Exhibit 10.1


 


AMENDMENT NUMBER 6
TO LOAN DOCUMENTS


 


THIS
AMENDMENT NUMBER 6 TO LOAN DOCUMENTS (this “Sixth Amendment”), is entered into as
of November 3, 2009, by and among GVEC RESOURCE IV INC.
(“Agent”), as Agent and as a Lender, EMRISE
CORPORATION, a Delaware corporation (“Parent”), and Parent’s
Subsidiaries that are signatories hereto (collectively with Parent, “Borrowers”).


 


W I T N E S S E T
H


 


WHEREAS,
Borrowers, Agent and the Lenders named therein are parties to that certain
Credit Agreement, dated as of November 30, 2007, as amended by that
certain Amendment Number 1 to Loan Documents, dated August 20, 2008, that
certain Amendment Number 2 to Loan Documents, dated February 12, 2009,
that certain Forbearance Agreement and Amendment Number 3 to Loan Documents,
dated March 20, 2009 (as amended by that certain Amendment to Forbearance
Agreement and Amendment Number 3 to Loan Documents, dated April 9, 2009), that
certain Amendment Number 4 to Loan Documents, dated April 14, 2009, and
that certain Amendment Number 5 to Loan Documents, dated August 14, 2009
(as further amended, restated, supplemented, or modified from time to time, the
“Credit Agreement”); and


 


WHEREAS,
the parties to the Credit Agreement desire to amend certain provisions of the
Credit Agreement as more fully set forth below.


 


NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree to amend the Loan Documents as
follows:


 


1.                                       DEFINITIONS. 
Capitalized terms used herein and not otherwise defined herein shall
have the meanings ascribed to them in the Credit Agreement, as amended hereby.


 


2.                                       AMENDMENT TO CREDIT
AGREEMENT.


 


(a)                                  Schedule 1.1 of the Credit Agreement is amended by
the addition or amendment and restatement, as applicable, of the following
definitions:


 


“Combined Capital Base” shall mean the sum of (i) Stockholders’
Equity and (ii) Subordinated Debt.


 


“EBITDA”
means, with respect to any fiscal period, Parent’s and its Subsidiaries’
consolidated net earnings (or loss), excluding any non-cash gain or loss
associated with the change in fair value of warrants, minus interest income and
extraordinary gains (including gains on sale of assets) plus interest expense,
Income Tax Expense, depreciation, and amortization, in each case, as determined
in accordance with GAAP.


 


“Sixth
Amendment” means that certain Amendment Number 6 to Loan Documents, dated
as of November 3, 2009, by and among Borrowers, Agent and the Lenders
party thereto.


 

















 


“Sixth
Amendment Effective Date” means the date on which each of the conditions
precedent set forth in Section 3 of the Sixth Amendment has been
satisfied.


 


(b)                                 Section 2.2(c) of the Credit Agreement is amended
and restated as follows:


 


“(c)                            All amounts outstanding under the Terms
Loans shall constitute Obligations. No portion of the Term Loans which is
repaid or prepaid may be reborrowed. The Term Loans shall be repaid in
installments as set forth in the tables set forth in subsections (d) and (e) below;
provided, however, that the outstanding unpaid principal balance
and all accrued and unpaid interest under the Term Loans shall be due and
payable on the Maturity Date (as defined in Section 3.3(a)) or such
earlier date of termination of this Agreement, whether by prepayment, or by
acceleration.”


 


(c)                                  Section 2.2(d) of the Credit Agreement is amended
and restated as follows:


 


“(d)                           Subject to subsection (c) above, the
principal of Term Loan A shall be repaid in installments as follows:


 


(i)                                     on November 1, 2009, an installment
of $25,000;


 


(ii)                                  on December 1, 2009, an installment
of $65,000; and


 


(iii)                               commencing on January 1, 2010, and
continuing on the first day of each of the 5 consecutive months thereafter,
equal installments of $120,000.”


 


(d)                                 Section 2.2(e) of the Credit Agreement is amended
and restated as follows:


 


“(e)                            Subject to subsection (c) above, the
principal of Term Loan B shall be repaid in installments as follows:


 


(i)                                     on November 1, 2009, an installment
of $75,000;


 


(ii)                                  on December 1, 2009, an installment
of $85,000; and


 


(iii)                               commencing on January 1, 2010, and
continuing on the first day of each of the 5 consecutive months thereafter,
equal installments of $166.666.67.”


 


(e)                                  Section 3.3 of the Credit Agreement is amended and
restated as follows:


 


2

















 


“(a)                            This Agreement shall continue in full
force and effect for a term ending on June 30, 2010 (the “Maturity Date”),
unless terminated earlier in accordance with the terms of this Agreement.  The foregoing notwithstanding, the Lender
Group, upon the election of the Required Lenders, shall have the right to
terminate its obligations under this Agreement pursuant to Section 8.1.


 


(b)                                 Notwithstanding the provisions of
subsection (a), all Obligations (other than the principal amount of the Term
Loans), including accrued interest to the date of principal payment, shall be
due and payable no later than June 30, 2010 (the “Revolver Maturity
Date”).”


 


(f)                                    Section 6.16(a) of the Credit Agreement is amended
and restated as follows:


 


“(a)                            Minimum EBITDA.  Fail to
achieve EBITDA, measured on a fiscal quarter-end basis, of not less than the
required amount set forth in the following table for the applicable period set
forth opposite thereto:


 


 


	
  Applicable Period

  	
   

  	
  Minimum Amount

  	
   

  
	
  For Borrowers’ fiscal
  quarter ending in September 2009

  	
   

  	
  $

  	
  250,000

  	
   

  
	
  For Borrowers’ fiscal
  quarter ending in December 2009

  	
   

  	
  $

  	
  550,000

  	
   

  
	
  For Borrowers’ fiscal
  quarter ending in March 2010

  	
   

  	
  $

  	
  1,450,000

  	
  ”

  



 


(g)                                 Section 6.16(b) of the Credit Agreement is amended
and restated as follows:


 


“(b)                           [RESERVED]”


 


(h)                                 Section 6.16(c) of the Credit Agreement is amended
and restated as follows:


 


“(c)                            Maximum Leverage Ratio.  Fail to achieve a Leverage Ratio, measured
quarterly at the end of each calendar quarter, of not greater than the amount
set forth in the following table for the applicable period set forth opposite
thereto:


 


 


	
  Applicable Period

  	
   

  	
  Maximum Ratio

  	
   

  
	
  For Borrowers’ fiscal
  quarter ending in September 2009

  	
   

  	
  1.70:1.00

  	
   

  
	
  For Borrowers’ fiscal
  quarter ending in December 2009

  	
   

  	
  1.50:1.00

  	
   

  
	
  For Borrowers’ fiscal
  quarter ending in March 2010

  	
   

  	
  1.40:1.00”

  	
   

  



 


3

















 


(i)                                     Section 6.16(d) of the Credit Agreement is amended
and restated as follows:


 


“(d)                           Minimum Liquidity. Fail to achieve a minimum Liquidity,
measured quarterly at the end of each calendar quarter, of not less than the
amount set forth in the following table for the applicable period set forth
opposite thereto:


 


	
  Applicable Period

  	
   

  	
  Minimum Amount

  	
   

  
	
  For Borrowers’ fiscal quarter ending in
  December 2009

  	
   

  	
  $

  	
  2,800,000

  	
   

  
	
  For Borrowers’ fiscal quarter ending in
  March 2010

  	
   

  	
  $

  	
  2,700,000

  	
  ”

  



 


3.                                       CONDITIONS PRECEDENT TO
THIS SIXTH AMENDMENT.  The satisfaction of each of
the following shall constitute conditions precedent to the effectiveness of this
Sixth Amendment and each and every provision hereof:


 


(a)                                  The representations and warranties in the
Credit Agreement and the other Loan Documents shall be true and correct in all
material respects on and as of the Sixth Amendment Effective Date, as though
made on such date (except to the extent that such representations and
warranties relate solely to an earlier date);


 


(b)                                 No Default or Event of Default shall have
occurred and be continuing on the date hereof or as of the Sixth Amendment
Effective Date;


 


(c)                                  No injunction, writ, restraining order,
or other order of any nature prohibiting, directly or indirectly, the
consummation of the transactions contemplated herein shall have been issued and
remain in force by any Governmental Authority against any Borrower, Agent, any
Lender or any of their Affiliates;


 


(d)                                 Borrowers have paid to Private Equity
Management Group, Inc. (“PEMG”), in immediately available funds, an
amount equal to $100,000 as required by Section 4 of this Sixth Amendment;
and


 


(e)                                  No Material Adverse Change shall have
occurred.


 


4.                                       ADVISORY FEE.  For
PEMG’s advice in connection with this Sixth Amendment the Borrowers shall pay
to PEMG, in immediately available funds, (i) an amount equal to $100,000
on the Sixth Amendment Effective Date and (ii) an amount equal to $100,000
on the earlier of (x) March 31, 2010; or (y) the repayment in
full of the Obligations.  The foregoing
payments represent an advisory fee which is fully earned as of the Sixth
Amendment 


 


4

















 


Effective Date and
no portion of such advisory fee shall be refundable for any reason, or applied
to the outstanding balance of the Term Loans or any other amounts owing under
the Credit Agreement.


 


5.                                       CONSTRUCTION. 
THIS SIXTH AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED IN THE STATE OF CALIFORNIA.


 


6.                                       ENTIRE AMENDMENT; EFFECT
OF SIXTH AMENDMENT.  This Sixth Amendment, and the
terms and provisions hereof, constitutes the entire agreement among the parties
pertaining to the subject matter hereof and supersedes any and all prior or
contemporaneous amendments relating to the subject matter hereof.  Except as expressly set forth in this Sixth
Amendment, the Credit Agreement and other Loan Documents shall remain unchanged
and in full force and effect.  To the
extent any terms or provisions of this Sixth Amendment conflict with those of
the Credit Agreement or other Loan Documents, the terms and provisions of this Sixth
Amendment shall control.  This Sixth
Amendment is a Loan Document.


 


7.                                       COUNTERPARTS;
TELEFACSIMILE EXECUTION.  This Sixth
Amendment may be executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument and any of the parties
hereto may execute this Sixth Amendment by signing any such counterpart.  Delivery of an executed counterpart of this Sixth
Amendment by telefacsimile shall be equally as effective as delivery of an
original executed counterpart of this Sixth Amendment.  Any party delivering an executed counterpart
of this Sixth Amendment by telefacsimile also shall deliver an original
executed counterpart of this Sixth Amendment, but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability,
and binding effect of this Sixth Amendment.


 


8.                                       MISCELLANEOUS.


 


(a)                                  Upon the effectiveness of this Sixth
Amendment, each reference in the Credit Agreement to “this Agreement,” “hereunder,”
“herein,” “hereof” or words of like import referring to the
Credit Agreement shall mean and refer to the Credit Agreement as amended by
this Sixth Amendment.


 


(b)                                 Upon the effectiveness of this Sixth
Amendment, each reference in the Loan Documents to the “Credit Agreement,”
“thereunder,” “therein,” “thereof” or words of like import
referring to the Credit Agreement shall mean and refer to the Credit Agreement
as amended by this Sixth Amendment.


 


[signatures on
next page]


 


5

















 


IN
WITNESS WHEREOF, the parties have caused this Sixth Amendment to be executed
and delivered on the date first written above.


 


	
  EMRISE CORPORATION

  	
  EMRISE ELECTRONICS CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
  By: 

  	
  /s/ Carmine T. Oliva

  	
   

  	
  By: 

  	
  /s/ Carmine T. Oliva

  
	
  Name: Carmine Oliva

  	
  Name: Carmine Oliva

  
	
  Title: Chief Executive
  Officer

  	
  Title: President

  
	
   

  	
   

  
	
   

  	
   

  
	
  CXR LARUS CORPORATION

  	
  RO ASSOCIATES INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
  By: 

  	
  /s/ Carmine T. Oliva

  	
   

  	
  By: 

  	
  /s/ Carmine T. Oliva

  
	
  Name: Carmine Oliva

  	
  Name: Carmine Oliva

  
	
  Title: President

  	
  Title: President

  
	
   

  	
   

  
	
   

  	
   

  
	
  CUSTOM COMPONENTS, INC.

  	
  ADVANCED CONTROL COMPONENTS,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Carmine T. Oliva

  	
   

  	
  By:

  	
  /s/ Carmine T. Oliva

  
	
  Name: Carmine Oliva

  	
  Name: Carmine Oliva

  
	
  Title: President

  	
  Title: President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GVEC RESOURCE IV INC.,

  
	
   

  	
  as Agent and a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ signature illegible

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title: Authorized
  Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ signature
  illegible

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:
  Authorized Signatory

  
						



 


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