Exhibit 10.86






 


 


 


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 LIMITED	2	 



    

   


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 LIMITED	3	 



    




 


LLYDS
TSB BANK PLC and EMRISE ELECTRONICS LIMITED


 


Increased
Costs and Changes in Circumstances


 


	3.1	In
                                         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



 


	3.2	The
                                         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


 


		4.1	You
                                         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.


 


		4.2	You
                                         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 LIMITED	4	 



    

  


	 	(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,


 


		5.2	you
                                         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,


 


		5.3	you
                                         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,



 


		5.4	in
                                         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.


 


		5.5	if
                                         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


 


		5.6	you
                                         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


 


	 	6.1	The 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 LIMITED	5	 



    

 


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.


 


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



 


		6.3	If
                                         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.



 


		6.4	You
                                         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.



 


		6.5	You
                                         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


 


		7.1	This
                                         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).



 


		7.2	The
                                         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 LIMITED	6	 



    

  


		7.3	The
                                         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.



 


		7.4	You
                                         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


 


		8.1	This
                                         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.
	 	 	 



		8.2	No
                                         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.



 


		8.3	If
                                         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.



 


		8.4	The
                                         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.



 


		8.5	Unless
                                         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.



 


		8.6	Any
                                         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.



 


		8.7	This
                                         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.



 


		8.8	The
                                         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.



 


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



 


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



 


	 	8.11	References 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 LIMITED	7	 



    

  


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.


 


	 	8.12	For 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 LIMITED	8	 



    

 


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


 


	 	(signature)	 		(signature)
	*Director/Authorised
    Signatory/	 	 	*Director/Authorised
    Signatory/	 
	 	 	 	 	 
		(name)	 		(name)


 


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


 19/7/2011


	Date	 	 


 


  


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