EXHIBIT 10.71


 


THIS EXHIBIT HAS BEEN
REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST.  REDACTED MATERIAL IS
MARKED WITH [* * *] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.


 


AMENDMENT NUMBER 9
TO LOAN DOCUMENTS


 


This
AMENDMENT NUMBER 9 TO LOAN DOCUMENTS (this “Ninth Amendment”) is entered
into as of April 13, 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”), EMRISE CORPORATION, a Delaware
corporation (“Parent”), and Parent’s Subsidiaries that are signatories
hereto (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 Credit
Agreement, dated as of November 30, 2007, as amended by that certain
Amendment Number 1 to Loan Documents, dated as of August 20, 2008, that
certain Amendment Number 2 to Loan Documents, dated as of February 12,
2009, that certain Forbearance Agreement and Amendment Number 3 to Loan
Documents, dated as of March 20, 2009 (as amended by that certain
Amendment to Forbearance Agreement 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 of August 14, 2009, that certain  Amendment Number 6 to Loan Documents, dated
as of November 3, 2009, that certain Amendment Number 7 to Loan Documents,
dated as of November 13, 2009, and that certain Amendment Number 8 to Loan
Documents, dated as of December 31, 2009 (as further amended, restated,
supplemented or modified from time to time, the “Credit Agreement”).


 


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


 


1.                                      Defined
Terms.  Capitalized terms not
otherwise defined herein shall have the same meanings as set forth in the
Credit Agreement


 


2.                                      Amendment
Fee.  In consideration of the
execution of this Ninth Amendment, Borrowers shall pay PEMG an advisory fee
equal to Thirty-Seven Thousand Five Hundred Dollars ($37,500) (the “Amendment
Fee”), which fee shall be due and payable on the earlier of (i) the
Maturity Date or (ii) at such time as Borrowers repay all outstanding
Obligations under the Credit Agreement. 
The Amendment Fee shall be fully earned and nonrefundable as of the date
of this Ninth Amendment.


 


3.                                      Representations
and Warranties.


 


(a)                                 Each
Borrower hereby represents and warrants that, after giving effect to this Ninth
Amendment, 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)                                All
representations and warranties of Borrowers in this Ninth Amendment and the
Credit Agreement are true and correct as of the date hereof, and shall survive
the execution of this Ninth Amendment.


 


4.                                      Amendments.
The Credit Agreement is hereby amended as follows:


 


(a)                                 Section 2.4(c)(i)(z) of
the Credit Agreement is hereby amended and restated in its entirety to read as
follows:


 


“(z) Borrowers shall
prepay the outstanding Obligations in an amount equal to [* * *] of the Net
Cash Proceeds received in connection with the sale of [* * *].”


 


(b)                                Section 5.23(b) of
the Credit Agreement is hereby amended and restated in its entirety to read as
follows:


 


“(b)                          Intentionally
Omitted.”


 


5.                                      Additional
Agreements.  In addition to the
amendments above, the Borrowers, Agent and the Lenders hereby acknowledge and
agree that there will be no additional fees, other than legal fees, expenses
and costs, with respect to any future 


 


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THIS EXHIBIT HAS BEEN
REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST.  REDACTED MATERIAL IS
MARKED WITH [* * *] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.


 


changes regarding the anticipated milestone dates of [*
* *], as of the date hereof, provided the following conditions and circumstances
are satisfied:


 


(a)                                 Borrowers
promptly notify Agent and the Lenders of any potential change to the milestone
date(s);


 


(b)                                Borrowers,
in good faith, provide a documented explanation regarding the reason for any
change to the milestone date(s) to Agent, which documented reasoning shall
be acceptable to Agent in its reasonable discretion; and


 


(c)                                 Any
potential change of the milestone date(s) is moved within a reasonable
time frame, as determined by the Agent in its reasonable discretion, which change
of the milestone date(s) will in no way conflict with the payment in full
of the Loans by the Maturity Date.


 


6.                                      Default.  In addition to all other Events of Default
under the Credit Agreement, Borrowers’ failure to pay any amount when due under
this Ninth Amendment or to perform any covenant or other agreement contained in
this Ninth Amendment, including the agreements contained in Section 5 of
this Ninth Amendment, or any other document entered into pursuant hereto, shall
constitute Events of Default under this Ninth Amendment and the Credit
Agreement.


 


7.                                      Conditions
Precedent.  The effectiveness of this
Ninth Amendment is subject to Agent’s receipt of all of the following:


 


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


 


(b)                                payment
by Borrowers of all legal fees and expenses incurred through the date of this
Ninth Amendment (which shall be remitted via wire transfer according to the
instructions set forth on Exhibit A hereto); and


 


(c)                                 such
other documents and completion of such other matters as Agent may reasonably
deem necessary or appropriate.


 


8.                                      Release.


 


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


 


(b)                                Each
Borrower waives the provisions of California Civil Code Section 1542,
which states:


 


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


 


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


 


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THIS EXHIBIT HAS BEEN
REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST.  REDACTED MATERIAL IS
MARKED WITH [* * *] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.


 


(d)                                Each
Borrower warrants and represents that such Borrower is the sole and lawful
owner of all right, title and interest in and to all of the claims released
hereby and no Borrower has heretofore assigned or transferred or purported to
assign or transfer to any person any such claim or any 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 incurred whether or not litigation is commenced) based on or arising
out of any such assignment or transfer.


 


(e)                                 The
provisions of this section shall survive payment in full of the Obligations,
full performance of all the terms of this Ninth Amendment and the Credit
Agreement, and/or Agent’s, any Lender’s or PEMG’s actions to exercise any
remedy available under the Credit Agreement or otherwise.


 


9.                                      Consultation
of Counsel.  Each Borrower
acknowledges that such Borrower has had the opportunity to be represented by
legal counsel of its own choice throughout all of the negotiations that
preceded the execution of this Ninth Amendment. 
Each Borrower has executed this Ninth Amendment after reviewing and
understanding each provision of this Ninth Amendment and without reliance upon
any promise or representation of any person or persons acting for or on behalf
of Agent.  Each Borrower further
acknowledges that such Borrower and its counsel have had adequate opportunity
to make whatever investigation or inquiry they may deem necessary or desirable
in connection with the subject matter of this Ninth Amendment prior to the
execution hereof and the delivery and acceptance of the consideration described
herein.


 


10.                                Miscellaneous.


 


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


 


(b)                                Integration.  This Ninth Amendment and any documents
executed in connection herewith or pursuant hereto contain the entire Ninth
Amendment between the parties with respect to the subject matter hereof and
supersede all prior agreements, understandings, offers and negotiations, oral
or written, with respect thereto and no extrinsic evidence whatsoever may be
introduced in any judicial or arbitration proceeding, if any, involving this
Ninth Amendment; except that any financing statements or other agreements or
instruments filed by Agent with respect to Borrower 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 any failure or delay in the
exercise of any right by Agent, shall operate as a waiver thereof, and any
single or partial exercise of any such right shall not preclude any later
exercise of any such right.  Agent’s
failure at any time to require strict performance by Borrower of any provision
shall not affect any right of Agent thereafter to demand strict compliance and
performance.  Any suspension or waiver of
a right must be in writing signed by an officer of Agent.


 


(d)                                Time
is of the Essence.  Time is of the
essence as to each and every term and provision of this Ninth Amendment and the
other Credit Agreement.


 


(e)                                 Legal
Effect.  The Credit Agreement remains
in full force and effect.  If any
provision of this Ninth Amendment conflicts with applicable law, such provision
shall be deemed severed from this Ninth Amendment, and the balance of this
Ninth Amendment shall remain in full force and effect.


 


(f)                                   Choice
of Law and 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 set forth.


 


(g)                                Upon
the effectiveness of this Ninth Amendment, each reference in the Credit
Agreement to “this Ninth Amendment,” “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 Ninth Amendment.


 


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THIS EXHIBIT HAS BEEN
REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST.  REDACTED MATERIAL IS
MARKED WITH [* * *] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.


 


(h)                                Upon
the effectiveness of this Ninth 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 Ninth Amendment.


 


(i)                                    Assignment
and Indemnity.  Borrower consents to
Agent’s assignment, in accordance with Section 13 of the Credit Agreement,
of all or any part of Agent’s rights under this Ninth Amendment and the Credit
Agreement.


 


11.                                Entire
Amendment; Effect of Ninth Amendment. 
This Ninth Amendment, and the terms and provisions hereof, constitutes
the entire Ninth Amendment 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 Ninth
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
Ninth Amendment conflict with those of the Credit Agreement or other Loan
Documents, the terms and provisions of this Ninth Amendment shall control. This
Ninth Amendment is a Loan Document.


 


12.                                Counterparts; Electronic Transmission. This Ninth 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 Ninth
Amendment by signing any such counterpart. Delivery of an executed counterpart
of this Ninth Amendment by electronic mail shall be equally as effective as
delivery of an original executed counterpart of this Ninth Amendment. Any party
delivering an executed counterpart of this Ninth Amendment by electronic mail
also shall deliver an original executed counterpart of this Ninth Amendment,
but the failure to deliver an original executed counterpart shall not affect
the validity, enforceability, and binding effect of this Ninth Amendment.


 


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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL

TREATMENT REQUEST.  REDACTED MATERIAL IS
MARKED WITH [* * *] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.


 


IN
WITNESS WHEREOF, the parties have caused this Amendment Number 9 to Loan
Documents to be executed and 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

  	
   

  	
   

  



 


[Signature Page to
Amendment Number 9 to Loan Documents]