**Exhibit10.2**

 

AMENDMENTNUMBER 11 TO LOAN DOCUMENTS

 

ThisAMENDMENT NUMBER 11 TO LOAN DOCUMENTS (this “Eleventh Amendment”) isentered into as of May 17, 2010, by and among GVEC RESOURCE IV INC. (the “Agent”),as Agent and as a Lender,PRIVATE EQUITY MANAGEMENT GROUP LLC, a Delaware limited liability company (“PEMG”),EMRJSE CORPORATION, a Delaware corporation (“Parent”), and Parent’sSubsidiaries that are signatories hereto (collectively, with Parent, the “Borrowers”and each individually, a “Borrower”), with reference to the followingfacts:

 

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 ofApril 14, 2009, that certain Amendment Number 5 to Loan Documents, datedas of August 14, 2009, that certain Amendment Number 6 to Loan Documents,dated as of November 3, 2009, that certain Amendment Number 7 to LoanDocuments, dated as of November 13, 2009, that certain Amendment Number 8to Loan Documents, dated as of December 31, 2009, that certain AmendmentNumber 9 to Loan Documents, dated as of April 13, 2010 and that certainAmendment Number 10 to Loan Documents, dated as of May 3, 2010 (as furtheramended, restated, supplemented or modified from time to time, the “CreditAgreement”).

 

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.                                    Representationsand Warranties.

 

(a)                                Each Borrowerhereby represents and warrants that, after giving effect to this EleventhAmendment, 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 Eleventh Amendment and theCredit Agreement are true and correct as of the date hereof, and shall survivethe execution of this Eleventh Amendment.

 

3.                                    Amendments. “KeyMilestones” numbered 8 and 9, as set forth in Annex Y to the Credit Agreement,as amended by Annex Y-1. to the Credit Agreement, are hereby replaced in theirentireties with the Key Milestones set forth in Annex Y-2 attached hereto.  For sake of clarity, Key Milestone number 10,as set forth in Annex Y-1 to the Credit Agreement, shall remain as set forth inAnnex Y-1.

 

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

 

5.                                    ConditionsPrecedent. The effectiveness of this Eleventh Amendment issubject to Agent’s receipt of all of the following:

 

(a)                                this EleventhAmendment 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 eachBorrower;

 

(b)                               payment byBorrowers of all legal fees and expenses incurred through the date of thisEleventh 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.

 

1

----

 

6.                                   Release.

 

(a)                                Each Borroweracknowledges that neither Agent, any Lender nor PEMG (the “Released Parties”)would enter into this Eleventh Amendment without Borrowers’ assurancehereunder. Except for the obligations arising hereafter under this EleventhAmendment, each Borrower hereby absolutely discharges and releases the ReleasedParties, any person or entity that has obtained any interest from any of themunder the Credit Agreement or otherwise and each of the Released Parties’ andsuch entities’ 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 the 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**allof the**claims released hereby and**no Borrower has heretofore assigned ortransferred or purported to assign or transfer to any person any such claim orany portion thereof. Each Borrower shall indemnify and hold harmless Agent,each Lender and PEMG from and against any claim, demand, damage, debt,liability (including payment of attorneys’ fees and costs actually incurredwhether or not litigation is commenced) based on or arising out of any suchassignment or transfer.

 

(e)                                The provisionsof this section shall survive payment in full of the Obligations, fullperformance of all the terms of this Eleventh Amendment and the CreditAgreement, and/or Agent’s, any Lender’s or PEMG’s actions to exercise anyremedy available under 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 thenegotiations that preceded the execution of this Eleventh Amendment. EachBorrower has executed this Eleventh Amendment after reviewing and understandingeach provision of this Eleventh Amendment and without reliance upon any promiseor representation of any person or persons acting for or on behalf of Agent.Each Borrower further acknowledges that such Borrower and its counsel have hadadequate opportunity to make whatever investigation or inquiry they may deemnecessary or desirable in connection with the subject matter of this EleventhAmendment prior to the execution hereof and the delivery and acceptance of theconsideration described herein.

 

8.                                   Miscellaneous.

 

(a)                                Successors andAssigns. This Eleventh 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 EleventhAmendment and any documents executed in connection herewith or pursuant heretocontain the entire Eleventh Amendment between the parties with respect to thesubject matter hereof and supersede all prior agreements, understandings,offers and negotiations, oral or written, with inspect thereto and no extrinsicevidence whatsoever may be introduced in any judicial or arbitrationproceeding, if any, involving this Eleventh Amendment; except that anyfinancing statements or other agreements or instruments filed by Agent withrespect to Borrower shall remain in full force and effect.

 

(c)                                Course ofDealing; Waivers. No course of dealing on the part of Agent or itsofficers, nor any failure or delay in the exercise of any right by Agent, shalloperate as a waiver thereof, and any single or partial exercise of any suchright shall

 

2

----

 

not preclude any laterexercise of any such right. Agent’s failure at any time to require strictperformance by Borrower of any provision shall not affect any right of Agentthereafter to demand strict compliance and performance. Any suspension orwaiver of a right must be in writing signed by an officer of Agent.

 

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

 

(e)                                Legal Effect. The CreditAgreement remains in full force and effect.  If any provision of this Eleventh Amendmentconflicts with applicable law, such provision shall be deemed severed from thisEleventh Amendment, and the balance of this Eleventh Amendment shall remain in fullforce and effect.

 

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

 

(g)                               Upon theeffectiveness of this Eleventh Amendment, each reference in the CreditAgreement to “this Eleventh Amendment,” “hereunder,” “herein,”“hereof” or words of like import referring to the Credit Agreement shallmean and refer to the Credit Agreement as amended by this Eleventh Amendment.

 

(h)                               Upon theeffectiveness of this Eleventh Amendment, each reference in the Loan Documentsto the “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 Eleventh 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 Eleventh Amendment and the Credit Agreement.

 

9.                                   EntireAmendments; Effect of Eleventh Amendment. This Eleventh Amendment,and the terms and provisions hereof, constitutes the entire Eleventh Amendmentamong the parties pertaining to the subject matter hereof and supersedes anyand all prior or contemporaneous amendments relating to the subject matterhereof. Except as expressly set forth in this Eleventh Amendment, the CreditAgreement and other Loan Documents shall remain unchanged and in full force andeffect. To the extent any terms or provisions of this Eleventh Amendmentconflict with those of the Credit Agreement or other Loan Documents, the termsand provisions of this Eleventh Amendment shall control. This EleventhAmendment is a Loan Document.

 

10.                              Counterparts;Electronic Transmission. This Eleventh Amendment may be executed inany number of counterparts, all of which taken together shall constitute oneand the same instrument and any of the parties hereto may execute this EleventhAmendment by signing any such counterpart. Delivery of an executed counterpartof this Eleventh Amendment by electronic mail shall be equally as effective asdelivery of an original executed counterpart of this Eleventh Amendment. Anyparty delivering an executed counterpart of this Eleventh Amendment byelectronic mail also shall deliver an original executed counterpart of thisEleventh Amendment, but the failure to deliver an original executed counterpartshall not affect the validity, enforceability, and binding effect of thisEleventh Amendment.

 

**[*****Balance of Page Intentionally Left Blank*****]**

 

3

----

 

IN WITNESS WHEREOF, theparties have caused this Amendment Number 11 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 Olivas          |                                        | 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 11 to Loan Documents*]**

 

----

 

**ANNEXY-2**

(Amended“Key Milestones” re Sale of ACC)

 
| **Key  Milestone** | ** ** | ** ** | ** ** | ** **               | ** ** | ** **                                                                                                                                                             |
|--------------------|------------|------------|------------|--------------------------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **#**              | ** ** | **Date**   | ** ** | **PEM Deliverable** | ** ** | **Description**                                                                                                                                                        |
| 8                  |       | 6/1        |       | Binding SPA              |       | ·                  Sign binding SPA                                          |
| 9                  |       | 6/3        |       | Preliminary proxy        |       | ·                  File preliminary proxy with  SEC for shareholder approval |

 

----