EXHIBIT 10.11


 


GUARANTY


 


THIS GUARANTY (this “Guaranty”)
is executed and delivered as a deed as of November 30, 2007, by each of
the parties that are signatories hereto (such parties are referred to
hereinafter each individually as a “Guarantor,” and collectively, jointly and severally, as
the “Guarantors”), for the benefit of GVEC Resource IV Inc., as
Arranger and Agent (the “Agent”) and the Lenders (as defined below). All
capitalized terms used but not otherwise defined herein shall have the meanings
ascribed to such terms in the Credit Agreement (as herein defined).


 


RECITALS:


 


A.                                   Pursuant
to that certain Credit Agreement of even date herewith (as amended, restated,
supplemented or otherwise modified from time to time, including all schedules
thereto, the “Credit Agreement”) between and among EMRISE Corporation, a
Delaware corporation (the “Parent”), each of Parent’s Subsidiaries
identified on the signature pages thereof (such Subsidiaries, together
with the Parent, the “Borrowers”), the Agent, and the Lenders from time
to time party thereto (the “Lenders”), the Lenders are willing to make
certain financial accommodations available to the Borrowers from time to time
pursuant to the terms and conditions thereof.


 


B.                                     The
Guarantors are direct or indirect wholly owned subsidiaries of the Parent and,
as such, will benefit by virtue of the financial accommodations extended to the
Parent by the Lenders.


 


C.                                     In
order to induce the Lenders to enter into the Credit Agreement and to extend
the financial accommodations to the Borrowers pursuant to the Credit Agreement,
and in consideration thereof, the Guarantors have agreed to guarantee the
Guaranteed Obligations.


 


NOW, THEREFORE, as an
inducement to the Lenders to enter into the Credit Agreement, and for other
good and valuable consideration, the receipt and legal sufficiency of which are
hereby acknowledged, the parties do hereby agree as follows:


 


ARTICLE I

NATURE AND SCOPE OF GUARANTY


 


Section 1.1.                                   Guaranty.
Each Guarantor hereby unconditionally, absolutely and irrevocably guarantees to
the Agent, for the benefit of the Lenders, and each Guarantor shall be jointly
and severally liable for (a) the due and punctual payment of all
Obligations including, without limitation, the principal of, and interest
(including any interest that, but for the commencement of any applicable
bankruptcy or insolvency proceeding, would have accrued) on, any and all
premium on, and any and all expenses incurred in connection with, the
Obligations pursuant to the terms of the Credit Agreement, and (b) the due
and punctual performance of all of the covenants and obligations owing to the
Agent and the Lenders (the “Guaranteed Obligations”).


 


Section 1.2.                                   Nature
of Guaranty. This Guaranty is an irrevocable, absolute, continuing guaranty
of payment and not a guaranty of collection. This Guaranty may not be
revoked by any


 

















 


Guarantor and shall continue to be effective with
respect to any Guaranteed Obligations arising or created after any attempted
revocation by any Guarantor. The fact that at any time or from time to time the
Guaranteed Obligations may be increased or reduced shall not release or
discharge the obligation of any Guarantor to the Agent or any Lender with
respect to the Guaranteed Obligations. This Guaranty may be enforced by the
Agent and any permitted assignee of the Agent and shall not be discharged by
the assignment or negotiation of all or part of the Agent’s or any Lender’s
rights under the Credit Agreement.


 


Section 1.3.                                   Payment
By the Guarantors. If all or any part of the Guaranteed Obligations
shall not be punctually paid when due, whether at demand, maturity,
acceleration or otherwise, the Guarantors shall, immediately upon demand by the
Agent, and without presentment, protest, notice of protest, notice of
non-payment, notice of intention to accelerate the maturity, notice of
acceleration of the maturity, or any other notice whatsoever, pay in lawful
money of the United States of America, the amount due on the Guaranteed
Obligations to the Agent at the Agent’s address as set forth herein. Such
demand(s) may be made at any time coincident with or after the time for
payment of all or part of the Guaranteed Obligations, and may be made
from time to time with respect to the same or different items of Guaranteed
Obligations. Such demand shall be deemed made, given and received in accordance
with the notice provisions hereof.


 


Section 1.4.                                   No
Duty To Pursue Others. The liability of each Guarantor shall be direct and
immediate as a primary and not a secondary obligation or liability. It shall
not be necessary for the Agent (and each Guarantor hereby waives any rights
which such Guarantor may have to require the Agent), in order to enforce
the obligations of each Guarantor hereunder, first to (a) institute suit
or exhaust its remedies against any Borrower or others liable on the Loans or
the Guaranteed Obligations or any other Person, (b) enforce the Agent’s
rights against any collateral which shall ever have been given to secure the
Loans, (c) enforce the Agent’s rights against any other guarantors of the
Guaranteed Obligations, (d) join the Borrowers or any others liable on the
Guaranteed Obligations in any action seeking to enforce this Guaranty, (e) exhaust
any remedies available to the Agent or any Lender against any collateral which
shall ever have been given to secure the Loans, or (f) resort to any other
means of obtaining payment of the Guaranteed Obligations. Neither the Agent nor
the Lenders shall be required to mitigate damages or take any other action to
reduce, collect or enforce the Guaranteed Obligations.


 


Section 1.5.                                   Waivers.


 


(a)                                  Without
limitation to any other waivers contained in this Guaranty, each Guarantor
acknowledges and agrees to the provisions of the Loan Documents, and hereby
waives notice of: (i) any loans or advances made by the Lenders to any of
the Borrowers; (ii) acceptance of this Guaranty; (iii) any amendment
or extension of the Credit Agreement or of any other Loan Documents; (iv) the
execution and delivery by the Borrowers and the Agent or any Lender of any
other loan or credit agreement or of any Borrower’s execution and delivery of
any promissory notes or other documents arising under the Loan Documents or in
connection with the Collateral; (v) the occurrence of any breach by any
Borrower under any of the Loan Documents or an Event of Default; (vi) the
Agent’s or any Lender’s transfer or disposition of the Guaranteed Obligations,
or any part thereof; (vii) sale or foreclosure (or posting or
advertising for sale or foreclosure) of any collateral for the Guaranteed
Obligations; (viii) protest, proof of


 


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non-payment or default by
any Borrower; and (ix) any other action at any time taken or omitted by
the Agent or any Lender, and, generally, all demands and notices of every kind
in connection with this Guaranty, the Loan Documents, any documents or
agreements evidencing, securing or relating to any of the Guaranteed
Obligations and/or the obligations hereby guaranteed.


 


(b)                                 Without
limitation to any other waivers contained in this Guaranty, each Guarantor
hereby waives, to the fullest extent permitted by law:  (i) presentment, demand, protest,
diligence, notice of demand, notice of protest, notice of dishonor, notice of
nonperformance, notice of non-payment, notice of acceptance and all other
notices and other formalities which may be required by statute, rule of
law or otherwise to preserve intact Agent’s rights against each Guarantor under
this Guaranty; (ii) all benefits and defenses under California Civil Code
(“CC”) Section 2849, including the right, if any, to the benefit of, or to
direct application of, any security hypothecated to, the Agent, until all the
Obligations, howsoever arising, shall have been paid and/or performed; (iii) all
benefits and defenses under CC Section 2845, including the right to
require the Agent to proceed against any Borrower or to pursue any other remedy
in the Agent’s power; (iv) all benefits and defenses under CC Section 2850,
including the right to require the Agent to proceed against or exhaust any
security or Collateral the Agent may hold; (v) any defense arising by
reason of any disability or other defense of any Borrower or by reason of the
cessation from any cause whatsoever of the liability of any Borrower other than
full payment of and full performance of the Obligations; (vi) all statutes
of limitations as a defense in any action or proceeding brought against any
Guarantor by the Agent, to the fullest extent permitted by law (and each
Guarantor agrees that any partial payment by any Borrower or other
circumstances which operate to toll any statute of limitations as to any
Borrower shall also operate to toll the statute of limitations as to any
Guarantor); (vii) any defense based upon Agent’s failure to perfect or
continue the perfection of any lien or security interest in Collateral that
secures the Obligations; (viii) any defense arising due to any failure by the
Agent to inform any Guarantor of any facts the Agent may now or
hereafter know about any Borrower or any Borrower’s financial condition; (ix) all
benefits and defenses under CC Section 2809 purporting to reduce a
guarantor’s obligations in proportion to the principal obligation, and each
Guarantor agrees that by doing so such Guarantors’ liability may be larger
in amount or more burdensome than that of the Borrowers; (x) all benefits and
defenses under CC Section 2810, and each Guarantor agrees that by doing so
such Guarantor is liable even if the Borrowers had no liability at the time of
execution of the Loan Documents or thereafter ceased to be liable; (xi) all
rights and benefits of CC Section 2819, and each Guarantor agrees that by
doing so such Guarantors’ liability shall continue even if the Agent alters any
Obligation in any respect or the Agent’s remedies or rights against any
Borrower are in any way impaired or suspended without such Guarantors’ consent,
whether or not due to the act or omission of the Agent; (xii) any defense based
on any action taken or omitted by the Agent in any bankruptcy or other voluntary
or involuntary proceeding, in or out of court, for the adjustment of
debtor-creditor relationships; and (xiii) all other rights and remedies now or
hereafter accorded by applicable law to sureties or guarantors.


 


(c)                                  Without
limiting the generality of the foregoing and without limitation to any other
waivers in this Guaranty, each Guarantor waives, to the fullest extent
permissible by law, all benefits and defenses under CC Sections 2847 and 2848
and agrees that each Guarantor shall have no right of subrogation or
reimbursement against any Borrower and no right of contribution against any
other guarantor or pledgor unless and until all Obligations have been satisfied
and


 


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the Agent has released,
transferred or disposed of all of its right, title and interest in any
Collateral.


 


(d)                                 Without
limiting the generality of the foregoing or any other waivers in this Guaranty,
each Guarantor hereby waives, to the fullest extent permitted by law, any and
all rights and defenses a guarantor or surety would otherwise have under
applicable California law to the enforcement of this Guaranty, including, but
not limited to, all rights and defenses arising under or by virtue of or
pursuant to the provisions of CC Sections 2787 to 2855, inclusive, and CC
Sections 2899 and 3433, and any additional rights or defenses relating any of
the foregoing statutory provisions pursuant to any applicable judicial
decisions of the State of California.


 


(e)                                  Each
Guarantor acknowledges that the waivers made by such Guarantor in this Guaranty
are made knowing that their intent is to deprive the Guarantors of the benefits
and defenses that would or could otherwise be available to the Guarantors under
the statutory provisions referenced herein.


 


Section 1.6.                                   Payment
of Expenses. In the event that any Guarantor should breach or fail to
timely perform any provision of this Guaranty, the Guarantors shall pay on
demand to the Agent all costs and expenses (including court costs and
reasonable attorneys’ fees) incurred by the Agent in the enforcement hereof or
the preservation of the Agent’s rights hereunder. The covenant contained in
this Section 1.6 shall survive the payment of the Guaranteed
Obligations.


 


Section 1.7.                                   Effect
of Bankruptcy. In the event that, pursuant to any insolvency, bankruptcy,
reorganization, receivership, administration or other debtor relief law, or any
judgment, order or decision thereunder, the Agent or any Lender must rescind or
restore any payment, or any part thereof, received by the Agent or any
Lender in satisfaction of the Guaranteed Obligations, as set forth herein, any
prior release or discharge from the terms of this Guaranty given to any
Guarantor by the Agent shall be without effect, and this Guaranty shall remain
in full force and effect. It is the intention of each Guarantor that such
Guarantor’s obligations hereunder shall not be discharged except by such
Guarantor’s performance of such obligations and then only to the extent of such
performance.


 


Section 1.8.                                   Waiver
of Subrogation, Reimbursement and Contribution. Notwithstanding anything to
the contrary contained in this Guaranty and without limitation to any other
waivers contained in this Guaranty, each Guarantor hereby unconditionally and
irrevocably waives, releases and abrogates any and all rights it may now
or hereafter have under any agreement, at law or in equity (including, without
limitation, any law subrogating such Guarantor to the rights of the Agent or
the Lenders), to assert any claim against or seek contribution, indemnification
or any other form of reimbursement from the Borrower or any other party
liable for payment of any or all of the Guaranteed Obligations for any payment
made by such Guarantor under or in connection with this Guaranty or otherwise
until ninety one (91) days after the Agent has received payment in full of
the Obligations.


 


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ARTICLE II

EVENTS AND CIRCUMSTANCES NOT REDUCING OR 

DISCHARGING GUARANTOR’S OBLIGATIONS


 


Each Guarantor hereby
consents and agrees to each of the following, and agrees that such Guarantor’s
obligations under this Guaranty shall not be released, diminished, impaired,
reduced or adversely affected by any of the following, and without limitation
to any other waivers contained in this Guaranty waives any common law,
equitable, statutory or other rights (including without limitation rights to
notice) which the Guarantor might otherwise have as a result of or in
connection with any of the following:


 


Section 2.1.                                   Modifications.
Any renewal, extension, increase, modification, alteration or rearrangement of
all or any part of the Guaranteed Obligations, the Credit Agreement, the
other Loan Documents, or any other document, instrument, contract or
understanding between the Borrowers and the Agent or any Lender, or any other
parties, pertaining to the Guaranteed Obligations or any failure of the Agent
to notify the Guarantor of any such action.


 


Section 2.2.                                   Adjustment.
Any adjustment, indulgence, forbearance or compromise that might be granted or
given by the Agent or any Lender to any Borrower or any other guarantor.


 


Section 2.3.                                   Condition
of Borrowers or Guarantors. (a) The insolvency, bankruptcy,
reorganization, arrangement, adjustment, composition, liquidation, disability,
dissolution, administration, receivership or lack of power of any Borrower, any
Guarantor, any other guarantor or any other party at any time liable for the
payment of all or part of the Guaranteed Obligations; or any dissolution
of any Borrower or any Guarantor, (b) Agent’s or any Lender’s election, in
any proceeding instituted under (i) the United States Bankruptcy Code, of
the application of Section 1111(b)(2) of the United States Bankruptcy
Code or any successor statute or (ii) any equivalent or analogous
provision or procedure under the laws of any other applicable jurisdiction (an “Analogous
Provision”), (c) any borrowing or any grant of a security interest
under Section 364 of the United States Bankruptcy Code or an Analogous
Provision or (d) any action taken or omitted by the Agent or any Lender in
any bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation, administration, receivership or other like proceeding
(each, an “Insolvency Proceeding”)
involving any Borrower, any Guarantor or any other guarantor, including any
election to have the Agent’s or any Lender’s claim allowed as being secured,
partially secured or unsecured, any extension of credit by the Agent or any Lender
to any Borrower, any Guarantor or any other guarantor in any Insolvency
Proceeding and the taking and holding by the Agent or any Lender of any
security for any such extension of credit, (d) any sale, lease or transfer
of any or all of the assets of any Borrower, any Guarantor or any other
guarantor, or (e) any changes in the shareholders, partners or members of any
Borrower, any Guarantor or any other guarantor; or any reorganization of any Borrower
or any Guarantor.


 


Section 2.4.                                   Invalidity
of Guaranteed Obligations. The invalidity, illegality or unenforceability
of all or any part of the Guaranteed Obligations, or any document or
agreement executed in connection with the Guaranteed Obligations, for any
reason whatsoever, including without limitation the fact that (a) the
Guaranteed Obligations, or any part thereof, exceed the amount permitted
by law, (b) the act of creating the Guaranteed Obligations or any part thereof
is


 


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ultra vires, (c) the
officers or representatives executing the Credit Agreement or the other Loan
Documents or otherwise creating the Guaranteed Obligations acted in excess of
their authority, (d) the Guaranteed Obligations violate applicable usury
laws, (e) any Borrower has valid defenses, claims or offsets (whether at
law, in equity or by agreement) (other than a defense based upon the actual
payment of the Guaranteed Obligations sought to be enforced), which render the
Guaranteed Obligations wholly or partially uncollectible from such Borrower, (f) the
creation, performance or repayment of the Guaranteed Obligations (or the
execution, delivery and performance of any document or instrument representing part of
the Guaranteed Obligations or executed in connection with the Guaranteed
Obligations, or given to secure the repayment of the Guaranteed Obligations) is
illegal, uncollectible or unenforceable, (g) the Credit Agreement or any
of the other Loan Documents have been forged or otherwise are irregular or not
genuine or authentic, (h) the failure of consideration for the granting of
this Guaranty, (i) the expiration of any statute of limitations affecting
the liability of any Guarantor hereunder, the liability of any Borrower or any
guarantor under the Loan Documents; it being agreed that each Guarantor shall
remain liable hereon regardless of whether any Borrower or any other Person be
found not liable on the Guaranteed Obligations or any part thereof for any
reason.


 


Section 2.5.                                   Release
of Obligors. Any full or partial release of the liability of any Borrower
on the Guaranteed Obligations, or any part thereof, or of any
co-guarantors, or any other Person now or hereafter liable, whether directly or
indirectly, jointly, severally, or jointly and severally, to pay, perform,
guarantee or assure the payment of the Guaranteed Obligations, or any part thereof,
it being recognized, acknowledged and agreed by each Guarantor that any Guarantor
may be required to pay the Guaranteed Obligations in full without
assistance or support of any other party, and each Guarantor has not been
induced to enter into this Guaranty on the basis of a contemplation, belief,
understanding or agreement that other Persons will be liable to pay the
Guaranteed Obligations, or that the Agent or the Lenders will look to other
Persons to pay the Guaranteed Obligations.


 


Section 2.6.                                   Other
Collateral. The taking or accepting of any other security, collateral or
guaranty, or other assurance of payment, for all or any part of the
Guaranteed Obligations.


 


Section 2.7.                                   Release
of Collateral. Any release, surrender, exchange, subordination,
deterioration, waste, loss or impairment (including without limitation
negligent, willful, unreasonable or unjustifiable impairment) of any
collateral, property or security at any time existing in connection with, or
assuring or securing payment of, all or any part of the Guaranteed
Obligations, or the application by any Borrower of the proceeds of the Loans
for purposes other than the purposes represented by such Borrower to the Agent
and Lenders or intended or understood by the Agent and Lenders or Guarantors.


 


Section 2.8.                                   Care
and Diligence. The failure of the Agent or any Lender to diligently
exercise its rights and remedies under any of the Loan Documents, or to
exercise diligence or reasonable care in the preservation, protection,
enforcement, sale or other handling or treatment of all or any part of
such collateral, property or security, including but not limited to any
neglect, delay, omission, failure or refusal of the Agent or any Lender (a) to
take or prosecute any action for the collection of any of the Guaranteed
Obligations or (b) to foreclose, or initiate any action to foreclose, or,
once commenced, prosecute to completion any action to foreclose upon any
security therefor, or (c) to take or prosecute any action in connection
with any instrument or


 


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agreement evidencing or
securing all or any part of the Guaranteed Obligations, (d) to take
any other acts or omissions of which vary, increase or decrease the risk on any
Guarantor, other than any loss, damage liability or cost arising from the Agent’s
or such Lender’s gross negligence or willful misconduct following the Agent’s
taking title to the Collateral.


 


Section 2.9.                                   Lender Disclosure. The failure of the
Agent or the Lenders to disclose to the Guarantors (a) any facts it may now
or hereafter know regarding any Borrower, regardless of whether the Agent or
the Lenders have reason to believe that any such facts materially increase the
risk beyond that which any Guarantor intends to assume or has reason to believe
that such facts are unknown to such Guarantor, each Guarantor acknowledging
that it is fully responsible for being and keeping informed of the financial
condition and affairs of the Borrowers, or (b) any default, demand of
performance or notice of acceleration to the Borrowers or any other Person with
respect to the Loans or the Guaranteed Obligations.


 


Section 2.10.                             Unenforceability.
The fact that any collateral, security, security interest or lien contemplated or
intended to be given, created or granted as security for the repayment of the
Guaranteed Obligations, or any part thereof, shall not be properly
perfected or created, or shall prove to be unenforceable or subordinate to any
other security interest or lien, it being recognized and agreed by each Guarantor
that such Guarantor is not entering into this Guaranty in reliance on, or in
contemplation of the benefits of, the validity, enforceability, collectibility
or value of any of the collateral for the Guaranteed Obligations.


 


Section 2.11.                             Offset.
The Guaranteed Obligations and the liabilities and obligations of each Guarantor
to the Agent hereunder shall not be reduced, discharged or released by reason
of any existing or future right of offset, claim or defense (other than a
defense based upon the actual payment of the Guaranteed Obligations sought to
be enforced) of any Borrower against the Agent, any Lender or any other Person,
or against payment of the Guaranteed Obligations, whether such right of offset,
claim or defense arises in connection with the Guaranteed Obligations (or the
transactions creating the Guaranteed Obligations) or otherwise.


 


Section 2.12.                             Merger.
The reorganization, merger or consolidation of any Borrower into or with any
Person.


 


Section 2.13.                             Preference.
Any payment by any Borrower to the Agent or any Lender is held to constitute a
preference under bankruptcy laws, or for any reason the Agent or such Lender is
required to refund such payment or pay such amount to such Borrower or someone
else.


 


Section 2.14.                             Attempted Revocation. Any
revocation or repudiation hereof by any Guarantor or the revocation or
repudiation of any of the Loan Documents by any Borrower or any other Person,
including any right any Guarantor might have to revoke this Guaranty pursuant
to the terms of any of the Loan Documents.


 


Section 2.15.                             Surety Defenses. Any other
suretyship defense that might, but for the terms hereof, be available to any Guarantor,
including without limitation, any statute or rule of law which provides
that the obligation of a surety must be neither larger in amount nor in any
other aspects more burdensome than that of any Borrower.


 


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Section 2.16.                             Other
Actions Taken or Omitted. Any other action taken or omitted to be taken
with respect to the Loan Documents, the Guaranteed Obligations, or the security
and collateral therefor, other than any loss, damage liability or cost arising
from the Agent’s gross negligence or willful misconduct following the Agent’s
taking title to the Collateral, whether or not such action or omission
prejudices any Guarantor or increases the likelihood that such Guarantor will
be required to pay the Guaranteed Obligations pursuant to the terms hereof, it
being the unambiguous and unequivocal intention of each Guarantor that such Guarantor
shall be obligated to pay the Guaranteed Obligations when due, notwithstanding
any occurrence, circumstance, event, action, or omission whatsoever, whether
contemplated or uncontemplated, and whether or not otherwise or particularly
described herein, which obligation shall be deemed satisfied only upon the full
and final payment and satisfaction of the Guaranteed Obligations.


 


ARTICLE III

REPRESENTATIONS AND WARRANTIES


 


To induce the Agent and
the Lenders to enter into the Loan Documents and extend credit to the Borrowers,
each Guarantor jointly and severally represents and warrants to the Agent and
the Lenders as follows, as of the date hereof, and as of each date that the
Lenders make a Term Loan or Advance to any Borrower under the Credit Agreement:


 


Section 3.1.                                   Existence.
Each Guarantor is duly incorporated and validly existing under the laws of its
jurisdiction of incorporation.


 


Section 3.2.                                   Benefit.
Each Guarantor is an Affiliate of the Parent and has received, or will receive,
direct or indirect benefit from the making of this Guaranty with respect to the
Guaranteed Obligations.


 


Section 3.3.                                   Familiarity
and Reliance. Each Guarantor is familiar with, and has independently
reviewed books and records regarding, the financial condition of the Borrowers
and is familiar with the value of any and all collateral intended to be created
as security for the payment of the Loans or Guaranteed Obligations; however, each
Guarantor is not relying on such financial condition or the collateral as an
inducement to enter into this Guaranty.


 


Section 3.4.                                   No
Representations by the Agent and Lenders. None of the Agent, the Lenders,
nor any other party has made any representation, warranty or statement to any Guarantor
in order to induce such Guarantor to execute this Guaranty.


 


Section 3.5.                                   Guarantors’
Financial Condition. As of the date hereof , and after giving effect to
this Guaranty and the contingent obligation evidenced hereby, each Guarantor
is, and will be, solvent, and has and will have assets which, fairly valued,
exceed its obligations, liabilities (including contingent liabilities) and
debts, and has and will have property and assets sufficient to satisfy and
repay its obligations and liabilities.


 


Section 3.6.                                   Legality.
This Guaranty has been duly authorized
by all necessary corporate action and the execution, delivery and
performance by each Guarantor of this Guaranty and the consummation of the
transactions contemplated hereunder do not, and will not, contravene or
conflict with its constitutional documents or any law, statute or regulation
whatsoever to which such Guarantor is subject or constitute a default (or an
event which with


 


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notice or lapse of time
or both would constitute a default) under, or result in the breach of, any
indenture, mortgage, deed of trust, charge, lien, or any contract, agreement or
other instrument to which such Guarantor is a party or which may be
applicable to such Guarantor. This Guaranty is a legal and binding obligation
of each Guarantor and is enforceable in accordance with its terms, except as
limited by bankruptcy, insolvency or other laws of general application relating
to the enforcement of creditors’ rights.


 


Section 3.7.                                   Financial
Statements. Any and all balance sheets, net worth statements and other
financial data that have been given or may be given to the Agent with
respect to each Guarantor did or will, at the time of such delivery, fairly and
accurately present the financial condition of such Guarantor in all material
respects.


 


Section 3.8.                                   Representations
and Warranties of Borrowers. All representations and warranties made by the
Borrowers with respect to the Guarantors in the Credit Agreement are true and
correct in all material respects.


 


All representations and
warranties made by each Guarantor herein shall survive the execution hereof.


 


ARTICLE IV


 


SUBORDINATION OF CERTAIN INDEBTEDNESS


 


Section 4.1.                                   Subordination
of All Guarantor Claims. As used herein, the term “Guarantor Claims”
shall mean all debts and liabilities of the Borrowers to any Guarantor, whether
such debts and liabilities now exist or are hereafter incurred or arise, or
whether the obligations of the Borrowers thereon be direct, contingent,
primary, secondary, several, joint and several, or otherwise, and irrespective
of whether such debts or liabilities be evidenced by note, contract, open
account, or otherwise, and irrespective of the Person or Persons in whose favor
such debts or liabilities may, at their inception, have been, or may hereafter
be created, or the manner in which they have been or may hereafter be
acquired by any Guarantor. The Guarantor Claims shall include without limitation
all rights and claims of any Guarantor against the Borrowers (arising as a
result of subrogation or otherwise) as a result of such Guarantors’ payment of
all or a portion of the Guaranteed Obligations. Upon the occurrence of a Default
or an Event of Default, no Guarantor shall receive or collect, directly or
indirectly, from any Borrower or any other party any amount upon the Guarantor
Claims.


 


Section 4.2.                                   Claims
in Bankruptcy. In the event that, pursuant to any insolvency, bankruptcy,
reorganization, receivership, administration or other debtor relief law, or any
judgment, order or decision involving any Guarantor as debtor, the Agent shall
have the right to prove its claim in any such proceeding so as to establish its
rights hereunder and receive directly from the receiver, trustee or other court
custodian dividends and payments which would otherwise be payable upon
Guarantor Claims. Each Guarantor hereby assigns such dividends and payments to
the Agent for the benefit of the Lenders. Should the Agent receive, for
application against the Guaranteed Obligations, any such dividend or payment which
is otherwise payable to any Guarantor, and which, as between such Borrower and
such Guarantor,


 


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shall constitute a credit
against the Guarantor Claims, then upon payment to the Agent in full of the Guaranteed
Obligations, such Guarantor shall become subrogated to the rights of the Agent
to the extent that such payments to the Agent on the Guarantor Claims have
contributed toward the liquidation of the Guaranteed Obligations, and such
subrogation shall be with respect to that proportion of the Guaranteed
Obligations which would have been unpaid if the Agent had not received
dividends or payments upon the Guarantor Claims.


 


Section 4.3.                                   Payments
Held in Trust. Notwithstanding anything to the contrary in this Guaranty,
in the event that any Guarantor shall receive any funds, payments, claims or
distributions which are prohibited by this Guaranty, such Guarantor agrees to
hold in trust for the Agent, an amount equal to the amount of all funds,
payments, claims or distributions so received, and agrees that it shall have
absolutely no dominion over the amount of such funds, payments, claims or
distributions so received except to pay such funds, payments, claims and/or
distributions promptly to the Agent, and each Guarantor covenants promptly to
pay the same to the Agent.


 


Section 4.4.                                   Liens
Subordinate. Each Guarantor agrees that any liens, security interests,
judgment liens, charges or other encumbrances upon any Borrowers’ assets
securing payment of the Guarantor Claims shall be and remain inferior and
subordinate to any liens, security interests, judgment liens, charges or other
encumbrances upon such Borrowers’ assets securing payment of the Guaranteed
Obligations, regardless of whether such encumbrances in favor of any Guarantor
or the Agent presently exist or are hereafter created or attach. Until ninety
one (91) days after the Obligations shall have been paid in full and the
Guaranteed Obligations fully satisfied, without the prior written consent of
the Agent, no Guarantor shall (a) exercise or enforce any creditor’s right
it may have against any Borrower, or (b) foreclose, repossess,
sequester or otherwise take steps or institute any action or proceedings (judicial
or otherwise, including without limitation the commencement of, or joinder in,
any liquidation, bankruptcy, rearrangement, debtor’s relief or insolvency
proceeding) to enforce any liens, mortgages, deeds of trust, security
interests, collateral rights, judgments or other encumbrances on assets of any
Borrower held by such Guarantor.


 


ARTICLE V


 


MISCELLANEOUS


 


Section 5.1.                                   No
Waiver; Cumulative Remedies; Compliance with Laws. No failure or delay by
the Agent or any Lender in exercising any right, power or remedy under the Loan
Documents shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy under the Loan
Documents. The remedies provided in the Loan Documents are cumulative and not
exclusive of any remedies provided by law. The Agent may comply with any
applicable state or federal law requirements in connection with a disposition
of the Collateral and such compliance will not be considered adversely to
affect the commercial reasonableness of any sale of the Collateral.


 


10

















 


Section 5.2.                                   Enforcement.
The Agent shall have the right to enforce this Guaranty in separate actions
against any Guarantor, or by an action against any other Person liable for the
Guaranteed Obligations.


 


Section 5.3.                                   Severability
of Provisions. Any provision of this Guaranty which is prohibited or
unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof.


 


Section 5.4.                                   Amendments.
This Guaranty may be amended only by an instrument in writing executed by
the party or an authorized representative of the party against whom such
amendment is sought to be enforced.


 


Section 5.5.                                   Parties
Bound; Assignment. This Guaranty shall be binding upon and inure to the
benefit of the parties hereto and their respective successors, assigns and
legal representatives; provided, however, that no Guarantor may, without the
prior written consent of the Agent, assign any of its rights, powers, duties or
obligations hereunder.


 


Section 5.6.                                   Headings.
Article, Section and subsection headings in this Guaranty are
included herein for convenience of reference only and shall not constitute a part of
this Guaranty for any other purpose.


 


Section 5.7.                                   Recitals.
The recital and introductory paragraphs hereof are a part hereof, form a
basis for this Guaranty and shall be considered prima facie evidence of the
facts and documents referred to therein.


 


Section 5.8.                                   Telefacsimile
Execution. Delivery of an executed signature page to this Guaranty by
telefacsimile shall be equally as effective as delivery of an original executed
signature page of this Guaranty. Any party delivering an executed signature
page of this Guaranty by telefacsimile also shall deliver an original
executed signature page of this Guaranty but the failure to deliver an
original executed signature page shall not affect the validity,
enforceability, and binding effect of this Guaranty.


 


Section 5.9.                                   Rights
and Remedies. If any Guarantor becomes liable for any indebtedness owing by
any Borrower to the Agent or Lenders, by endorsement or otherwise, other than
under this Guaranty, such liability shall not be in any manner impaired or
affected hereby and the rights of the Agent hereunder shall be cumulative of
any and all other rights that the Agent and the Lenders may ever have
against such Guarantor. The exercise by the Agent of any right or remedy
hereunder or under any other instrument, or at law or in equity, shall not
preclude the concurrent or subsequent exercise of any other right or remedy.


 


Section 5.10.                             Complete
Agreement. This Guaranty, together with the Loan Documents, comprises the
complete and integrated agreement of the parties on the subject matter hereof
and supersedes all prior agreements, written or oral, on the subject matter
hereof.


 


Section 5.11.                             Cooperation.
Each Guarantor acknowledges that the Agent and its successors and assigns may,
subject to any applicable limitations set forth in the Credit Agreement assign,
or sell participations in, its rights under the Credit Agreement pursuant to
the


 


11

















 


terms thereof. Each Guarantor
shall reasonably cooperate with the Agent and Lenders in effecting any such assignment
or participation.


 


Section 5.12.                             Reinstatement
in Certain Circumstances. If at any time any payment of the principal of or
interest on the Term Loans, any amount payable on the Advances or any other
amount payable by any Borrower under the Loan Documents relating to the Term
Loans or the Advances is rescinded or must be otherwise restored or returned
upon the insolvency, bankruptcy or reorganization of any Borrower or otherwise,
each Guarantors’ obligations hereunder with respect to such payment shall be
reinstated as though such payment has been due but not made at such time.


 


Section 5.13.                             Survival.
Notwithstanding anything to the contrary contained in this Guaranty or in any
other Loan Document, this Guaranty shall continue in full force and effect
until full indefeasible payment of the Guaranteed Obligations.


 


Section 5.14.                             Choice
of Law and Venue; Judicial Reference; Waiver of Jury Trial; Service of Process.


 


(a)                                  THE
VALIDITY OF THIS GUARANTY, THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT
HEREOF, AND THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL MATTERS
ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA WITHOUT REGARD
TO ITS CONFLICTS OF LAWS PRINCIPLES.


 


(b)                                 EACH
GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS
PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF
CALIFORNIA LOCATED IN LOS ANGELES COUNTY AND OF THE FEDERAL COURTS LOCATED IN
THE CENTRAL DISTRICT OF CALIFORNIA, AND ANY APPELLATE COURT FROM ANY THEREOF,
IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY OR ANY
OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND
EACH GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN
RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN
SUCH CALIFORNIA STATE OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT.
EACH GUARANTOR HEREBY AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND BINDING UPON IT AND MAY BE ENFORCED IN
OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY
LAW. NOTHING IN THIS GUARANTY SHALL AFFECT ANY RIGHT THAT THE AGENT OR ANY
LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO OR
ARISING OUT OF THIS GUARANTY OR ANY LOAN DOCUMENT AGAINST ANY GUARANTOR OR ITS
ASSETS OR PROPERTIES IN THE COURTS OF ANY JURISDICTION WHERE SUCH GUARANTOR OR
ITS ASSETS OR PROPERTIES MAY BE LOCATED OR IN WHICH IT OTHERWISE MAY BE
SUBJECT TO JURISDICTION.


 


12

















 


(c)                                  EACH GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO (i) ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY OR THE
LOAN DOCUMENTS IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION; (ii) THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT; AND (iii) ANY RIGHT IT MAY HAVE,
HOWEVER ARISING, TO REMOVE OR TRANSFER ANY SUIT, ACTION OR PROCEEDING BROUGHT
AGAINST IT IN CONNECTION WITH OR ARISING OUT OF THIS GUARANTY OR ANY LOAN
DOCUMENT IN A STATE COURT OF THE UNITED STATES OF AMERICA TO ANY FEDERAL COURT
OF THE UNITED STATES OF AMERICA IF SUCH FEDERAL COURT OF THE UNITED STATES OF AMERICA
WOULD NOT HAVE OR ACCEPT JURISDICTION THEREOF.


 


(d)                                 ALL
CLAIMS, CAUSES OF ACTION OR OTHER DISPUTES CONCERNING THIS GUARANTY AND THE
MATTERS CONTEMPLATED HEREBY (EACH A “CLAIM”), ARISING IN A PROCEEDING IN
CALIFORNIA STATE COURT INCLUDING ANY AND ALL QUESTIONS OF LAW OR FACT RELATING
THERETO, SHALL, AT THE WRITTEN REQUEST OF THE AGENT, BE DETERMINED BY JUDICIAL
REFERENCE PURSUANT TO THE CALIFORNIA CODE OF CIVIL PROCEDURE (“REFERENCE”).
THE PARTIES SHALL SELECT A SINGLE NEUTRAL REFEREE, WHO SHALL BE A RETIRED STATE
OR FEDERAL JUDGE. IN THE EVENT THAT THE PARTIES CANNOT AGREE UPON A REFEREE,
THE REFEREE SHALL BE APPOINTED BY THE COURT. THE REFEREE SHALL REPORT A
STATEMENT OF DECISION TO THE COURT. NOTHING IN THIS PARAGRAPH SHALL LIMIT THE
RIGHT OF ANY PARTY AT ANY TIME TO EXERCISE SELF-HELP REMEDIES, FORECLOSE
AGAINST COLLATERAL OR OBTAIN PROVISIONAL REMEDIES. THE PARTIES SHALL BEAR THE
FEES AND EXPENSES OF THE REFEREE EQUALLY UNLESS THE REFEREE ORDERS OTHERWISE. THE
REFEREE SHALL ALSO DETERMINE ALL ISSUES RELATING TO THE APPLICABILITY,
INTERPRETATION, AND ENFORCEABILITY OF THIS PARAGRAPH. THE PARTIES ACKNOWLEDGE
THAT THE CLAIMS WILL NOT BE ADJUDICATED BY A JURY.


 


(e)                                  OTHER
THAN WITH RESPECT TO ANY PROCEEDING IN THE STATE COURTS OF CALIFORNIA, EACH
GUARANTOR HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS GUARANTY OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH GUARANTOR CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER.


 


(f)                                    EACH
GUARANTOR HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS THE
ADMINISTRATIVE BORROWER, AS ITS DESIGNEE,


 


13

















 


APPOINTEE AND AGENT TO
RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS
PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS
WHICH MAY BE SERVED IN ANY ACTION OR PROCEEDING RELATING TO OR ARISING OUT
OF THIS GUARANTY OR THE LOAN DOCUMENTS. IF FOR ANY REASON SUCH DESIGNEE, APPOINTEE
AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, EACH GUARANTOR AGREES TO
DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT ON THE TERMS AND FOR THE PURPOSES
OF THIS PROVISION SATISFACTORY TO THE AGENT. EACH GUARANTOR WAIVES PERSONAL
SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF
PROCESS MAY BE MADE BY HAND DELIVERY TO THE ADMINISTRATIVE BORROWER AT ITS
ADDRESS SET FORTH IN THE CREDIT AGREEMENT. EACH GUARANTOR SHALL TAKE SUCH
ACTIONS AS ARE REASONABLE, INCLUDING THE EXECUTION AND FILING OF ANY AND ALL
FURTHER AGREEMENTS, INSTRUMENTS AND OTHER DOCUMENTS AS MAY BE NECESSARY,
TO FULLY IMPLEMENT AND EFFECT SUCH APPOINTMENTS AND TO CONTINUE THEM IN FULL
FORCE AND EFFECT. EACH GUARANTOR HEREBY CONSENTS TO SERVICE OF PROCESS AS AFORESAID.
NOTHING IN THIS GUARANTY
WILL AFFECT THE RIGHT OF ANY PARTY TO THIS GUARANTY TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW. EACH GUARANTOR IRREVOCABLY AGREES AND UNDERTAKES
TO ENTER ITS UNCONDITIONAL APPEARANCE WITHIN FORTY-FIVE (45) DAYS AFTER THE
COMPLETION OF SERVICE ON THE AUTHORIZED AGENT AS PROVIDED IN THIS SECTION.


 


Section 5.15.                             Notices.
All notices and other communications hereunder to Agent shall be in writing and
shall be mailed, sent or delivered in accordance with the Credit Agreement. All
notices and other communications hereunder to any Guarantor shall be in writing
and shall be (a) personally
delivered, (b) sent by overnight courier of international reputation, (c) transmitted
by telecopy, or (d) sent as electronic mail, to the following (or at such
other business address, telecopier number, or e-mail address as the Guarantor may hereafter
designate in writing to the other parties hereto):


 


	
   

  	
  EMRISE Electronics Ltd.

  
	
   

  	
  Brunswick Road, Cobbs Wood

  
	
   

  	
  Ashford, Kent TN23 1EH

  
	
   

  	
  United Kingdom

  
	
   

  	
  Attn: D. John Donovan

  
	
   

  	
   

  
	
  With a copy to:

  	
  Emrise Corporation

  
	
   

  	
  9485 Haven Avenue, Suite 100

  
	
   

  	
  Rancho Cucamonga, CA 91730

  
	
   

  	
  Attn: D. John Donovan

  
	
   

  	
   

  
	
   

  	
  Rutan & Tucker, LLP

  
	
   

  	
  611 Anton Blvd., Suite 1400

  
	
   

  	
  Costa Mesa, CA 92626

  
	
   

  	
  Attn: Larry A. Cerutti, Esq.

  
	
   

  	
  Fax No.: (714) 546-9035

  



 


14

















 


Section 5.16.                             Severability.
Any provision of this Guaranty which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
portions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.


 


[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT
BLANK]


 


15

















 


IN WITNESS WHEREOF, each Guarantor
has executed and delivered this Guaranty as a deed as of the date first set
forth above.


 


	
   

  	
   

  	
  GUARANTORS:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EMRISE ELECTRONICS LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /S/ G.M.J. JEFFRIES

  	
   

  
	
   

  	
   

  	
  Name:

  	
  G.M.J Jeffries

  	
   

  
	
   

  	
   

  	
  Title:

  	
   Director

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /S/ CARMINE T. OLIVA

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Carmine T. Oliva

  	
   

  
	
   

  	
   

  	
  Title

  	
   Director

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  XCEL POWER SYSTEMS, LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /S/ G.M.J. JEFFRIES

  	
   

  
	
   

  	
   

  	
  Name:

  	
  G.M.J Jeffries

  	
   

  
	
   

  	
   

  	
  Title:

  	
   Director

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /S/ CARMINE T. OLIVA

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Carmine T. Oliva

  	
   

  
	
   

  	
   

  	
  Title

  	
   Director

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PASCALL ELECTRONIC (HOLDINGS)

  LIMITED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /S/ G.M.J. JEFFRIES

  	
   

  
	
   

  	
   

  	
  Name:

  	
  G.M.J Jeffries

  	
   

  
	
   

  	
   

  	
  Title:

  	
   Director

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /S/ CARMINE T. OLIVA

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Carmine T. Oliva

  	
   

  
	
   

  	
   

  	
  Title

  	
   Director

  	
   

  
							



 


 


16

















 


	
   

  	
   

  	
  PASCALL ELECTRONICS LIMITED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /S/ G.M.J. JEFFRIES

  	
   

  
	
   

  	
   

  	
  Name:

  	
  G.M.J Jeffries

  	
   

  
	
   

  	
   

  	
  Title:

  	
   Director

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /S/ CARMINE T. OLIVA

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Carmine T. Oliva

  	
   

  
	
   

  	
   

  	
  Title

  	
   Director

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BELIX WOUND COMPONENTS LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /S/ G.M.J. JEFFRIES

  	
   

  
	
   

  	
   

  	
  Name:

  	
  G.M.J Jeffries

  	
   

  
	
   

  	
   

  	
  Title:

  	
   Director

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /S/ CARMINE T. OLIVA

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Carmine T. Oliva

  	
   

  
	
   

  	
   

  	
  Title

  	
   Director

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE BELIX COMPANY LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /S/ G.M.J. JEFFRIES

  	
   

  
	
   

  	
   

  	
  Name:

  	
  G.M.J Jeffries

  	
   

  
	
   

  	
   

  	
  Title:

  	
   Director

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /S/ CARMINE T. OLIVA

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Carmine T. Oliva

  	
   

  
	
   

  	
   

  	
  Title

  	
   Director

  	
   

  
							



 


17

















 


	
  Acknowledged and agreed:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  AGENT AND ARRANGER:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  GVEC RESOURCE IV INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /S/ ROBERT J. ANDERSON

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Robert J. Anderson

  	
   

  	
   

  	
   

  
	
  Title:

  	
   Authorized Signatory

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /S/ PETER PAUL MENDEL

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Peter Paul Mendel

  	
   

  	
   

  	
   

  
	
  Title:

  	
   Authorized Signatory