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We LLOYDS TSB BANK PLC (the “Bank”) of” 2nd Floor, 25 Gresham Street, London
EC2V 7HN offer you EMRISE ELECTRONICS LIMITED (company registered number
01969006) of Cobbswood Industrial Estate, Brunswick Road, Ashford, Kent TN23 I
EH a loan on the following terms and conditions.

 

SPECIFIC TERMS AND CONDITIONS

 

THE LOAN

 

The maximum amount of the loan shall be £750.000. This amount is to be used for
the refinancing of your existing indebtedness with the Bank. The loan shall be
borrowed in one amount on or before 31st August 2011 or such later date as the
Bank may agree. You will not be entitled to borrow any amount that has not been
borrowed by the agreed date. The proceeds of the loan will be credited to your
current account no. 309716 00450767.

 

Interest is to be payable at a fixed rate and, because of this, if for any
reason the loan is not borrowed on the date agreed, including non-satisfaction
of the PRECONDITIONS set out below, you shall pay to the Bank the administration
fee and any Break Cost as provided in clause 2.3 of the GENERAL TERMS AND
CONDITIONS.

 

Unless the Rank agrees otherwise, the loan may not be borrowed until all the
PRECONDITIONS set out below have been satisfied.

 

PRECONDITIONS

 

Unless received by the Bank prior to the date on which this agreement is signed
by the Bank, the Bank is to receive in form and substance acceptable to the Bank
the security and other documents (if any) listed in the Security Schedule to
this agreement and the documents, evidence or other requirements of the
preconditions (if any) set out in the Preconditions Schedule to this agreement.
Any security received should be accompanied by such evidence as the Bank may
reasonably require to confirm the value of such security and to confirm that
such security is fully effective.

 

FEES AND COSTS

 

You shall pay any costs and expenses incurred by the Bank in assessing the loan,
in the preparation of this agreement and of any amendment, waiver or consent
letter at any time entered into, in the preparation, valuation, taking or
release of any guarantee or security at any time given in connection with this
agreement and in connection with the revaluation of any such security from time
to lime. These costs and expenses may arise whether or not the loan is made
available to you. Except in the case of the costs detailed below, the Bank will
provide you with an estimate of the amount of any such costs and expenses before
they are payable. The following charges shall be paid by you on demand by the
Bank.

 

Security Costs £250 (estimated).

 

Estimated charges have been calculated on the basis of the Bank’s experience
with similar transactions. The actual amount charged to you may be more or less
than the estimated figure.

 

An arrangement fee of £11,250 is also payable. This fee shall be paid to the
Bank by you on the date the loan is borrowed.

 

As mentioned in EARLY REPAYMENT FEES AND COSTS below and in clauses 2, 3, 5 & 6
of the GENERAL TERMS AND CONDITIONS, other costs may arise in connection with
the loan or in connection with the repayment of the loan.

 

INTEREST

 

The rate of interest payable on the loan will be a fixed rate equal to the
aggregate of an interest margin of 4.75% per annum and the rate (inclusive of
regulatory costs - see clause 3.2 of the GENERAL TERMS AND CONDITIONS) quoted by
the Bank’s Wholesale Markets division at or about the time of borrowing for the
term of the loan.

 

Interest shall be paid by you 1 month after the date the loan is borrowed, at
monthly intervals thereafter and on the date of final repayment of the loan.

 

Interest is calculated on a daily basis on the amount of the loan from time to
time outstanding. Interest for any particular period is calculated on the number
of days in that period and a year of 365 days.

 

If you fail to pay any amount payable under this agreement when due the rate of
interest may be increased in accordance with clause 6.3 of the GENERAL TERMS AND
CONDITIONS.

 

REPAYMENT

 

The loan is repayable in 60 consecutive monthly instalments in respect of
principal only, commencing on the date which is 1 month after the date the loan
is borrowed. The amount of these instalments will vary so that the total
principal and interest to be paid by you each month is more or less equal.

 

EARLY REPAYMENT FEES AND COSTS

 

The loan may be repaid early in accordance with clause 2 of the GENERAL TERMS
AND CONDITIONS. You shall, at the time an early repayment is made, pay to the
Bank the administration fee and any Break Cost as provided in clause 2.3 of the
GENERAL TERMS AND CONDITIONS.

 

 

Continuation of a LOAN AGREEMENT between
LLOYDS TSB BANK PlC and EMRISE ELECTRONICS LIMITED2 

   

FINANCIAL COVENANTS

 

For as long as any moneys arc owing to the Bank under this agreement or the Bank
is under any obligation under this agreement you shall comply with the financial
covenant set out below.

 

Net Worth is at all times from and after 31st December 2011 to be maintained at
not less than £4,200,000 and shall increase annually by not less than £200,000.

 

This covenant will be tested against each financial statement.

 

PERIOD OF OFFER

 

This agreement shall come into effect only if the Bank receives from you and
finds in order a signed copy of this agreement on or before 15th August 2011 for
such later date as the Bank may agree).

 

GENERAL TERMS AND CONDITIONS

 

Use of Loan Proceeds

 

1.1 Unless the loan is only for working capital or general business purposes,
the amount borrowed shall be held in trust for the Bank until used for the
purpose stated in the SPECIFIC TERMS AND CONDITIONS.

 

Repayment

 

2.1 You will repay the loan on the dates and in the manner set out in the
REPAYMENT section of the SPECIFIC TERMS AND CONDITIONS.

 

If you fail to make any repayment in full and by the time the Bank calculates
the next repayment instalment amount, the Bank may (at its discretion and
without prejudice to the Bank’s rights expressed in clause 6.1 below):

 

  (a) increase the amount of that next instalment and each of your remaining
regular instalments proportionately to ensure that the full balance of the loan
is repaid within the agreed term of the loan;         (b) extend the term of the
loan; or         (c) increase the amount of the final repayment instalment.

 

The Bank will apply any payments it receives from you against any interest
before any other amounts on your account, including the outstanding principal
balance of the loan. This will not apply to payments made specifically for fees
and/or charges or where the Bank collects the interest and principal that make
up your repayment from separate accounts.

 

2.2 You may at any time after giving at least 5 business days’ notice to the
Bank make early repayment of all of the loan together with interest accrued to
the date of payment and any amount that may be payable pursuant to clause 2.3
below. The loan may not be borrowed again once it has been repaid. You may not
make an early repayment of part of the loan unless the Bank agrees to the
request by you to make such an early repayment. If the Bank agrees to allow an
early repayment of part of the loan, such early repayment shall be made together
with interest accrued to the date of payment and any amount that may be payable
pursuant to clause 2.3 below. Each early repayment of part of the loan must be
of at least £10.000 (excluding accrued interest) and no amount repaid early may
be borrowed again. If the loan is to be repaid in more than one amount, the Bank
will decide how to apply the early repayment, either (a) by reducing subsequent
repayments proportionately or (b) by applying the early repayment to the then
latest scheduled repayment instalments so as to reduce the term of the loan.

   

2.3 The fixed rate of interest will protect you against the risk of an increase
in interest rates during the time the fixed rate applies. The Bank, however,
also needs to be protected if you repay the loan early or for any reason you do
not borrow the loan in full within the period or, as the case may be, on the
date agreed, and owing to a fall in interest rates the Bank is not able to
re-lend at the same interest rate as for the loan.       You. therefore, agree
that, if interest on the loan is to be payable at a fixed rate of interest
during any part of its term and (a) for any reason you do not borrow the loan in
full within the period or, as the case may be, on the date agreed, or (b) on any
day during any fixed rate period you repay the loan early in whole or in part or
are required (pursuant to the terms of this agreement) to repay the loan early
(the date referred to in (a) or, as the case may be, (b) above being hereinafter
referred to as the “Break Date”) you will pay to the Bank on the Break Date the
Break Cost and an administration fee of £250.

 

For the purposes of this agreement, the “Break Cost” is the amount by which:

 

  (i) the gross interest which the Bank would have been entitled to receive on
the amount not borrowed or. as the case may be. on the amount repaid early (had
the loan been drawn in full and repaid in accordance with the originally agreed
repayment structure) for the period from the Break Date to the last day of the
fixed rate period less any amount payable in respect of the interest margin
chargeable by the Bank,         Exceeds           (ii) the interest which the
Bank would be able to obtain by placing an amount equal to the amount not
borrowed or, as the case may be, the amount repaid early on deposit with a
leading bank in the London interbank market for the period from the Break Date
to the last day of the fixed rate period and with the same repayment structure
as agreed for the loan

.

The Bank will certify (such certificate to be conclusive in the absence of fraud
or manifest error) lo you the Break Cost.

 

 

Continuation of a LOAN AGREEMENT between
LLOYDS TSB BANK PlC and EMRISE ELECTRONICS LIMITED3 

 

LLYDS TSB BANK PLC and EMRISE ELECTRONICS LIMITED

 

Increased Costs and Changes in Circumstances

 

3.1In running its business the Bank and any holding company of the Bank each has
to comply with certain regulations and requirements laid down by regulatory and
other official organisations or bodies as well as the law generally. The rate of
interest quoted in the SPECIFIC TERMS AND CONDITIONS has been set in the light
of how this affects the cost (to the Bank and any such holding company) of the
Bank funding, agreeing to make and of making the loan available at the time the
Bank signed this agreement. If. as a result of any new laws, regulations or
requirements or any changes in existing ones or in the interpretation or
application of any existing ones, such cost is increased, the Bank may increase
the rate of interest charged on the loan to compensate for that extra cost. The
Bank will advise you in writing within 30 days of such increase taking effect

 

3.2The fixed rate of interest specified in the SPECIFIC TERMS AND CONDITIONS
includes regulatory costs. These arc the costs to the Bank at the time the Bank
signed this agreement in funding, agreeing to make and making the loan available
that result from complying with the liquidity, monetary control, prudential
requirements and supervisory charge requirements of the Bank of England, the
Financial Services Authority and any other regulatory authority. Regulatory
costs may vary from time to time and any such variation may result in the Bank
changing the fixed rate of interest payable on the loan. The Bank will determine
the regulatory costs on each date interest on the loan is due to be paid and, if
in the Bank’s opinion there is then a material difference (either up or down) in
regulatory costs it will advise you in writing within 30 days of the new rate of
interest then to apply to the loan.

 

3.3 (a)   If the currency in which the loan is denominated is due to be or has
been converted into the euro or into any other currency as a result of a change
in law. the Bank can amend any term of this agreement. Such an amendment will be
only to the extent the Bank thinks necessary to comply with any generally
accepted conventions and market practice in the London interbank market and
otherwise to reflect the change in currency and to put the Bank in the same
position, so far as possible, that it would have been in if no change in
currency had occurred.         (b)   The Bank can also change any term of this
agreement at any time (even if” an Event of Default has not occurred):          
(i) to reflect the introduction of or any other change in law or in any code of
practice which applies to the Bank or the way the Bank is regulated;          
(ii) to reflect any changes the Bank makes to its systems or processes: or      
    (iii) if the change is to your advantage.         (c)   If the Bank makes a
change pursuant to this clause 3.3 which is to your disadvantage, the Bank will
give you 30 days’ prior notice. This notice may be by letter, email, text,
statement inserts or messages or in any other way which is sent to you. The Bank
can make any other changes straight away by telling you personally or by putting
notices in a selection of national newspapers, in its branches or on its website
within the next 30 days.         (d)   At any time within 60 days of receipt of
the Bank’s 30 days’ notice (as referred to in paragraph (c) above) you may make
early repayment of all (but not part) of the loan. Such repayment shall be in
accordance with clause 2 above (including the payment to the Bank of the
administration fee and any Break Cost as provided in clause 2.3 above).

 

Representations

 

4.1You represent that:

 

  (a) all action required or necessary to authorise the execution of this
agreement and the security documents (if any) required from you by this
agreement and the performance of your obligations under and in connection with
this agreement and such security documents has been taken,         (b) neither
the execution of this agreement nor the performance of your obligations under
and in connection with this agreement, including the giving of any security,
will constitute or result in any breach of any agreement, law, requirement or
regulation (including, for the avoidance of doubt, your constitutive documents),
        (c) no material litigation, administrative or judicial proceedings are
presently pending or threatened against you, any of your subsidiaries or any of
your or any such subsidiary’s directors,         (d) there has been no material
adverse change in your financial condition or that of any of your subsidiaries
since the date of the financial statement received by the Bank prior to the date
on which this agreement is signed by the Bank, and         (e) no Event of
Default (as described in clause 6.1 below) has occurred and is continuing and no
circumstance has occurred which, with the giving of notice or the passing of
time, could become or cause an Event of Default.

 

4.2You shall be deemed to repeat the above representations on each day (with
reference to the facts and circumstances then existing) prior to borrowing the
loan and thereafter until all amounts payable to the Bank under this agreement
have been paid.

 

Undertakings

 

Prior to borrowing the loan and thereafter until all amounts payable to the Bank
under this agreement have been paid:

 

5.1 neither you nor any of your subsidiaries shall without the Bank’s consent:

 

  (a) create or allow to be in place any mortgage, charge or other security
interest or encumbrance over the whole or any part of your or their business or
any of the property, income or other assets of your or their business or enter
into any transaction which in the Bank’s opinion has a similar effect, or factor
or assign any debts,

 

 

Continuation of a LOAN AGREEMENT between
LLOYDS TSB BANK PlC and EMRISE ELECTRONICS LIMITED4 

  

  (b) part with, sell, transfer, lease or otherwise dispose of (or attempt or
agree to do any such thing) the whole or any material part of your or any of
your subsidiary’s undertaking, property, revenue or assets (either by a single
transaction or a number of transactions whether related or not) other than for
full value on an arm’s length basis (save that no such parting with, sale,
transfer, lease or other disposal may be made or entered into (i) if it would
breach the terms of any security document given to the Bank, or (ii) in respect
of any undertaking, property, revenue or asset over which the Bank then has a
fixed charge or fixed security interest)         (c) change the nature of your
or their business as it is now conducted,         (d) agree or enter into any
substantial property transaction as set out in Sections 190 to 196 of the
Companies Act 2006, or         (e) make any loan, give any guarantee or provide
any other security as set out in Sections 197 to 214 of the Companies Act 2006
or allow any such loan, guarantee or other security to continue,

 

5.2you shall provide to the Bank:

 

  (a) copies of your financial statement within 270 days of the end of each
financial year, and         (b) copies of your monthly management accounts in a
form acceptable to the Bank within 45 days of the end of the period to which
they relate. The Bank may at its option require such management accounts to
incorporate an age- analysis of debtors, a schedule of all tenancies (if any) of
any property held by the Bank as security at the date of the accounts, and/or a
breakdown of stock in trade, and         (c) copies of any financial information
or information regarding any security that the Bank may from time to time
reasonably request promptly on request and within any timescale reasonably
required by the Bank,

 

5.3you and each of your subsidiaries shall maintain with reputable underwriters
or insurance companies adequate insurance on and over your respective business
and assets. Such insurance is to be against such risks and to the extent usual
for persons carrying on a business such as That carried on by you or, as the
case may be, by the relevant subsidiary and is, if so requested by the Bank at
any time, to include appropriate terrorism cover. From time to time upon the
request of the Bank, you shall furnish the Bank with evidence of such insurance,

 

5.4in respect of any pension policy or life policy held by or charged to the
Bank, you agree to ensure that the premiums are paid when due and, upon request
from the Bank at any time, promptly to provide the Bank with evidence that
payment has been made. In the case of any such pension policy you also agree:

 

  (a) upon request by the Bank at any time, promptly to provide the Bank with
evidence that the commutation proceeds will be paid to the Bank,         (b)
except to the extent that you have and apply other funds in repayment of the
loan, to take the maximum benefit of the pension policy by way of commutation
and to apply that benefit in repayment of the loan when due, and         (c) not
to agree to any arrangement that would reduce the commutation amount of the
pension policy nor arrange far any transfer to be made from the pension policy.

 

5.5if the purpose of the loan (as slated in the SPECIFIC TERMS AND CONDITIONS)
involves building works or works enabling building works affecting any property,
you agree that promptly upon request by the Bank at any time you shall:

 

  (a) provide the Bank with evidence in a form acceptable to the Bank that you
have obtained all necessary permissions and approvals for the proposed works and
have entered into (in a form of contract acceptable to the Bank) all contracts
necessary for the due completion of the proposed works. You will at all times
ensure that any other party to any such contract (whether or not such contract
has been provided to the Bank) complies with the contract in accordance with its
terms. You shall not, without the consent of the Bank, agree to any modification
in the terms of any contract which has been provided to the Bank, or terminate
any such contract or stop work on any proposed works prior to completion of the
works, and         (b) provide to the Bank confirmations (each in a form and
from a party acceptable to the Bank) of all expenditure on the works. The Bank
may refuse to permit the borrowing of the loan if the amount to be borrowed
under this agreement in respect of the works exceeds the total expenditure
detailed in the confirmations, and

 

5.6you agree to reduce the loan (in accordance with clause 2 above, including
the payment to the Bank of the administration fee and any Break Cost as provided
in clause 2.3 above) or to provide the Bank with additional security acceptable
to the Bank if the ratio of the loan to the value of the security given to the
Bank is at any time higher than that applicable on the date this agreement was
signed by the Bank and agree to provide such evidence as the Bank may from time
to time require to confirm the value of such security and to confirm that the
security remains fully effective. If the loan is to be repaid in more than one
amount, the Bank will decide how to apply any early repayment, either (a) by
reducing subsequent repayments proportionately or (b) by applying the early
repayment to the then latest scheduled repayment instalment(s) so as to reduce
the term of the loan.

 

Default and Termination

 

  6.1The events listed in (a) to (k) below are called “Events of Default”. As
soon as an Event of Default happens or at any time thereafter, by giving notice
to you, the Bank may cancel any obligations it has to lend money to you and may
also make the loan become repayable on demand. When the loan is repayable on
demand, you must repay the loan to the Bank together with all interest which has
accrued on the loan and any other amounts owing under this agreement (including
the payment to the Bank of the administration fee and any Break Cost as provided
in clause 2.3 above) as soon as the Bank requests you to pay these amounts. The
Bank may do this at the time the loan becomes repayable on demand or at any
later time.

 

 

Continuation of a LOAN AGREEMENT between
LLOYDS TSB BANK PlC and EMRISE ELECTRONICS LIMITED5 

 

Events of Default

 

  (a) you fail to pay when due any indebtedness owed by you to the Bank.        
(b) you fail to comply with any other obligation or undertaking to the Bank or
with the terms of any other agreement with the Bank or an event of default
arises in connection with any other agreement with the Bank.           (c) any
representation or statement made by you to the Bank, whether or not in
connection with this agreement, proves to have been incorrect or inaccurate when
made or deemed made,         (d) you fail to pay when due any indebtedness owed
by you to another creditor or any of your creditors changes (or obtains the
right to change) the original date on which that indebtedness is or was due to
be paid to an earlier date as a result of your failure to comply with
obligations in connection with that indebtedness,         (e) any person with a
legal claim takes possession or a receiver, administrator, custodian, trustee,
liquidator or similar official is appointed of the whole or any part of your
business or of any of the assets of your business or an administration
application is presented or made for the making of an administration order or a
notice of intention to appoint an administrator is issued by you or your
directors or by the holder of a qualifying floating charge or notice of
appointment of an administrator is Filed by any person with the court or a
judgment, decree or diligence is made or granted against you,         (f)
proceedings are commenced or a petition is presented or an order is made or a
resolution is passed for your           winding up or you are or become
insolvent or you stop or threaten to stop payment of your debts generally or you
are deemed by law unable to pay your debts or you or your directors convene or
become obliged to convene a meeting of shareholders or creditors with a view to
winding up or an application is made in connection with a moratorium or a
proposal to creditors for a voluntary arrangement by you or you take any action
(including entering negotiations) with a view to readjustment, rescheduling,
forgiveness or deferral of any part of your indebtedness,         (g) you cease
or threaten to cease to carry on your business in the normal course or fail to
maintain or breach any franchise, licence or right necessary to conduct your
business or breach any legislation relating to your business, including but not
limited to any applicable environmental protection laws,         (h) the persons
who now control you cease to have such control,         (i) any guarantee, other
security or other document or arrangement relied upon by the Bank in connection
with the loan ceases to be continuing or ceases to remain fully effective or
notice of discontinuance is received by the Bank or if the Bank reasonably
believes that the effectiveness of any such document or arrangement is in doubt
or if any provision of such document or arrangement is not complied with for any
reason or any favourable tax treatment afforded to any pension policy or to any
life policy held by or charged to the Bank ceases to be available,         (j)
any of the above events occur in relation to any parent or subsidiary or any
guarantor of or other provider of           security for the loan or, in the
case of any individual that provides any guarantee or other security for the
loan, a petition is presented for a bankruptcy or sequestration order against
any such individual or any such individual dies or becomes incapable of managing
his or her affairs because of any lack of mental capacity, or any action is
taken in any jurisdiction which is similar or analogous to any of the above
events in respect of you or any of the above mentioned parties, or           (k)
you fail or have foiled to disclose to the Bank any important information that
is relevant to the loan or the security required or you undertake or are subject
to any action or occurrence which the Bank reasonably believes could place at
risk the payment of any amount owing to the Bank.

 

6.2If any Event of Default happens or anything happens that might lead to an
Event of Default, you shall inform the Bank immediately.

 

6.3If any amount payable in respect of this agreement is not paid when due
(including any amount payable under this clause 6) you shall pay interest on
that amount at the default rate from the date on which the amount was due until
it is paid to the Bank. Interest, if unpaid, shall be added to the amount in
default at monthly intervals. The default rate shall be the rate determined by
the Bank to be 3% per annum higher than the rate of interest specified in the
SPECIFIC TERMS AND CONDITIONS that would normally apply.

 

6.4You shall indemnify the Bank against any costs incurred or losses reasonably
sustained by the Bank as the result of any Event of Default happening or any
failure by you to pay any amount demanded by the Bank as a result of an Event of
Default.

 

6.5You shall also pay any costs and expenses reasonably incurred by the Bank in
enforcing or perfecting any security for the loan and in enforcing or preserving
its rights under this agreement.

 

Assignment and Securitisation

 

7.1This agreement is for the benefit of the contracting parties, their
respective successors and permitted assigns. The agreement does not and will not
confer any benefit on or be enforceable by any third party (other than by any
such successor or permitted assign).

 

7.2The Bank may at any time and without any further consent agree or enter into
a Transfer, although, without prejudice to any other type of transfer, no
Transfer of the Bank’s obligations shall be effective until such time as the
Transferee shall have confirmed that it is bound by the terms of this agreement:
Following such confirmation you shall look only to the Transferee in respect of
that portion of the Bank’s obligations transferred to the Transferee. You will
not assign any of your rights or transfer any of your obligations under this
agreement without the prior written consent of the Bank.

 

 

Continuation of a LOAN AGREEMENT between
LLOYDS TSB BANK PlC and EMRISE ELECTRONICS LIMITED6 

  

7.3The Bank may disclose any information about you or any of your subsidiaries
to their auditors for the time being, to any Transferee or potential Transferee,
to any rating agency or listing authority, to any advisers of any such party or
of the Bank and to any other person to whom the Bank believes it is reasonable
to disclose such information in connection with any proposed Transfer. This may
include information about your finances or the finances of any subsidiary, the
loan and any security document relating to. or other document relied on by the
Bank in connection with, this agreement.

 

7.4You will co-operate with and assist the Bank to complete any proposed
Transfer. In particular, you will assist the Bank in transferring the benefit of
any security document given in connection with this agreement, whether that
Transfer is to the Transferee or to a security trustee appointed by the Bank
and/or the Transferee. The Bank will reimburse you for all legal and other out
of pocket costs and expenses including any registration (or similar) fees
incurred with the prior written agreement of the Bank in connection with
requests made by the Bank pursuant to this clause 7.4.

 

Other

 

8.1This agreement and any non-contractual obligations arising from or connected
with this agreement shall be governed by- English law and is subject to the
jurisdiction of the English Courts. The Bank may take action against you in any
other jurisdiction where proceedings may be lawfully commenced.    

8.2No delay or omission by the Bank in exercising any of its rights hereunder
shall operate or be construed as a waiver, nor shall any single or partial
exercise of any such right prevent any other or further exercise thereof or the
exercise of any other right.

 

8.3If the loan is to be borrowed, or if any payment becomes due from you, on a
day which is not a business day then the amount concerned will be borrowed or,
as the case may be, will become payable on the next business day. All payments
from you are to be made without any set-off, deduction or withholding of any
nature.

 

8.4The Bank may use any credit balance there may be on any of your accounts
towards payment of any amounts owed by you to the Bank under this agreement
without notifying you beforehand, whether such credit balances are in sterling
or any other currency or are deposited for fixed or determinable periods.

 

8.5Unless otherwise agreed by the Bank you shall at all times during the term of
this agreement keep a current account (or other account for the purposes of
meeting all payments due to the Bank under and in connection with this
agreement) with the Bank and all amounts from time to time due to the Bank under
this agreement may be debited to that account. You shall keep enough money in
the account (or ensure that there are sufficient funds available within any
agreed overdraft) to meet all such payments as they become due.

 

8.6Any security given to the Bank (whether given before the date on which this
agreement is signed by the Bank or at any time in the future and whether or not
specified in this agreement) shall, unless otherwise agreed by the Bank, be
security not only for the loan but also for all other moneys and liabilities
whether certain or contingent at any time due, owing or incurred by you to the
Bank.

 

8.7This agreement and all communications from you to the Bank in connection with
this agreement and the loan (all of which are to be sent in writing to the Bank
at the address given at the heading of this agreement or to such other address
as the Bank may from lime to time advise) shall be signed on your behalf either
in accordance with the mandate given by you to the Bank, or if requested by the
Bank, in accordance with a specific resolution of your Board of Directors. All
communications (whether given by you or by the Bank) relating to the loan and
any change to this agreement shall be in English.

 

8.8The Bank will not be liable for any loss, damage, interruption, delay or
non-performance in connection with this agreement caused in whole or in part by
events which are beyond the Bank’s reasonable control. This may include, for
example, explosion, terrorism, war. riot or other civil disturbance or failure
or interruption of any electronic communications system.

 

8.9Any change to this agreement that is not permitted in this agreement must be
made in writing and be signed by the contracting parties.

 

  8.10The SPECIFIC TERMS AND CONDITIONS and GENERAL TERMS AND CONDITIONS shall
be read and construed as one agreement.

 

  8.11References in this agreement to:

 

an Act or any other statutory provision shall be deemed to mean and to include a
reference to any amendment to or restatement of that Act or other provision for
the time being in force.

 

the Bank includes its successors and assigns.

 

a business day means a day other than a Saturday or a Sunday on which banks are
open for normal business in England and Wales.

 

control shall have the meaning given to it in Section 995 of the Income Tax Act
2007.

 

financial statement means at any particular time the latest consolidated annual
balance sheet and profit and loss account (being audited or signed by an
independent accountant if so required by law or by the Bank at any time and
being prepared on the same basis, containing a similar level of detail and in
accordance with the same accounting principles as, and for an accounting
reference period consistent with, the latest such balance sheet and profit and
loss account received by the Bank prior to the date on which this agreement is
signed by the Bank) of you and your subsidiaries together with the notes to
both.

 

loan means, at any particular time, the total amount which may be borrowed by
you under this agreement or, if appropriate, the total amount which has been
debited to the loan account and remains outstanding at such time. The loan may,
at any time, include any interest, costs and charges added to the loan account
in accordance with this agreement.

 

 

Continuation of a LOAN AGREEMENT between
LLOYDS TSB BANK PlC and EMRISE ELECTRONICS LIMITED7 

  

month means a calendar month.

 

parent and subsidiary shall have respectively the meaning given to parent
undertaking and subsidiary undertaking in Section 1162 of the Companies Act
2006. During any period in which you do not have a subsidiary, all references to
your subsidiaries shall be ignored and the relevant text read and construed
accordingly.

 

Transfer means any assignment, transfer, securitisation or other disposal by the
Bank of all or any of its rights or obligations under this agreement to any
other person, the sale of any participation in any such rights or obligations to
any other person, and any other transaction of any nature which has the effect
of transferring the economic or credit risks or rewards of the Bank under or in
connection with this agreement to any other person.

 

Transferee means any person to whom a Transfer is made or with whom a Transfer
is entered into.

 

  8.12For the purposes of the financial covenants:

 

Net Worth shall mean at any particular time the aggregate of the amount paid up
on your issued share capital and the consolidated distributable and
non-distributable reserves of you and your subsidiaries but (a) after deducting
the total of any debit balance on profit and loss account and the book value of
goodwill and any other intangible assets, and (b) excluding any minority
interests in subsidiaries and any increase in the valuation of assets subsequent
to the date of the financial statement.

 

Use of Personal Information and Credit, Fraud and Identification Checks

 

When you apply to open an account, the Bank will check its own records for
information on individuals who are Key Account Parties. “Key Account Parties’”
are individuals who are sole traders, proprietors, partners, directors, members,
beneficial owners, trustees or other controlling officials of the business or
organisation including signatories to the account. The Bank may also carry out a
search through credit reference agencies on these individuals. The credit
reference agencies will keep a record of this search and this record may be used
by other organisations to verify their identities. The Bank may also check or
share information with fraud prevention agencies to prevent fraud and money
laundering.

 

When you apply for credit and credit related or other facilities, the Bank may
carry out a search through credit reference agencies on you and/or Key Account
Parties. The credit reference agencies will keep a record of this search whether
or not the application proceeds. A record of the search on personal files will
not be made available to other organisations. A record of the search on the
business file will be made available to other organisations. The Bank may also
check or share information with fraud prevention agencies to prevent fraud and
money laundering.

 

When you have an account with the Bank, the Bank may disclose how you have run
your account(s) to credit reference agencies. If you borrow and do not repay in
full and on time, the Bank may tell the credit reference agencies. The Bank may
make periodic searches of the Lloyds Banking Group records and credit reference
agencies to manage your account(s) including to make decisions whether to
continue or extend existing credit. The “Lloyds Banking Group” includes the Bank
and a number of other companies using brands including Lloyds TSB. Halifax and
Bank of Scotland, and their associated companies. More information on the Lloyds
Banking Croup can be found at www.lloydsbankinggroup.com. For these purposes
“associated companies” includes Lloyds Banking Group plc and any subsidiary,
affiliate or other firm directly or indirectly controlled from time to time by
either Lloyds Banking Group plc or by the Bank.

 

The Bank may also check and share information with fraud prevention agencies to
prevent fraud and money laundering.

 

If false or inaccurate information is provided or fraud is suspected, details
may be passed to fraud prevention agencies and other relevant agencies.

 

If you or Key Account Parties ask, the Bank will tell you or them which credit
reference and fraud prevention agencies it has used so you or they can get a
copy of your or their details from these agencies.

 

This is a condensed guide to the use of your personal and business information
by the Bank and at credit reference and fraud prevention agencies. If you would
like to read full details of how data may be used, please visit the website at
www.lloydstsb.com/commercial/customcrdata or contact your relationship manager.

 

Preconditions Schedule

 

No preconditions required.

 

Security Schedule

 

(1)an unlimited debenture from Emrise Electronics Limited, and

 

(2)an omnibus guarantee and set off agreement dated 3rd June 2008 among the
Bank. Emrise Electronics Limited, Xcel Power Systems Limited and Pascall
Electronics Limited

 

 

Continuation of a LOAN AGREEMENT between
LLOYDS TSB BANK PlC and EMRISE ELECTRONICS LIMITED8 

 

You acknowledge having received, read and understood a copy of this agreement
and, in consideration of the Bank agreeing to grant the loan, agree to the
SPECIFIC TERMS AND CONDITIONS and to the GENERAL TERMS AND CONDITIONS set out
above (together the “agreement’’)- You also acknowledge that this agreement
comprises all the terms currently applicable to the loan and that no
representation, warranty or undertaking has been made by the Bank in connection
with the loan which is not set out in this agreement and, in deciding to enter
into this agreement and to proceed with any transaction or project for which the
loan has been sought, you recognise that the Bank has no duty to give you advice
and you have not received or relied upon any advice given by the Bank.

 

Signed for and on behalf of Emrise Electronics Limited by

 

 [img02.jpg] (signature)   [img01.jpg] (signature) *Director/Authorised
Signatory/     *Director/Authorised Signatory/             [img04.jpg] (name)  
[img03.jpg] (name)

 

Pursuant to a Resolution of the Board dated 2 nd August 2011#

 19/7/2011

Date    

 

[img06.jpg]  

Important note:

This agreement creates legal obligations. Before signing you may wish to take
independent advice.

 

Please note that if you do not make any borrowing on the date agreed or, for any
reason, you repay early, or are required to repay early, the loan or any part of
the loan, you will have to compensate the Bank for its costs and losses.

 

www.lloydstsb.com

Please contact your relationship manager if you would like this agreement in
Braille, large print or on audio tape. The Bank accepts calls made though RNID
Typetalk.

Calls may be monitored or recorded in case the Bank needs to check it has
carried out your instructions correctly and to help improve its quality of
service.

 

1 .loyds TSB Bank plc Registered Office: 25 Gresham Street, London EC2V 7 HN.
Registered in England Number 2065.

Authorised and regulated by the Financial Services Authority.

 

Version 27042011