**Exhibit10.1**

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AMENDMENTNUMBER 10 TO LOAN DOCUMENTS

 

ThisAMENDMENT NUMBER 10 TO LOAN DOCUMENTS (this “Tenth Amendment”) isentered into as of May 3, 2010, by and among GVEC RESOURCE IV INC. (the “Agent”).as Agent and as a Lender, PRIVATE EQUITY MANAGEMENT GROUP LLC, a Delawarelimited liability company (“PEMG”). EMRISE CORPORATION, a Delawarecorporation (“Parent”), and Parent’s Subsidiaries that are signatorieshereto (collectively with Parent, the “Borrowers” and each individually,a “Borrower”) with reference to the following facts:

 

A.                                 Borrowers.Agent and the Lenders named therein are parties to that certain CreditAgreement dated as of November 30, 2007, as amended by that certain AmendmentNumber 1 to Loan Documents, dated as of August 20, 2008, that certainAmendment Number 2 to Loan Documents, dated as of February 12, 2009, thatcertain Forbearance Agreement and Amendment Number 3 to Loan Documents, datedas of March 20, 2009 (as amended by that certain Amendment to ForbearanceAgreement and Amendment Number 3 to Loan Documents, dated as of April 9,2009), that certain Amendment Number 4 to Loan Documents, dated as of April 14,2009, that certain Amendment Number 5**to Loan Documents, dated as ofAugust 14, 2009, that certain Amendment Number 6 to Loan Documents, datedas of November 3, 2009, that certain Amendment Number 7 to Loan Documents,dated as of November 13,2009, that certain Amendment Number 8 to Loan Documents, dated as of December 31,2009 and that certain Amendment Number 9 to Loan Documents, dated as of April 13,2010 (as further amended, restated, supplemented or modified from time to time,the “Credit Agreement”).

 

NOW, THEREFORE, for good andvaluable consideration, the parties agree as follows:

 

1.                                      Defined Terms. Capitalizedterms not otherwise defined herein shall have the same meanings as set forth inthe Credit Agreement

 

2.*                                     *Representations and Warranties.

 

(a)                                    Each Borrowerhereby represents and warrants that after giving effect to this TenthAmendment, no Event of Default or failure of condition has occurred or exists,or would exist with notice or lapse of time or both under the Credit Agreement.

 

(b)                                   Allrepresentations and warranties of Borrowers in this Tenth Amendment and theCredit Agreement are true and correct as of the date hereof, and shall survivethe execution of this Tenth Amendment.

 

3.                                      Amendments. “KeyMilestones” numbered 8, 9 and 10, as set forth in Annex Y to the CreditAgreement, are hereby replaced in their entireties with the Key Milestones setforth in Annex Y-l attached hereto.

 

4.                                      Default. In additionto all other Events of Default under the Credit Agreement, Borrowers’ failureto pay any amount when due under this Tenth Amendment or to perform anycovenant or other agreement contained in this Tenth Amendment, or any otherdocument entered into pursuant hereto, shall constitute Events of Default underthis Tenth Amendment and the Credit Agreement.

 

5.                                      ConditionsPrecedent.  Theeffectiveness of this Tenth Amendment is subject to Agent’s receipt of all ofthe following:

 

(a)                               this TenthAmendment and such other agreements and instruments reasonably requested byAgent pursuant hereto (including such documents as are necessary to create andperfect Agent’s interest in the Collateral), each duly executed by each Borrower;

 

(b)                              payment byBorrowers of all legal fees and expenses incurred through the date of thisTenth Amendment (which shall be remitted via wire transfer according to theinstructions set forth on Exhibit A hereto); and

 

(c)                               such otherdocuments and completion of such other matters as Agent may reasonably deemnecessary or appropriate.

 

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6.                                    Release*.*

 

(a)                               Each Borroweracknowledges that neither Agent, any Lender nor PEMG (the “Released Parties”)would enter into this Tenth Amendment without Borrowers’ assurance hereunder.Except for the obligations arising hereafter under this Tenth Amendment, eachBorrower hereby absolutely discharges and releases the Released Parties, anyperson or entity that has obtained any interest from any of them under theCredit Agreement or otherwise and each of the Released Parties’ and suchentities’ former and present partners, stockholders, officers, directors,employees, successors, assignees, agents and attorneys from any known orunknown claims which any Borrower now has against any of them of any nature,including any claims that any Borrower, its successors, counsel, and advisorsmay in the future discover they would have now had if they had known facts notnow known to them, whether founded in contract, in tort or pursuant to anyother theory of liability, including but not limited to any claims arising outof or related to the Credit Agreement or the transactions contemplated thereby.

 

(b)                              Each Borrowerwaives die provisions of California Civil Code Section 1542, which states:

 

A GENERAL RELEASE DOES NOTEXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HISFAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVEMATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

 

(c)                               The provisions,waivers and releases set forth in this section are binding upon each Borrowerand each Borrower’s shareholders, agents, employees, assigns and successors ininterest. The provisions, waivers and releases of this section shall inure tothe benefit of the Released Parties and their respective agents, employees,officers, directors, assigns and successors in interest.

 

(d)                              Each Borrowerwarrants and represents that such Borrower is the sole and lawful owner of allright, title and interest in and to all of the claims released hereby and noBorrower has heretofore assigned or transferred or purported to assign ortransfer to any person any such claim or any portion thereof. Each Borrowershall indemnify and hold harmless Agent, each Lender and PEMG from and againstany claim, demand, damage, debt, liability (including payment of attorneys’fees and costs actually incurred whether or not litigation is commenced) basedon or arising out of any such assignment or transfer.

 

(e)                               The provisionsof this section shall survive payment in full of the Obligations, fullperformance of all the terms of this Tenth Amendment and the Credit Agreement,and/or Agent’s, any Lender’s or PEMG’s actions to exercise any remedy availableunder the Credit Agreement or otherwise.

 

7.                                    Consultation ofCounsel. Each Borrower acknowledges that such Borrower has had the opportunityto be represented by legal counsel of its own choice throughout all of the negotiationsthat preceded the execution of this Tenth Amendment. Each Borrower has executedthis Tenth Amendment after reviewing and understanding each provision of thisTenth Amendment and without reliance upon any promise or representation of anyperson or persons acting for or on behalf of Agent, Each Borrower furtheracknowledges that such Borrower and its counsel have had adequate opportunityto make whatever investigation or inquiry they may deem necessary or desirablein connection with the subject matter of this Tenth Amendment prior to theexecution hereof and the delivery and acceptance of the consideration describedherein.

 

8.                                    Miscellaneous.

 

(a)                                Successors andAssigns. This Tenth Amendment shall be binding upon and shall inure to thebenefit of Borrower and Agent and their respective successors and assigns:provided, however, that the foregoing shall not authorize any assignment by Borrowerof its rights or duties hereunder.

 

(b)                               Integration. This TenthAmendment and any documents executed in connection herewith or pursuant heretocontain the entire Tenth Amendment between the parties with respect to thesubject matter hereof and supersede all prior agreements, understandings,offers and negotiations, oral or written, with respect thereto and no extrinsicevidence whatsoever may be introduced in any judicial or arbitrationproceeding, if any, involving this Tenth Amendment; except that any financingstatements or other agreements or instruments filed by Agent with respect toBorrower shall remain in full force and effect.

 

(c)                                Course of Dealing;Waivers. No course of dealing on the part of Agent or its officers, nor anyfailure or delay in the exercise of any right by Agent, shall operate as awaiver, thereof, and any single or partial exercise of any such right shall notpreclude any later exercise of any such right, Agents failure at any time torequire shirt performance by Borrower of any

 

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provision shall not affectany right of Agent thereafter to demand strict compliance and performance. Anysuspension or waiver of a right must be in writing signed by an officer ofAgent.

 

(d)                               Time is of theEssence. Time is of the essence as to each and every term and provision ofthis Tenth Amendment and the other Credit Agreement.

 

(e)                                Legal Effect. The Credit**Agreementremains in full force and effect. If any provision of this Tenth Amendmentconflicts with applicable law, such provision shall be deemed severed from thisTenth Amendment, and the balance of this Tenth Amendment shall remain in fullforce and effect.

 

(f)                                  Choice of Lawand Venue; Jury Trial Waiver; Judicial Reference; Service of Process. Section 12of the Credit Agreement hereby is incorporated herein by this reference asthough fully set forth.

 

(g)                               Upon theeffectiveness of this Tenth Amendment, each reference in the Credit Agreementto “this Tenth Amendment,” “hereunder,” “herein,” “hereof”or words of like import referring to the Credit Agreement shall mean and referto the Credit Agreement as amended by this Tenth Amendment.

 

(h)                               Upon theeffectiveness of this Tenth Amendment, each reference in the Loan Documents tothe “Credit Agreement” “thereunder,” “therein,” “thereofor words of like import referring to the Credit Agreement shall mean and referto the Credit Agreement as amended by this Tenth Amendment.

 

(i)                                   Assignment andIndemnity. Borrower consents to Agent’s assignment, inaccordance with Section 13 of the Credit Agreement, of all or any part ofAgent’s rights under this Tenth Amendment and the Credit Agreement.

 

9.                                    EntireAmendment; Effect of Tenth Amendment. This Tenth Amendment, andthe terms and provisions hereof, constitutes the entire Tenth Amendment amongthe parties pertaining to the subject matter hereof and supersedes any and allprior or contemporaneous amendments relating to the subject matter hereof.Except as expressly set forth in this Tenth Amendment, the Credit Agreement andother Loan Documents shall remain unchanged and in full force and effect. Tothe extent any terms or provisions of this Tenth Amendment conflict with thoseof the Credit Agreement or other Loan Documents., the terms and provisions ofthis Tenth Amendment shall control. This Tenth Amendment is a Loan Document.

 

10.                              Counterparts;Electronic Transmission. This Tenth Amendment may be executed in anynumber of counterparts, all of which taken together shall constitute one andthe same instrument and any of the parties hereto may execute this TenthAmendment by signing any such counterpart. Delivery of an executed counterpartof this Tenth Amendment by electronic mail shall be equally as effective asdelivery of an original executed counterpart of this Tenth Amendment. Any partydelivering an executed counterpart of this Tenth Amendment by electronic mailalso shall deliver an original executed counterpart of this Tenth Amendment,but the failure to deliver an original executed counterpart shall not affectthe validity, enforceability, and binding effect of this Tenth Amendment.

 

**[*Balance ofPage Intentionally Left Blank*]**

 

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IN WITNESS WHEREOF, theparties have caused this Amendment Number 10 to Loan Documents to be executedand delivered on the date first written above.

 
| **EMRISE CORPORATION**                   | ** **              | **EMRISE ELECTRONICS CORPORATION**          |
|------------------------------------------|-------------------------|---------------------------------------------|
|                                     |                    |                                        |
|                                     |                    |                                        |
| By:                                      | /s/ Carmine Oliva       |                                        | By: | /s/ Carmine Oliva |
| Name:                                    | Carmine Oliva           |                                        | Name: | Carmine Oliva |
| Title:                                   | Chief Executive Officer |                                        | Title: | President |
|                                     |                    |                                        |
|                                     |                    |                                        |
| **CXR LARUS CORPORATION**                | ** **              | **ADVANCED CONTROL  COMPONENTS, INC.** |
|                                     |                    |                                        |
|                                     |                    |                                        |
| By:                                      | /s/ Carmine Oliva       |                                        | By: | /s/ Carmine Oliva |
| Name:                                    | Carmine Oliva           |                                        | Name: | Carmine Oliva |
| Title:                                   | President               |                                        | Title: | President |
|                                     |                    |                                        |
|                                     |                    |                                        |
| **CUSTOM COMPONENTS, INC.**         |                    | **GVEC RESOURCE IV INC.,**                  |
|                                     |                    | as Agent and a Lender                       |
| ** **                               |                    |                                        |
| By:                                      | /s/ Carmine Oliva       |                                        | By: PRIVATE EQUITY  MANAGEMENT GROUP LLC, its Court-Appointed Receiver |
|                                     |
| Name:                                    | Carmine Oliva           |                                        |   |
| Title:                                   | President               |                                        | By: | /s/ Jim LeSieur |
|                                     |                    | Name:                                       | Jim LeSieur |
|                                     |                    | Title:                                      | Chief Operating Officer |
| **PRIVATE EQUITY MANAGEMENT GROUP  LLC** |                    |                                        |
|                                     |                    |                                        |
|                                     |                    |                                        |
| By:                                      | /s/ Jim LeSieur         |                                        |   |
| Name:                                    | Jim LeSieur             |                                        |   |
| Title:                                   | Chief Operating Officer |                                        |   |

 

**[*SignaturePage to Amendment Number 10 to Loan Documents*]**

 

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**ANNEXY-1**

(Amended“Key Milestones” re Sale of ACC)

 
| **Key  Milestone** | ** ** | ** ** | ** ** | ** **               | ** ** | ** **                                                                                                                                                    |
|--------------------|------------|------------|------------|--------------------------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **#**              | ** ** | **Date**   | ** ** | **PEM Deliverable** | ** ** | **Description**                                                                                                                                               |
| 8                  |       | 5/17       |       | Binding SPA              |       | ·                  Sign binding SPA                                 |
| 9                  |       | 5/19       |       | Preliminary proxy        |       | ·                  File preliminary proxy for  shareholder approval |
| 10                 |       | 6/29       |       | Closing documentation    |       | ·                  Complete vote and close  transaction             |

 

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