRI entered into a letter of understanding (the “Letter”), which describes the general terms on which DRI would sell to Buyer 100,000 restricted shares of DRI Common Stock, par value $.10 per share, of DRI (the “Shares”) in exchange for Buyer reducing the liability owed it from DRI’s subsidiary, Transit Media Gmbh by $300,000.00; and WHEREAS, the Letter contemplates that the parties will enter into a definitive agreement and prepare such other documentation as the parties and their respective legal counsel determine is appropriate; and WHEREAS, the parties intend that this Share Purchase Agreement (the “Agreement”), together with the schedules, exhibits and other documents attached hereto, serve as the definitive agreement between the parties with respect to the transactions described in the Letter; NOW, THEREFORE, in consideration of the covenants, representations, warranties and mutual agreements herein set forth, the Buyer and DRI hereby agree as follows: ARTICLE I |
(b) At the Closing, DRI shall deliver to the Buyer certificates representing the Shares against delivery by the Buyer to DRI of the Purchase Price. Certificates for the securities comprising the Shares shall be registered in such name or names and in such authorized denominations as the Buyer may request in writing at least five full business days prior to the Closing Date. Section 1.3 Registration Rights. The parties hereby agree that the Registration Rights Agreement dated the ____ day of June, 1998 and as amended on November __, 2000, (collectively the “Registration Rights Agreement”), incorporated by reference herein, shall apply to the Shares. Pursuant to the Registration Rights Agreement, the Buyer shall have the right to have the Shares included on a registration statement filed by the Company (other than on a Form S-4, Form S-8 or any successor form) during the term of the Agreement. Buyer agrees that 50,000 of the Shares will not be traded for a period of six (6) months. The remaining 50,000 Shares will not be traded for a period of twelve (12) months. The Registration Rights Agreement gives Buyer “piggy back” rights. Also, if DRI does not have another registration with the Securities Exchange Commission on which Buyer can “piggy back”, DRI will extend its best commercial efforts to undertake a registration upon Buyer’s demand anytime after April 30, 2003. ARTICLE II |
(a) Evidence that Transit Media Gmbh’s account was reduced by $300,000 pursuant to Section 1.2(a) hereof; (b) Evidence of compliance with United States securities laws for shareholders owning in excess of 5% of a publicly held entity; and (c) Such other documents, instruments and certificates of the officers of the Buyer as may be reasonably requested by DRI. Section 2.4 Further Assurances.DRI shall execute and deliver on the Closing Date or thereafter any and all such other instruments, and take or cause to be taken all such further action as may be necessary or appropriate to vest fully and confirm to the Buyer title to and possession of the Shares delivered hereunder by DRI. ARTICLE III |
(d) DRI has good and marketable title to all of its properties and assets carried on the DRI Financial Statements and such properties and assets are subject to no material mortgage, pledge, lien, security interest, claim or other encumbrance except (i) as disclosed in the DRI Financial Statements and the notes thereto, or except as otherwise disclosed in this Agreement, or in writing to Buyer, (ii) as may arise in the ordinary course of business, or (iii) the interest of a lessor under any non-capital lease. (e) Except as otherwise described on Exhibit B hereto, since March 31, 2002, there has been no material change in the nature of the business of DRI, nor in its financial condition or property, and DRI has incurred no material obligations or liabilities or made any commitments other than as disclosed in DRI Financial Statements or as otherwise disclosed on Exhibit B hereto. Moreover, since March 31, 2002, there has been no damage, destruction or loss or other occurrence or other development (whether or not insured against) which either singly or in the aggregate materially adversely affects DRI and DRI’s executive officers have no knowledge of any threatened occurrence or development which would materially adversely affect the properties or assets or the business or operations of DRI. (f) Except as disclosed in Exhibit C hereto, DRI is not a party to any employment agreement with any of its officers, directors or shareholders, or to any lease, agreement or other commitment, nor to any pension, insurance, profit sharing or bonus plan. (g) Except as otherwise disclosed on Exhibit D hereto, DRI is not a party to any litigation, pending or threatened, nor has any claim been made or, to the best knowledge of DRI’s executive officers, asserted against DRI nor are there any proceedings threatened or pending before any federal, state or municipal government, or any department, board, body or agency thereof, involving DRI. (h) DRI is not in violation or default of any provision of its Articles of Incorporation or Bylaws or of any provision of any instrument or contract to which it is party or by which it is bound or, to the best knowledge of its executive officers, of any provision of any federal, state or local judgment, writ, decree, order, law, statute, rule or government regulation, applicable to it. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby will not result in any such violation or be in conflict with or constitute, with or without the passage of time and giving of notice, either a violation or default under any such provision or an event which results in the creation of any lien, charge or encumbrance upon any asset of DRI. DRI has all requisite power and authority to execute, deliver and perform this Agreement and has all requisite power and authority to execute and deliver the certificates representing the Shares. All necessary corporate proceedings of DRI have been duly taken to authorize the execution, delivery and performance by DRI of this Agreement. This Agreement has been duly authorized, executed and delivered by DRI, is the legal, valid and binding obligation of DRI, and is enforceable as to DRI in accordance with its terms. No consent, authorization, approval, order, license, certificate, or permit of or from, or declaration or filing with, any federal, state, local or other governmental authority or any court or other tribunal is required by DRI for the execution, delivery or performance by DRI of this Agreement. No consent of any party to any contract, agreement, instrument, lease, license, arrangement or understanding to which DRI is a party, or to which any of its properties or assets are subject, is required for the execution, delivery or performance of this Agreement. 4 |
(i) Since March 31, 2002, DRI has not, except as disclosed in Exhibit E hereto, and prior to the Closing, DRI will not have (i) paid or declared any dividends on or made any distributions in respect of, or purchased or redeemed, any of the outstanding shares of its capital stock or issued any additional shares of its capital stock; or (ii) made or authorized any amendments to its Articles of Incorporation, or to its By-Laws; or (iii) mortgaged or pledged or subjected to any lien, charge or other encumbrance, any of its assets, tangible or intangible; or (iv) sold, leased, transferred or contracted to sell, lease or transfer any material assets, tangible or intangible, or entered into any other transactions outside of the ordinary course of business; (v) made any loan or advance to or become obligated as guarantor or otherwise on behalf of any officer, director or shareholder of DRI or to any other person, firm or corporation; (vi) paid any compensation to any officer or director (in their capacities as such) other than in the ordinary course of business; (vii) suffered any labor trouble; (viii) made or become a party to any contract or commitment or renewed, extended, amended or modified any contract or commitment which in any case involved an amount in excess of $100,000 or a term in excess of 180 days, except in the ordinary course of business; (ix) become bound or entered into any contract, commitment or transaction other than in the ordinary course of business or except as otherwise contemplated by this Agreement; or (x) waived any rights which alone or in the aggregate are material to DRI. (j) The authorized capitalization of DRI consists of 10,000,000 shares of Common Stock, par value $.10 per share and 1,000,000 shares of Preferred Stock, par value $.10 per share. As of the date hereof, 3,704,475 shares of Common Stock have been duly authorized and validly issued and are outstanding, fully paid and nonassessable, and 354 shares of Preferred Stock are issued or outstanding. The Shares, when issued in accordance with the terms and conditions of this Agreement. Except as described in Exhibit F hereto or as may be contemplated by this Agreement, DRI has no commitments or obligations of any nature whatsoever to issue, deliver or sell under any preemptive rights, offer, stock option agreement, bonus agreement or purchase plan, stock incentive compensation plan, conversion right, contingent share agreement or otherwise, any Common Stock or Preferred Stock. (k) Except as set forth in Exhibit G hereto, to the best knowledge of DRI’s executive officers, DRI has not infringed, and is not now infringing upon, any trademark, trade name, service mark or copyright belonging to any other person, firm or corporation. DRI is not a party to any license agreement, or any other agreement with respect to any trademark, service mark, trade names or applications for same or any copyrights, except as disclosed in Exhibit G hereto. To the best of its knowledge after reasonable inquiry, and except as disclosed on Exhibit G hereto, DRI owns or holds adequate licenses or rights to use all trademarks, service marks, trade names, or copyrights used in the business as now conducted by it and such use does not, and will not, infringe upon or otherwise violate the rights of others in a manner which might have a material adverse effect on DRI. 5 |
ARTICLE IV |
(d) All corporate action on the part of the Buyer, its officers, directors and shareholders necessary for the authorization, execution and delivery of this Agreement and the performance of all obligations of the Buyer hereunder has been taken and this Agreement constitutes a valid and legally binding obligation of the Buyer enforceable in accordance with its terms, subject to bankruptcy, insolvency and other laws of general application relating to or affecting creditors’ rights, and general principles of equity. (e) The Buyer has provided DRI with full and complete access to information concerning all material aspects of, and information with respect to, the Buyer. All information which has been communicated by the Buyer to DRI with respect to the business and operations of the Buyer are true, correct and complete in all material respects. (f) The Buyer is acquiring the Shares upon payment for and delivery thereof, not with a view to the distribution or public resale thereof within the meaning of the 1933 Act. The Buyer further agrees that DRI may cause to be set forth on the certificates for the Shares to be delivered to the Buyer hereunder a legend in substantially the following form: |
These securities have not been registered under the Securities Act of 1933, as amended, and may be offered and sold only if registered pursuant to the provisions of that Act or if, in the opinion of counsel to the seller an exemption from registration thereunder is available, the availability of which must be established to the satisfaction of DRI. |
DRI shall not be obligated to recognize any purported transfer by the Buyer of the Shares unless accompanied by an opinion of the Buyer’s counsel in form and substance satisfactory to counsel for DRI to the effect that such transfer is not in violation of the 1933 Act. ARTICLE V |
(d) Use reasonable efforts to preserve intact its present business organization and to keep available the services of its present officers and employees; (e) Not amend its charter or By-Laws; (f) Not take any action or engage in any transaction which would cause any of the representations made by DRI herein to be untrue as of the Closing Date or would cause DRI to be in breach of the terms and conditions of this Agreement; (g) Maintain its books of account in its usual, regular and ordinary manner; (h) Comply with all registration, filing and reporting requirements of the 1934 Act; (i) Maintain a listing of the Common Stock with The Nasdaq Stock Market, Inc.; (j) Not issue any shares of its capital stock, except upon the exercise of any currently outstanding option, warrant, convertible security or similar right which is described in Exhibit G hereto; or (k) Not increase, decrease, or exchange any of its outstanding Common Stock for a different number or class of securities through reorganization, reclassification, share dividend, share split, or similar change in the capitalization of DRI. Section 5.2 Access and Information.DRI shall give to the Buyer and its representatives full access at all reasonable times prior to the Closing to the properties, books and records of DRI and to furnish such information and documents in its possession relating to DRI as the Buyer may reasonably request. Section 5.3 Information Following Closing.For a period of two years after the Closing, DRI shall furnish Buyer, without charge, such of the following documents as may be requested by Buyer: (i) As soon as practicable after they have been filed with the Commission, one copy of each annual and interim financial and other report or communication filed with the Commission; and (ii) Such additional documents and information with respect to DRI and its affairs as the Buyer may from time to time reasonably request. ARTICLE VI |
(a) No government regulatory body or agency shall have instituted court action or legal proceedings seeking preliminary or permanent injunctive relief prohibiting purchase of the Shares. (b) The performance of all conditions precedent to Closing set forth in Articles VII and VIII below. (c) From the date of this Agreement to the Closing Date, there shall have been no material adverse change (i) in the business or properties of DRI, or (ii) in the financial condition of DRI, and the property, business and operations of DRI shall have not been materially and adversely affected due to any fire, accident or other casualty or by any act of God, whether or not insured. ARTICLE VII |
ARTICLE VIII |
(i) DRI is a corporation duly organized, validly existing and in good standing under the laws of North Carolina. |
(ii) The Company is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction, if any, in which the ownership or leasing of its properties and assets or the conduct of its business requires such qualification, except where the failure to be so qualified or be in good standing would not have a material adverse effect on the condition (financial or otherwise), earnings, operations, business or business prospects of the Company taken as a whole. DRI has all corporate power and authority necessary to engage in the business in which it is presently engaged and to execute, deliver and perform its obligations under this Agreement. There are no options, puts, calls, or other rights outstanding to purchase or sell DRI’s securities, other than as contemplated in this Agreement or as disclosed in the Annexes or Exhibits hereto. |
(iii) DRI’s authorized capitalization consists of 10,000,000 shares of Common Stock, par value $.10 per share, and 1,000,000 shares of Preferred Stock, par value $.10 per share. At the Closing Date and prior to the issuance of the Shares, and as described in Exhibit E hereto, there will be 3,704,475 shares of Common Stock issued and outstanding, and 354 shares of Preferred Stock issued and outstanding. All of such outstanding shares of capital stock have been duly authorized and are validly issued and are fully paid and nonassessable. |
(iv) Execution and delivery of this Agreement and the consummation of the transactions contemplated thereby have been duly and validly authorized by all necessary action, corporate or otherwise, by DRI. This Agreement is legal, valid and binding obligations of DRI, enforceable against DRI in accordance with its terms except as enforcement may be limited by general equitable principles or bankruptcy, insolvency or similar laws affecting creditors’ rights generally. DRI has all requisite power and authority to execute, deliver and perform this Agreement. All necessary corporate proceedings of DRI have been taken to authorize the execution, delivery and performance by DRI of this Agreement. |
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(v) There are no preemptive rights to acquire DRI’s Common Stock or Preferred Stock. |
(vi) The Shares, when issued in accordance with the terms and conditions of this Agreement, will be duly authorized, validly issued, fully paid and nonassessable and will be free and clear of any adverse claim, security interest, lien, pledge, option, encumbrance or restriction whatever; provided, however, that the Shares will be “restricted securities” as such term is defined under the 1933 Act (unless registered for sale as described in the Registration Rights Agreement) and the certificates representing the Shares will contain a legend to reflect such status; and provided further that the Buyer’s status as an “affiliate” as defined under the 1933 Act may subject the Buyer to certain restrictions as provided in the 1933 Act, the 1934 Act, or the rules and regulations thereunder. |
(vii) To the best knowledge of such counsel, DRI is not in violation or default of any provision of its Articles of Incorporation or ByLaws or of any provision of any instrument or contract to which it is party or by which it is bound or, of any provision of any federal, state or local judgment, writ, decree, order, law, statute, rule or government regulation, applicable to it. To the best knowledge of such counsel, the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby will not result in any such violation or be in conflict with or constitute, with or without the passage of time and giving of notice, either a violation or default under any such provision or an event which results in the creation of any lien, charge of encumbrance upon any asset of DRI. No consent, authorization, approval, order, license, certificate, or permit of or from, or declaration or filing with any federal, state, local or other governmental authority or any court or other tribunal is required by DRI for the execution, delivery or performance by DRI of this Agreement. To the best knowledge of such counsel, no consent of any party to any contract, agreement, instrument, lease, license, arrangement or understanding to which DRI is a party, or to which any of its properties or assets are subject, is required for the execution, delivery or performance of this Agreement. |
(viii) The offer and sale of the Shares are exempt from the registration requirements of Section 5 of the 1933 Act. |
(ix) Except as disclosed in this Agreement or the Exhibits hereto, such counsel is not aware of any pending or threatened action, suit, proceeding or investigation before any court or any public, regulatory, or governmental agency, authority or body, involving DRI or any of its existing officers or directors and such counsel do not know of any legal matter or government proceedings regarding DRI. |
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In rendering such an opinion, counsel for DRI may rely (i) as to matters of fact, to the extent they deem proper, on certificates of responsible officers of DRI; and (ii) to the extent they deem proper, upon written statements or certificates of officers of departments of various jurisdictions having custody of documents respecting the corporate existence or good standing of DRI, provided that copies of any such statements or certificates shall be delivered to counsel for the Buyer. (d) DRI shall have performed and complied with all the terms and conditions required by this Agreement to be performed or complied with by it on or before the Closing. ARTICLE IX |
ARTICLE X |
Section 11.2 Notice of Proceeding.If any action is brought against DRI, the Buyer or any of their officers, directors, employees, agents or counsel, or any controlling persons (an “Indemnified Party” or collectively “Indemnified Parties”), in respect of which indemnity may be sought against the other party (the “Indemnifying Party”) pursuant to the foregoing paragraph, such Indemnified Party or Parties shall promptly notify the Indemnifying Party in writing of the institution of such action (but the failure so to notify shall not relieve the Indemnifying Party from any liability it may have) and the Indemnifying Party shall promptly assume the defense of such action including the employment of counsel satisfactory to such Indemnified Party or Parties and payment of expenses. Such Indemnified Party or Parties shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties, unless the employment of such counsel shall have been authorized in writing by the Indemnifying Party in connection with the defense of such action or the Indemnifying Party shall not have promptly employed counsel satisfactory to the Indemnified Party or Parties to have charge of the defense of such action or such Indemnified Party or Parties shall have reasonably concluded that there may be one or more legal defenses available to it or them or other indemnified parties which are different from or additional to those available to the Indemnifying Party, in any of which events such fees and expenses shall be borne by the Indemnifying Party and the Indemnifying Party shall not have the right to direct the defense of such action on behalf of the Indemnified Party or Parties. Anything in this paragraph to the contrary notwithstanding, the Indemnifying Party shall not be liable for any settlement of any claim or action effected without its written consent. Section 11.3 Contribution.To provide for just and equitable contribution if (i) an Indemnified Party makes a claim for indemnification pursuant to the language set forth in Sections 11.1 and 11.2 above, but it is found in a final judicial determination, not subject to further appeal, that such indemnification may not be enforced in such case, even though this Agreement expressly provides for indemnification in such case, or (ii) any Indemnified Parties seek contribution under the 1933 Act, the 1934 Act, or otherwise, then the parties shall contribute to any and all losses, liabilities, claims, damages and expenses whatsoever to which any of them may be subject, in accordance with the relative fault of the parties in connection with the facts which result in such losses, liabilities, claims, damages and expenses. The relative fault, in the case of an untrue statement, alleged untrue statement, omission or alleged omission, shall be determined by, among other things, whether such statement, alleged statement, omission or alleged omission relates to information supplied by DRI or the Buyer, the parties’ relative intent, knowledge, access to information and the opportunity to correct such statement, alleged statement, omission or alleged omission. The parties agree that it would be unjust and inequitable if the respective obligations of each of the parties for contribution were determined by prorata or per capita allocation of the aggregate losses, liabilities, claims, damages and expenses or by any other method of allocation that does not reflect the equitable considerations referred to herein. No persons guilty of a fraudulent misrepresentation within the meaning of Section 11 (f) of the 1933 Act shall be entitled to contribution from any person who is not guilty of such fraudulent misrepresentation. 14 |
ARTICLE XII |
If to DRI: | Digital Recorders, Inc. 5949 Sherry Lane; Suite 1050 Dallas, TX 75225 |
With a copy to: | Mr. David M. Furr Gray, Layton, Kersh, Solomon, Sigmon, Furr & Smith, P.A. Post Office Box 2636 Gastonia, NC 28053-2636 |
If to the Buyer: | Lite Vision Corporation 5th Floor, No. 539-3, Chung-Chen Road Hsin-Tien City, Taipei Hsien Taiwan, R.O.C. |
or to any other address or addresses which may hereafter be designated by any party by notice given in such manner. All notices shall be deemed to have been given as of the date of receipt. ARTICLE XIII |
In the event that the Buyer or any of its Representatives is requested or required (by oral question or request for information or documents in legal proceedings, interrogatories, subpoena, civil investigative demand or similar process) to disclose any information supplied to the Buyer in the course of its dealings with DRI or its Representatives, it is agreed that the Buyer will provide DRI with prompt notice of any request or requirement so that either the Buyer or DRI or both of them may seek an appropriate protective order and/or, by mutual written agreement, waive the Buyer’s compliance with the provisions of this Agreement. It is further agreed that if, in the absence of a protective order or receipt of a waiver, the Buyer or any of its Representatives is nonetheless, in the reasonable written opinion of its counsel, compelled to disclose information concerning DRI to any court or else stand liable for contempt or suffer other censure, the Buyer or such Representative may disclosure such information to such court. In any event, the Buyer will not oppose action by, and will cooperate with, DRI to obtain an appropriate protective order or other reliable assurance that confidential treatment will be accorded to such information. The term “Confidential Material” does not include information (i) which was known to the Buyer or that the Buyer had in its possession prior to the disclosure of confidential information by DRI hereunder, (ii) which becomes generally available to the public other than as a result of a disclosure by the Buyer or its Representatives, (iii) which becomes available to the Buyer on a nonconfidential basis from a source other than DRI or its Representatives, provided that such source is not bound by a confidentiality agreement with DRI or its Representatives or otherwise prohibited from transmitting the information to the Buyer by a contractual, legal or fiduciary obligation, or (iv) which otherwise becomes known to the Buyer in a manner which does not violate the proprietary rights of DRI. Any of the Confidential Material shall be the property of DRI and, upon request of DRI, all such Confidential Material shall be returned to DRI or furnished to DRI without the Buyer retaining any copy thereof. DRI shall be entitled to seek any relief as may be necessary to enforce the terms of this Article XIV in the event of a breach by the Buyer or its Representatives. ARTICLE XV |
ARTICLE XVI |
ARTICLE XX |
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed the day and year first above written. |
THE BUYER: LITE VISION CORPORATION By —————————————— Print Name: —————————————— Title: —————————————— |
ATTEST: |
DRI: DIGITAL RECORDERS, INC. By —————————————— Print Name: —————————————— Title: —————————————— |
ATTEST: 19 |
TABLE OF ATTACHMENTS |
Exhibit | Section Reference | Article and Description |
---|---|---|
A | Article III(c)(ii) | DRI Financial Statements |
B | Article III(e) | Material Changes or Commitments in DRI’s Business |
C | Article III(f) | Material Agreements |
D | Article III(g) | Litigation |
E | Article III(i) | Dividends, Distributions, Disbursements and other material changes of DRI |
F | Article III(j) | Commitments to issue Common Stock |
G | Article III(k) | Infringement Exceptions and License Agreements |
H | Article III(b) | Subsidiaries of DRI |
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EXHIBIT A |
EXHIBIT B |
1 | Resignation of General manager of DR-Talking Bus division (Tanya L. Johnson) |
2 |
3 |
No change has occurred in the financial condition of DRI except as follows: |
1 |
2 |
3 |
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EXHIBIT C |
EXHIBIT D |
EXHIBIT E |
I. | Dividends: None |
II. | Changes to Articles or By-laws: none |
III. | Mortgage or Pledge of Assets: none |
IV. | Sale of Assets: none |
V. | Loans, Advances, Guarantees: none |
VI. | Compensation Paid by Officers and Directors Outside of the Ordinary Course: none |
VII. | Labor trouble: none |
VIII. | Contracts in Excess of $100,000: none |
IX. | Contracts Outside Ordinary Course of Business: none |
X. | Waiver of Material Rights: none |
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EXHIBIT F |
EXHIBIT G |
EXHIBIT H |