Exhibit 10.2

 

BORROWER:  CXR LARUS CORPORATION

 

GUARANTOR: EMRISE CORPORATION

 

GUARANTY

 

To:          BRIDGE BANK, N.A.

 

1.     The Guaranty.  For valuable consideration, the undersigned (“Guarantor”)
hereby unconditionally guarantees and promises to pay promptly to Bridge Bank,
N.A. (“Lender”), or order, in lawful money of the United States, any and all
Indebtedness of CXR LARUS CORPORATION (“Borrower”) to Lender when due, whether
at stated maturity, upon acceleration or otherwise, and at all times
thereafter.  The liability of Guarantor under this Guaranty is not limited as to
the principal amount of the Indebtedness guaranteed and includes, without
limitation, liability for all interest, fees, indemnities (including, without
limitation, hazardous waste indemnities), and other costs and expenses relating
to or arising out of the Indebtedness.  The liability of Guarantor is continuing
and relates to any Indebtedness, including that arising under successive
transactions which shall either continue the Indebtedness or from time to time
renew it after it has been satisfied.  This Guaranty is cumulative and does not
supersede any other outstanding guaranties, and the liability of Guarantor under
this Guaranty is exclusive of Guarantor’s liability under any other guaranties
signed by Guarantor.  If more than one individual or entity sign this Guaranty,
their obligations under this Guaranty shall be joint and several.

 

2.     Definitions.  As used herein:

 

(a)   “Borrower” means the individual or the entity named in Paragraph 1 of this
Guaranty and, if more than one, then any one or more of them.

 

(b)   “Guarantor” means the individual or the entity signing this Guaranty and,
if more than one, then any one or more of them, jointly and severally.

 

(c)   “Indebtedness” means any and all debts, liabilities, and obligations of
Borrower to Lender, now or hereafter existing, whether voluntary or involuntary
and however arising, whether direct or indirect or acquired by Lender by
assignment, succession, or otherwise, whether due or not due, absolute or
contingent, liquidated or unliquidated, determined or undetermined, held or to
be held by Lender for its own account or as agent for another or others, whether
Borrower may be liable individually or jointly with others, whether recovery
upon such debts, liabilities, and obligations may be or hereafter become barred
by any statute of limitations, and whether such debts, liabilities, and
obligations may be or hereafter become otherwise unenforceable.  Indebtedness
includes, without limitation, any and all obligations of Borrower to Lender for
reasonable attorneys’ fees and all other costs and expenses incurred by Lender
in the collection or enforcement of any debts, liabilities, and obligations of
Borrower to Lender.

 

3.     Obligations Independent.  The obligations hereunder are independent of
the obligations of Borrower or any other guarantor, and a separate action or
actions may be brought and prosecuted against Guarantor whether action is
brought against Borrower or any other guarantor or whether Borrower or any other
guarantor be joined in any such action or actions.  Anyone executing this
Guaranty shall be bound by its terms without regard to execution by anyone else.

 

4.     Rights of Lender.  Guarantor authorizes Lender, without notice or demand
and without affecting its liability hereunder, from time to time to: (a) renew,
compromise, extend, accelerate, or otherwise change the time for payment, or
otherwise change the terms, of the Indebtedness or any part thereof, including
increase or decrease of the rate of interest thereon, or otherwise change the
terms of the Indebtedness; (b) receive and hold security for the payment of this
Guaranty or any Indebtedness and exchange, enforce, waive, release, fail to
perfect, sell, or otherwise dispose of any such security; (c) apply such
security and direct the order or manner of sale thereof as Lender in its
discretion may determine; and (d) release or substitute any Guarantor or any one
or more of any endorsers or other guarantors of any of the Indebtedness.

 

5.     Guaranty to be Absolute.  Guarantor agrees that until the Indebtedness
has been paid in full and any commitments of Lender or facilities provided by
Lender with respect to the Indebtedness have been terminated, Guarantor shall
not be released by or because of the taking, or failure to take, any action that
might in any manner or to any extent vary the risks of Guarantor under this
Guaranty or that, but for this paragraph, might discharge or otherwise reduce,
limit, or modify Guarantor’s obligations under this Guaranty.  Guarantor waives
and surrenders any defense to any liability under this Guaranty based upon any
such action, including but not limited to any action of Lender described in the

 

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immediately preceding paragraph of this Guaranty.  It is the express intent of
Guarantor that Guarantor’s obligations under this Guaranty are and shall be
absolute and unconditional.

 

6.     Guarantor’s Waivers of Certain Rights and Certain Defenses.  Guarantor
waives: (a) any right to require Lender to proceed against Borrower, proceed
against or exhaust any security for the Indebtedness, or pursue any other remedy
in Lender’s power whatsoever; (b) any defense arising by reason of any
disability or other defense of Borrower, or the cessation from any cause
whatsoever of the liability of Borrower; (c) any defense based on any claim that
Guarantor’s obligations exceed or are more burdensome than those of Borrower;
and (d) the benefit of any statute of limitations affecting Guarantor’s
liability hereunder.  No provision or waiver in this Guaranty shall be construed
as limiting the generality of any other waiver contained in this Guaranty.

 

7.     Waiver of Subrogation.  Until the Indebtedness has been paid in full and
any commitments of Lender or facilities provided by Lender with respect to the
Indebtedness have been terminated, Guarantor waives any right of subrogation,
reimbursement, indemnification, and contribution (contractual, statutory, or
otherwise) including, without limitation, any claim or right of subrogation
under the Bankruptcy Code (Title 11, United States Code) or any successor
statute, arising from the existence or performance of this Guaranty, and
Guarantor waives any right to enforce any remedy which Lender now has or may
hereafter have against Borrower, and waives any benefit of, and any right to
participate in, any security now or hereafter held by Lender.

 

8.     Waiver of Notices.  Guarantor waives all presentments, demands for
performance, notices of nonperformance, protests, notices of protest, notices of
dishonor, notices of intent to accelerate, notices of acceleration, notices of
any suit or any other action against Borrower or any other person, any other
notices to any party liable on the Indebtedness (including Guarantor), notices
of acceptance of this Guaranty, and notices of the existence, creation, or
incurring of new or additional Indebtedness.

 

9.     General Partner Liability and Waivers of Other Rights and Defenses.

 

(a)   If Borrower is a partnership and Guarantor is a general partner of that
partnership, then Guarantor shall not be liable under this Guaranty for any
portion of the Indebtedness which is secured by real property; provided,
however, that Guarantor shall remain liable under partnership law for all the
Indebtedness.

 

(b)   Guarantor waives any rights and defenses that are or may become available
to Guarantor by reason of Sections 2787 to 2855, inclusive, of the California
Civil Code.

 

(c)   Guarantor waives all rights and defenses that Guarantor may have because
any of the Indebtedness is secured by real property.  This means, among other
things:  (i) Lender may collect from Guarantor without first foreclosing on any
real or personal property collateral pledged by Borrower; and (ii) if Lender
forecloses on any real property collateral pledged by Borrower:  (1) the amount
of the Indebtedness may be reduced only by the price for which that collateral
is sold at the foreclosure sale, even if the collateral is worth more than the
sale price, and (2) Lender may collect from Guarantor even if Lender, by
foreclosing on the real property collateral, has destroyed any right Guarantor
may have to collect from Borrower.  This is an unconditional and irrevocable
waiver of any rights and defenses Guarantor may have because any of the
Indebtedness is secured by real property.  These rights and defenses include,
but are not limited to, any rights or defenses based upon Section 580a, 580b,
580d, or 726 of the California Code of Civil Procedure.

 

(d)   Guarantor waives any right or defense it may have at law or equity,
including California Code of Civil Procedure Section 580a, to a fair market
value hearing or action to determine a deficiency judgment after a foreclosure.

 

10.   Security.  To secure all of Guarantor’s obligations hereunder, Guarantor
assigns and grants to Lender a security interest in all moneys, securities, and
other property of Guarantor now or hereafter in the possession of Lender, all
deposit accounts of Guarantor maintained with Lender, and all proceeds thereof. 
Upon default or breach of any of Guarantor’s obligations to Lender, Lender may
apply any deposit account to reduce the Indebtedness, and may foreclose any
collateral as provided in the Uniform Commercial Code and in any security
agreements between Lender and Guarantor.

 

11.   Subordination.  Any obligations of Borrower to Guarantor, now or hereafter
existing, including but not limited to any obligations to Guarantor as subrogee
of Lender or resulting from Guarantor’s performance under this Guaranty, are
hereby subordinated to the Indebtedness.  In addition to Guarantor’s waiver of
any right of subrogation as set forth in this Guaranty with respect to any
obligations of Borrower to Guarantor as subrogee of Lender, Guarantor agrees
that, if Lender so requests, Guarantor shall not demand, take, or receive from
Borrower, by setoff

 

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or in any other manner, payment of any other obligations of Borrower to
Guarantor until the Indebtedness has been paid in full and any commitments of
Lender or facilities provided by Lender with respect to the Indebtedness have
been terminated.  If any payments are received by Guarantor in violation of such
waiver or agreement, such payments shall be received by Guarantor as trustee for
Lender and shall be paid over to Lender on account of the Indebtedness, but
without reducing or affecting in any manner the liability of Guarantor under the
other provisions of this Guaranty.  Any security interest, lien, or other
encumbrance that Guarantor may now or hereafter have on any property of Borrower
is hereby subordinated to any security interest, lien, or other encumbrance that
Lender may have on any such property.

 

12.   Revocation of Guaranty.

 

(a)   Guarantor absolutely, unconditionally, knowingly, and expressly waives any
right to revoke this Guaranty as to future Indebtedness and, in light thereof,
all protection afforded Guarantor under Section 2815 of the California Civil
Code.  Guarantor fully realizes and understands that, upon execution of this
agreement, Guarantor will not have any right to revoke this Guaranty as to any
future Indebtedness and, thus, may have no control over such Guarantor’s
ultimate responsibility for the Indebtedness.  If, contrary to the express
intent of this agreement, any such revocation is effective notwithstanding the
foregoing waiver, Guarantor acknowledges and agrees that:  (a) no such
revocation shall be effective until written notice thereof has been received by
Lender; (b) no such revocation shall apply to any Indebtedness in existence on
such date (including any subsequent continuation, extension, or renewal thereof,
or change in the interest rate, payment terms, or other terms and conditions
thereof); (c) no such revocation shall apply to any Indebtedness made or created
after such date to the extent made or created pursuant to a legally binding
commitment of Lender which is, or is believed in good faith by Lender to be, in
existence on the date of such revocation; (d) no payment by Borrower, or from
any other source, prior to the date of such revocation shall reduce the
obligations of such Guarantor hereunder; and (e) any payment by Borrower or from
any source other than such Guarantor, subsequent to the date of such revocation,
shall first be applied to that portion of the obligations, if any, as to which
the revocation by such Guarantor is effective (and which are not, therefore,
guarantied by such Guarantor hereunder), and, to the extent so applied, shall
not reduce the obligations of such Guarantor hereunder.

 

(b)   In the event of the death of a Guarantor, the liability of the estate of
the deceased Guarantor shall continue in full force and effect as to (i) the
Indebtedness existing at the date of death, and any renewals or extensions
thereof, and (ii) loans or advances made to or for the account of Borrower after
the date of the death of the deceased Guarantor pursuant to a commitment made by
Lender to Borrower prior to the date of such death.  As to all surviving
Guarantors, this Guaranty shall continue in full force and effect after the
death of a Guarantor, not only as to the Indebtedness existing at that time, but
also as to the Indebtedness thereafter incurred by Borrower to Lender.

 

(c)   Guarantor acknowledges and agrees that this Guaranty may be revoked only
in accordance with the foregoing provisions of this paragraph and shall not be
revoked simply as a result of any change in name, location, or composition or
structure of Borrower, the dissolution of Borrower, or the termination,
increase, decrease, or other change of any personnel or owners of Borrower.

 

13.   Reinstatement of Guaranty.  If this Guaranty is revoked, returned, or
cancelled, and subsequently any payment or transfer of any interest in property
by Borrower to Lender is rescinded or must be returned by Lender to Borrower,
this Guaranty shall be reinstated with respect to any such payment or transfer,
regardless of any such prior revocation, return, or cancellation.

 

14.   Stay of Acceleration.  In the event that acceleration of the time for
payment of any of the Indebtedness is stayed upon the insolvency, bankruptcy, or
reorganization of Borrower or otherwise, all such Indebtedness guaranteed by
Guarantor shall nonetheless be payable by Guarantor immediately if requested by
Lender.

 

15.   No Deductions.  All payments by Guarantor hereunder shall be paid in full,
without setoff or counterclaim or any deduction or withholding whatsoever,
including, without limitation, for any and all present and future taxes.  In the
event that Guarantor or Lender is required by law to make any such deduction or
withholding, Guarantor agrees to pay on behalf of Lender such amount directly to
the appropriate person or entity, or if the Guarantor cannot legally comply with
the foregoing, Guarantor shall pay to Lender such additional amounts as will
result in the receipt by Lender of the full amount payable hereunder.  Guarantor
shall promptly provide Lender with evidence of payment of any such amount made
on Lender’s behalf.

 

16.   Information Relating to Borrower.  Guarantor acknowledges and agrees that
it shall have the sole responsibility

 

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for, and has adequate means of, obtaining from Borrower such information
concerning Borrower’s financial condition or business operations as Guarantor
may require, and that Lender has no duty, and Guarantor is not relying on
Lender, at any time to disclose to Guarantor any information relating to the
business operations or financial condition of Borrower.

 

17.   Borrower’s Authorization.  Where Borrower is a corporation, partnership,
trust, or limited liability company, it is not necessary for Lender to inquire
into the powers of Borrower or of the officers, directors, partners, members,
managers, or agents acting or purporting to act on its behalf, and any
Indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder, subject to any limitations on Guarantor’s
liability set forth herein.

 

18.   Information Relating to Guarantor.  Guarantor authorizes Lender to verify
or check any information given by Guarantor to Lender, check Guarantor’s credit
references, verify employment, and obtain credit reports. Guarantor acknowledges
and agrees that the authorizations provided in this paragraph apply to any
individual general partner of Guarantor and to Guarantor’s spouse and any such
general partner’s spouse if Guarantor or such general partner is married and
lives in a community property state.

 

19.   Guarantor’s Covenants.  Until the Indebtedness has been paid in full and
any commitments of Lender or facilities provided by Lender with respect to the
Indebtedness have been terminated and each and every term, covenant, and
condition of this Guaranty is fully performed, Guarantor agrees:

 

(a)   to provide the following financial information and statements in form and
content acceptable to Lender, and such additional information as requested by
Lender from time to time:

 

(i)    if Guarantor is a business entity, Guarantor’s annual financial
statements upon request of Lender. These financial statements must be audited,
(with an opinion satisfactory to Lender) by a Certified Public Accountant
(“CPA”) acceptable to Lender;

 

(ii)   if Guarantor is a business entity, Guarantor’s quarterly financial
statements upon request of Lender.  These financial statements must be certified
and dated by an authorized financial officer of Guarantor;

 

(iii)  if Guarantor is an individual or a trust, Guarantor’s annual financial
statements upon request of Lender.  Such statements must be in form satisfactory
to Lender and be certified and dated by Guarantor and show Guarantor’s financial
condition.  Such statements must include, without limitation, a listing of all
assets and liabilities, a listing of all sources of income and of the uses of
income, the amount and sources of contingent liabilities, identification of
joint owners as to listed assets, and an annual projection of sources and uses
of income;

 

(iv)  if Guarantor is an individual or a trust, additional information as
requested by Lender from time to time regarding the financial condition of any
corporations, partnerships, limited liability companies, or other entities in
which Guarantor owns, directly or indirectly, a material interest; and

 

(v)   copies of Guarantor’s federal income tax return (with all forms K-1
attached) together with a statement of any contributions made by Guarantor to
any subchapter S corporation or trust, and, if requested by Lender, copies of
any extensions of the filing date.

 

20.   Taxes.  Guarantor represents and warrants that it is organized and
resident in the United States of America.  If Guarantor must make a payment
under this Guaranty, Guarantor represents and warrants that it will make the
payment from one of its U.S. resident offices to a U.S. office of Lender so that
no withholding tax is imposed on the payment.  If notwithstanding the foregoing,
Guarantor makes a payment under this Guaranty to which withholding tax applies,
then Guarantor shall pay any taxes (other than taxes on net income (a) imposed
by the country or any subdivision of the country in which Lender’s principal
office or actual lending office is located and (b) measured by the United States
taxable income Lender would have received if all payments under or in respect of
this Guaranty were exempt from taxes levied by Guarantor’s country) that are at
any time imposed on any such payments under or in respect of this Guaranty
including, but not limited to, payments made pursuant to this paragraph. 
Further, Guarantor shall also pay to Lender, on demand, all additional amounts
that Lender specifies as necessary to preserve the after-tax yield Lender would
have received if such taxes had not been imposed.

 

21.   Change of Status.  Guarantor shall not enter into any consolidation,
merger, or other combination unless Guarantor is the surviving business entity. 
Further, Guarantor shall not change its legal structure unless (a) 

 

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Guarantor obtains the prior written consent of Lender and (b) all Guarantor’s
obligations under this Guaranty are assumed by the new business entity.

 

22.   Notices.  All notices required under this Guaranty shall be personally
delivered or sent by first class mail, postage prepaid, or by overnight courier,
to the addresses on the signature page of this Guaranty, or sent by facsimile to
the fax numbers listed on the signature page, or to such other addresses as
Lender and Guarantor may specify from time to time in writing.  Notices sent by
(a) first class mail shall be deemed delivered on the earlier of actual receipt
or on the fourth business day after deposit in the U.S. mail, postage prepaid,
(b) overnight courier shall be deemed delivered on the next business day, and
(c) telecopy shall be deemed delivered when transmitted.

 

23.   Successors and Assigns.  This Guaranty (a) binds Guarantor and Guarantor’s
executors, administrators, successors, and assigns, provided that Guarantor may
not assign its rights or obligations under this Guaranty without the prior
written consent of Lender, and (b) inures to the benefit of Lender and Lender’s
indorsees, successors, and assigns.  Lender may, without notice to Guarantor and
without affecting Guarantor’s obligations hereunder, sell, assign, grant
participations in, or otherwise transfer to any other person, firm, or
corporation the Indebtedness and this Guaranty, in whole or in part.  Guarantor
agrees that Lender may disclose to any assignee or purchaser, or any prospective
assignee or purchaser, of all or part of the Indebtedness any and all
information in Lender’s possession concerning Guarantor, this Guaranty, and any
security for this Guaranty.

 

24.   Amendments, Waivers, and Severability.  No provision of this Guaranty may
be amended or waived except in writing.  No failure by Lender to exercise, and
no delay in exercising, any of its rights, remedies, or powers shall operate as
a waiver thereof, and no single or partial exercise of any such right, remedy,
or power shall preclude any other or further exercise thereof or the exercise of
any other right, remedy, or power.  The unenforceability or invalidity of any
provision of this Guaranty shall not affect the enforceability or validity of
any other provision of this Guaranty.

 

25.   Costs and Expenses.  Guarantor agrees to pay all reasonable attorneys’
fees, including allocated costs of Lender’s in-house counsel, and all other
costs and expenses which may be incurred by Lender (a) in the enforcement of
this Guaranty or (b) in the preservation, protection, or enforcement of any
rights of Lender in any case commenced by or against Guarantor or Borrower under
the Bankruptcy Code (Title 11, United States Code) or any similar or successor
statute.

 

26.   Governing Law and Jurisdiction.  This Guaranty shall be governed by and
construed under the laws of the State of California.  Guarantor irrevocably
(a) submits to the non-exclusive jurisdiction of any federal or state court
sitting in the State of California in any action or proceeding arising out of or
relating to this Guaranty and (b) waives to the fullest extent permitted by law
any defense asserting an inconvenient forum in connection therewith.  Service of
process by Lender in connection with such action or proceeding shall be binding
on Guarantor if sent to Guarantor by registered or certified mail at its address
specified below.

 

27.   Waiver of Jury Trial.  EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY
WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION ARISING UNDER ANY DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO
ANY DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW
EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR
OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A
JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A
COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.  EACH PARTY
REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER, HAS DETERMINED FOR
ITSELF THE NECESSITY TO REVIEW THE SAME WITH ITS LEGAL COUNSEL, AND KNOWINGLY
AND VOLUNTARILY WAIVES ALL RIGHTS TO A JURY TRIAL.

 

28.           Reference Provision.

 

(a)   The parties prefer that any dispute between them be resolved in litigation
subject to a Jury Trial Waiver as set forth above, but the California Supreme
Court has held that pre-dispute Jury Trial Waivers not authorized by statute are
unenforceable. This Reference Provision will be applicable until: (i) the
California Supreme Court holds that a pre-dispute Jury Trial Waiver provision is
valid or enforceable; or (ii) the California

 

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Legislature enacts a statute which becomes law, authorizing pre-dispute Jury
Trial Waivers of the type contained herein and, as a result, such waivers become
enforceable.  In addition, this Reference Provision, if not already applicable
as otherwise provided herein, will become applicable, if a Court, contrary to a
choice of law provision contained herein, holds that the laws of the State of
California apply to the Loan Documents.

 

(b)   Other than (i) nonjudicial foreclosure of security interests in real or
personal property,  (ii) the appointment of a receiver or (iii) the exercise of
other provisional remedies (any of which may be initiated pursuant to applicable
law), any controversy, dispute or claim (each, a “Claim”) between the parties
arising out of or relating to this guaranty or any other document, instrument or
agreement between the Bank and the undersigned (collectively in this Section,
the “Loan Documents”), will be resolved by a reference proceeding in California
in accordance with the provisions of Section 638 et seq. of the California Code
of Civil Procedure (“CCP”), or their successor sections, which shall constitute
the exclusive remedy for the resolution of any Claim, including whether the
Claim is subject to the reference proceeding.  Except as otherwise provided in
the Loan Documents, venue for the reference proceeding will be in the Superior
Court or Federal District Court in the County or District where the real
property, if any, is located or in a County or District where venue is otherwise
appropriate under applicable law (the “Court”).

 

(c)   The referee shall be a retired Judge or Justice selected by mutual written
agreement of the parties.  If the parties do not agree, the referee shall be
selected by the Presiding Judge of the Court (or his or her representative).  A
request for appointment of a referee may be heard on an ex parte or expedited
basis, and the parties agree that irreparable harm would result if ex parte
relief is not granted.  The referee shall be appointed to sit with all the
powers provided by law.  Pending appointment of the referee, the Court has power
to issue temporary or provisional remedies.

 

(d)   The parties agree that time is of the essence in conducting the reference
proceedings.  Accordingly, the referee shall be requested, subject to change in
the time periods specified herein for good cause shown, to (a) set the matter
for a status and trial-setting conference within fifteen (15) days after the
date of selection of the referee, (b) if practicable, try all issues of law or
fact within ninety (90) days after the date of the conference and (c) report a
statement of decision within twenty (20) days after the matter has been
submitted for decision.

 

(e)   The referee will have power to expand or limit the amount and duration of
discovery.  The referee may set or extend discovery deadlines or cutoffs for
good cause, including a party’s failure to provide requested discovery for any
reason whatsoever.  Unless otherwise ordered based upon good cause shown, no
party shall be entitled to “priority” in conducting discovery, depositions may
be taken by either party upon seven (7) days written notice, and all other
discovery shall be responded to within fifteen (15) days after service.  All
disputes relating to discovery which cannot be resolved by the parties shall be
submitted to the referee whose decision shall be final and binding.

 

(f)    Except as expressly set forth in this guaranty, the referee shall
determine the manner in which the reference proceeding is conducted including
the time and place of hearings, the order of presentation of evidence, and all
other questions that arise with respect to the course of the reference
proceeding.  All proceedings and hearings conducted before the referee, except
for trial, shall be conducted without a court reporter, except that when any
party so requests, a court reporter will be used at any hearing conducted before
the referee, and the referee will be provided a courtesy copy of the
transcript.  The party making such a request shall have the obligation to
arrange for and pay the court reporter.  Subject to the referee’s power to award
costs to the prevailing party, the parties will equally share the cost of the
referee and the court reporter at trial.

 

(g)   The referee shall be required to determine all issues in accordance with
existing case law and the statutory laws of the State of California.  The
rules of evidence applicable to proceedings at law in the State of California
will be applicable to the reference proceeding.  The referee shall be empowered
to enter equitable as well as legal relief, provide all temporary or provisional
remedies, enter equitable orders that will be binding on the parties and rule on
any motion which would be authorized in a trial, including without limitation
motions for summary judgment or summary adjudication.  The referee shall issue a
decision and pursuant to CCP §644 the referee’s decision shall be entered by the
Court as a judgment or an order in the same manner as if the action had been
tried by the Court.  The final judgment or order or from any appealable decision
or order entered by the referee shall be fully appealable as provided by law. 
The parties reserve the right to findings of fact, conclusions of laws, a
written statement of decision, and the right to move for a new trial or a
different judgment, which new trial, if granted, is also to be a reference
proceeding under this provision.

 

(h)   If the enabling legislation which provides for appointment of a referee is
repealed (and no successor

 

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statute is enacted), any dispute between the parties that would otherwise be
determined by reference procedure will be resolved and determined by
arbitration.  The arbitration will be conducted by a retired judge or Justice,
in accordance with the California Arbitration Act §1280 through §1294.2 of the
CCP as amended from time to time.  The limitations with respect to discovery set
forth above shall apply to any such arbitration proceeding.

 

(i)    EACH PARTY HERETO RECOGNIZES AND AGREES THAT ALL DISPUTES RESOLVED UNDER
THIS REFERENCE PROVISION WILL BE DECIDED BY A REFEREE AND NOT BY A JURY.  AFTER
CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS OWN
CHOICE, EACH PARTY KNOWINGLY AND VOLUNTARILY AND FOR ITS BENEFIT AGREES THAT
THIS REFERENCE PROVISION WILL APPLY TO ANY DISPUTE WHICH ARISES OUT OF OR IS
RELATED TO THIS GUARANTY.

 

29.   Remedies.  All rights and remedies provided in this Guaranty and any
instrument or agreement referred to herein are cumulative and are not exclusive
of any rights or remedies otherwise provided by law.  Any single or partial
exercise of any right or remedy shall not preclude the further exercise thereof
or the exercise of any other right or remedy.

 

30.   Severability.  The illegality or unenforceability of any provision of this
Guaranty or any instrument or agreement referred to herein shall not in any way
affect or impair the legality or enforceability of the remaining provisions of
this Guaranty or any instrument or agreement referred to herein.

 

Executed this 22nd day of October, 2010.

 

 

 

 

EMRISE CORPORATION

 

 

 

 

 

 

 

 

By:

/s/ Carmine T. Oliva

 

 

 

 

 

 

 

 

 

 

Name:

Carmine T. Oliva

 

 

 

 

 

 

 

 

 

 

Title:

Chief Executive Officer

 

 

Address for notices to Lender:

 

Address for notices to Guarantor:

 

 

 

BRIDGE BANK, NATIONAL ASSOCIATION

 

 

 

 

2530 Meridian Parkway

Attn: Lee Shodiss

 

 

55 Almaden Boulevard

 

 

San Jose, California 95113

 

Durham, NC 27713

 

 

 

 

 

 

Tel: (408) 556-6502

 

 

Fax: (408) 423-8514

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tel:

(408) 200-3040

 

 

 

 

 

 

 

 

 

 

Fax:

(408) 550-8340

 

7

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