Exhibit 10.3


 


PATENT
SECURITY AGREEMENT


 


EMRISE Corporation, a Delaware corporation, and RO Associates
Incorporated, a California corporation (collectively, “Grantor”), for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
grant to GVEC Resource IV Inc., a company organized and existing under the laws
of the British Virgin Islands, as agent for and representative of (in such
capacity herein called “Secured Party”) the financial institutions (“Lenders”)
party to that certain Credit Agreement, entered into by and among the Grantor,
Agent, and Lenders, dated as of November 30, 2007 ( the “Credit
Agreement”), a continuing security interest in the following property:


 


(i)            Each patent presently
owned and listed on Schedule A hereto; and


 


(ii)           All proceeds of the
foregoing, including without limitation any claim by Grantor against third
parties for damages (to the extent not effectively prohibited by an applicable
and legally enforceable license agreement) by reason of past, present or future
infringement of any patent now owned or hereafter owned by Grantor, in each
case together with the right to sue for and collect said damages:


 


to secure
performance of all Obligations of Grantor under the Creditor Agreement and as
set out in that certain Security Agreement dated as of November 30, 2007, by
and among Grantor and Secured Party and others (the “Agreement”).


 


Grantor does
hereby further acknowledge and affirm that the rights and remedies of Secured
Party with respect to the security interest in the works of authorship,
patents, patent registrations and recordings made and granted hereby are more
fully set forth in the Agreement, the terms and provisions of which are
incorporated by reference herein as if fully set forth herein.


 


All terms
defined in the Agreement, whether by reference or otherwise, when used herein,
shall have their respective meanings set forth therein, unless the context
requires otherwise.


 


1

















 


IN WITNESS WHEREOF, Grantor has caused this Patent Security Agreement
to be duly executed as of November 30, 2007.


 


 


	
   

  	
  GRANTOR:

  	
   

  
	
   

  	
   

  
	
   

  	
  EMRISE CORPORATION, a Delaware
  

  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
       /S/ D. JOHN DONOVAN

  	
   

  
	
   

  	
  Name:

  	
     D. JOHN DONOVAN

  	
   

  
	
   

  	
  Title: 

  	
   V.P. of Finance & Administration

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  RO ASSOCIATES INCORPORATED,

  
	
   

  	
  a California corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
       /S/ D. JOHN DONOVAN

  	
   

  
	
   

  	
  Name:

  	
     D. JOHN DONOVAN

  	
   

  
	
   

  	
  Title: 

  	
  Secretary & Treasurer

  	
   

  
						



 


2

















 


	
   

  	
  ACCEPTED BY SECURED PARTY:

  	
   

  
	
   

  	
   

  
	
   

  	
  GVEC RESOURCE IV INC., as
  Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
       /S/ ROBERT J. ANDERSON

  	
   

  
	
   

  	
  Name:

  	
     Robert J. Anderson

  	
   

  
	
   

  	
  Title: 

  	
  Authorized Signatory

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
       /S/ PETER PAUL MENDEL

  	
   

  
	
   

  	
  Name:

  	
     Peter Paul Mendel

  	
   

  
	
   

  	
  Title: 

  	
  Authorized Signatory

  	
   

  
						



 


3

















 


Schedule
A to


 


PATENT
SECURITY AGREEMENT


 


Patents


 


EMRISE Corporation


 


	
  Title

  	
   

  	
  Jurisdiction

  	
   

  	
  Serial
  Number

  	
   

  	
  Filing

  Date

  	
   

  	
  Status

  	
   

  	
  Patent
  Number

  	
   

  	
  Issue

  Date

  
	
  (Inventors: Donald L. Horton; 

  William J. Miller)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Low Profile Rotary Switch

  	
   

  	
  Brazil

  	
   

  	
  PI0215831-0

  	
   

  	
  8/29/02

  	
   

  	
  Pending

  	
   

  	
  N/A

  	
   

  	
  N/A

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Low Profile Rotary Switch

  	
   

  	
  Canada

  	
   

  	
  2494641

  	
   

  	
  11/5/02

  	
   

  	
  Pending

  	
   

  	
  N/A

  	
   

  	
  N/A

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Low Profile Rotary Switch

  	
   

  	
  Europe

  	
   

  	
  02778749.8

  	
   

  	
  11/5/02

  	
   

  	
  Pending

  	
   

  	
  N/A

  	
   

  	
  N/A

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Low Profile Rotary Switch

  	
   

  	
  Japan

  	
   

  	
  2004-532550

  	
   

  	
  11/5/02

  	
   

  	
  Pending

  	
   

  	
  N/A

  	
   

  	
  N/A

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Low Profile Rotary Switch

  	
   

  	
  PCT

  	
   

  	
  PCT/US02/35610

  	
   

  	
  11/5/02

  	
   

  	
  Superceded

  	
   

  	
  N/A

  	
   

  	
  N/A

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Low Profile Rotary Switch

  	
   

  	
  US

  	
   

  	
  10/523342

  	
   

  	
  1/27/05

  	
   

  	
  Pending

  	
   

  	
  N/A

  	
   

  	
  N/A

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (Inventors: Donald L. Horton; William J.
  Miller)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Low Profile Rotary Switch

  With Detent in the Bushing

  	
   

  	
  Brazil

  	
   

  	
  PI0314134-9

  	
   

  	
  7/17/03

  	
   

  	
  Pending

  	
   

  	
  N/A

  	
   

  	
  N/A

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Low Profile Rotary Switch 

  With Detent in the Bushing

  	
   

  	
  Canada

  	
   

  	
  2496034

  	
   

  	
  7/17/03

  	
   

  	
  Pending

  	
   

  	
  N/A

  	
   

  	
  N/A

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Low Profile Rotary Switch

  With Detent in the Bushing

  	
   

  	
  Europe

  	
   

  	
  03811194.4

  	
   

  	
  7/17/03

  	
   

  	
  Pending

  	
   

  	
  N/A

  	
   

  	
  N/A

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Low Profile Rotary Switch

  With Detent in the Bushing

  	
   

  	
  Japan

  	
   

  	
  2004-551425

  	
   

  	
  7/17/03

  	
   

  	
  Pending

  	
   

  	
  N/A

  	
   

  	
  N/A

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Low Profile Rotary Switch

  With Detent in the Bushing

  	
   

  	
  PCT

  	
   

  	
  PCT/US03/22523

  	
   

  	
  7/17/03

  	
   

  	
  Superceded

  	
   

  	
  N/A

  	
   

  	
  N/A

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Low Profile Rotary Switch

  With Detent in the Bushing

  	
   

  	
  US

  	
   

  	
  10/522700

  	
   

  	
  1/27/05

  	
   

  	
  Issued

  	
   

  	
  7109430

  	
   

  	
  9/19/06

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Low Profile Rotary Switch

  With Detent in the Bushing

  	
   

  	
  US

  	
   

  	
  11/485249

  	
   

  	
  7/11/06

  	
   

  	
  Pending

  	
   

  	
  N/A

  	
   

  	
  N/A

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (Inventor: Donald L. Horton)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Rotary Switch with Crown Detent

  	
   

  	
  Canada

  	
   

  	
  2548604

  	
   

  	
  10/5/04

  	
   

  	
  Pending

  	
   

  	
  N/A

  	
   

  	
  N/A

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Rotary Switch with Crown Detent

  	
   

  	
  Europe

  	
   

  	
  04821443.1

  	
   

  	
  10/5/04

  	
   

  	
  Pending

  	
   

  	
  N/A

  	
   

  	
  N/A

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Rotary Switch with Crown Detent

  	
   

  	
  Japan

  	
   

  	
  2006-551044

  	
   

  	
  10/5/04

  	
   

  	
  Pending

  	
   

  	
  N/A

  	
   

  	
  N/A

  



 


4

















 


	
  Title

  	
   

  	
  Jurisdiction

  	
   

  	
  Serial
  Number

  	
   

  	
  Filing

  Date

  	
   

  	
  Status

  	
   

  	
  Patent
  Number

  	
   

  	
  Issue

  Date

  
	
  Rotary Switch with Crown Detent

  	
   

  	
  PCT

  	
   

  	
  PCT/US04/32797

  	
   

  	
  10/5/04

  	
   

  	
  Pending

  	
   

  	
  N/A

  	
   

  	
  N/A

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (Inventor: Donald L. Horton)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Rotary Circuit Selectionwith Crown Detent

  	
   

  	
  US

  	
   

  	
  10/581240

  	
   

  	
  6/2/06

  	
   

  	
  Pending

  	
   

  	
  N/A

  	
   

  	
  N/A

  



 


5

















 


RO Associates
Incorporated:


 


	
  Title

  	
   

  	
  Jurisdiction

  	
   

  	
  Patent / 

  Publication 

  Number

  	
   

  	
  Status

  	
   

  	
  Publication / 

  Issue Date

  	
   

  
	
  Current Sharing Signal 

  Coupling/Decoupling Circuit for 

  Power Converter Systems

  	
   

  	
  US

  	
   

  	
  6134129

  	
   

  	
  Issued

  	
   

  	
  10/17/2000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Improved Current Sharing Signal 

  Coupling/Decoupling Circuit for 

  Power Converter Systems

  	
   

  	
  Australia

  	
   

  	
  6397499A1

  	
   

  	
  Published/pending

  	
   

  	
  4/10/2000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Current Sharing Signal 

  Coupling/Decoupling Circuit for 

  Power Converter Systems

  	
   

  	
  US

  	
   

  	
  5428523

  	
   

  	
  Issued

  	
   

  	
  6/27/1995

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Improved Current Sharing Signal 

  Coupling/Decoupling Circuit for 

  Power Converter Systems

  	
   

  	
  Australia

  	
   

  	
  6362794A1

  	
   

  	
  Published/pending

  	
   

  	
  10/24/1994

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DC to DC Converter Apparatus

  	
   

  	
  US

  	
   

  	
  5075821

  	
   

  	
  Issued

  	
   

  	
  12/24/1991

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DC to DC Converter Apparatus

  	
   

  	
  US

  	
   

  	
  D334171

  	
   

  	
  Issued

  	
   

  	
  3/23/1993

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Method and Means for Protecting 

  Converter Circuits

  	
   

  	
  US

  	
   

  	
  4858052

  	
   

  	
  Expired

  	
   

  	
  8/15/1989

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  High Efficiency Power Supply Apparatus

  	
   

  	
  US

  	
   

  	
  3564384

  	
   

  	
  Issued

  	
   

  	
  2/16/1971

  	
   

  



 


6