EXHIBIT 10.14


 


GUARANTY


 


THIS GUARANTY (this “Guaranty”) is executed as
of November 30, 2007, by CXR Anderson Jacobson SAS (the “Guarantor”),
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 Guarantor is a wholly owned subsidiary 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 Guarantor has 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.
The Guarantor hereby unconditionally, absolutely and irrevocably guarantees to
the Agent, for the benefit of the Lenders, and the Guarantor shall be 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 the Guarantor and shall continue to be effective with respect to any
Guaranteed Obligations arising or created after any attempted revocation by the
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 the 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 Guarantor. If all or any part of the Guaranteed Obligations shall
not be punctually paid when due, whether at demand, maturity, acceleration or
otherwise, the Guarantor 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 the 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 the Guarantor hereby waives any rights
which the Guarantor may have to require the Agent), in order to enforce the
obligations of the 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, the 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 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


 


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 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, the 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 the 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 the Guarantor by the
Agent, to the fullest extent permitted by law (and the 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 the 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 the 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 the
Guarantor agrees that by doing so the Guarantor’s liability may be larger in
amount or more burdensome than that of the Borrowers; (x) all benefits and
defenses under CC Section 2810, and the Guarantor agrees that by doing so the
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 the Guarantor agrees that by doing
so the Guarantor’s 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 the Guarantor’s 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 contained in this Guaranty, the Guarantor waives, to the fullest extent
permissible by law, all benefits and defenses under CC Sections 2847 and 2848
and agrees that the 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 the Agent has released, transferred or disposed of all of its right, title
and interest in any Collateral.


 


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(d)           Without
limiting the generality of the foregoing and without limitation to any other
waivers contained in this Guaranty, the 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)           The
Guarantor acknowledges that the waivers made by the Guarantor in this Guaranty
are made knowing that their intent is to deprive the Guarantor of the benefits
and defenses that would or could otherwise be available to the Guarantor under
the statutory provisions referenced herein.


 


Section 1.6.            Payment
of Expenses. In the event that the Guarantor should breach or fail to
timely perform any provision of this Guaranty, the Guarantor 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 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 the Guarantor by
the Agent shall be without effect, and this Guaranty shall remain in full force
and effect. It is the intention of the Guarantor that the Guarantor’s
obligations hereunder shall not be discharged except by the 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, the 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 the 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 the
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.


 


Section 1.9.            Limitations
on the Guaranty by the Guarantor.


 


(a)           Notwithstanding
any other term of this Guaranty, the liability of the Guarantor under this
Guaranty will be limited (without double counting) to an amount not exceeding
the greater of:


 


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(i)            the
aggregate of amounts made available under the Loan Documents from time to time
to the Guarantor to the extent that such amounts have been borrowed by,
transferred to or otherwise directly or indirectly on-lent or made available to
the Guarantor (the “Relevant French
Amounts”) and all interest, commissions, costs, fees, expenses and
other sums accruing or payable under the Loan Documents in connection with the
Relevant French Amounts; and


 


(ii)           Ninety
percent (90%) of the Adjusted Net Assets of the Guarantor calculated on the
basis of its last audited accounts available at the date of any payment under
this Guaranty.


 


(b)           For
the purpose of this clause, “Adjusted
Net Assets” of the Guarantor means the lesser of:


 


(i)            the
amount by which the book value of the total assets of the Guarantor exceeds the
total amount of its liabilities, including, without limitation, contingent
liabilities to the extent that such liabilities are or have to be included in
the accounts of the Guarantor according to generally accepted accounting
principles in France but in all cases excluding any liabilities (contingent or
otherwise) of the Guarantor under or in respect of this Guaranty (including,
without limitation, such liabilities in respect of accrued interest,
commissions and any other sums payable under any Loan Document at the date the
calculation is made); and


 


(ii)           the
amount by which the fair market value of the total assets of the Guarantor
exceeds the total amount of its liabilities, including, without limitation,
contingent liabilities to the extent that such liabilities are or have to be
included in the accounts of the Guarantor according to generally accepted
accounting principles in France, but in all cases excluding any liabilities
(contingent or otherwise) of the Guarantor under or in respect of this Guaranty
(including, without limitation, such liabilities in respect of accrued
interest, commissions and any other sums payable under any Loan Document at the
date the calculation is made).


 


ARTICLE II

EVENTS AND CIRCUMSTANCES NOT REDUCING OR 

DISCHARGING GUARANTOR’S OBLIGATIONS


 


The Guarantor hereby consents and agrees to each of
the following, and agrees that the 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


 


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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 Guarantor. (a) The insolvency, bankruptcy,
arrangement, adjustment, composition, liquidation, disability, dissolution or
lack of power of any Borrower, the 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 the Guarantor, (b) Agent’s
or any Lender’s election, in any proceeding instituted under the United States
Bankruptcy Code, of the application of Section 1111(b)(2) of the United States
Bankruptcy Code or any successor statute, (c) any borrowing or any grant of a
security interest under Section 364 of the United States Bankruptcy Code or (d)
any action taken or omitted by the Agent or any Lender in any bankruptcy,
insolvency, reorganization, composition, adjustment, dissolution, liquidation
or other like proceeding (each, an “Insolvency
Proceeding”) involving any Borrower, the 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, the 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, the
Guarantor or any other guarantor, or (e) any changes in the shareholders,
partners or members of any Borrower, the Guarantor or any other guarantor; or
any reorganization of any Borrower or the 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 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 the Guarantor hereunder, the liability
of any Borrower or any guarantor under the Loan Documents; it being agreed that
the 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.


 


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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 the Guarantor that the Guarantor may be
required to pay the Guaranteed Obligations in full without assistance or
support of any other party, and the 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 Guarantor.


 


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 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 the 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 Guarantor (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 the Guarantor intends to assume or has reason to believe
that such facts are unknown to the Guarantor, the 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


 


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prove to be unenforceable or subordinate to any other
security interest or lien, it being recognized and agreed by the Guarantor that
the 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 the 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 the Guarantor or the revocation or
repudiation of any of the Loan Documents by any Borrower or any other Person,
including any right the 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 the 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.


 


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 the Guarantor or increases the likelihood that the Guarantor will be
required to pay the Guaranteed Obligations pursuant to the terms hereof, it
being the unambiguous and unequivocal intention of the Guarantor that the 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, the Guarantor represents and
warrants to the Agent and the Lenders as follows,


 


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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.            Benefit.
The 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 3.2.            Familiarity
and Reliance. The 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, the
Guarantor is not relying on such financial condition or the collateral as an
inducement to enter into this Guaranty.


 


Section 3.3.            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 the Guarantor
in order to induce the Guarantor to execute this Guaranty.


 


Section 3.4.            Guarantor’s
Financial Condition. As of the date hereof , and after giving effect to
this Guaranty and the contingent obligation evidenced hereby, the 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 3.5.            Legality.
This Guaranty has been duly authorized
by all necessary corporate action and the execution, delivery and
performance by the Guarantor of this Guaranty and the consummation of the
transactions contemplated hereunder do not, and will not, contravene or
conflict with any law, statute or regulation whatsoever to which the Guarantor
is subject or constitute a default (or an event which with 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 the Guarantor is a party or which may be applicable
to the Guarantor. This Guaranty is a legal and binding obligation of the 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 3.6.            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 the Guarantor did or will, at the time of such delivery, fairly and
accurately present the financial condition of the Guarantor in all material
respects.


 


Section 3.7.            Representations
and Warranties of Borrowers. All representations and warranties made by the
Borrowers with respect to the Guarantor in the Credit Agreement are true and
correct in all material respects.


 


Section 3.8.            Special
Representations and Warranties of the Guarantor. Without limiting the
generality of the foregoing representations and warranties, the Guarantor
represents and warrants as follows:


 


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(a)           it
is a member of the group of companies of which the Parent is the parent (the “Group”),
which Group has a common business and financial strategy;


 


(b)           the
transactions contemplated by this Guaranty and the Loan Documents are aimed at
the fulfillment of the objectives designed for the Group as a whole, are not
without economic consideration for the Guarantor, and do not create an
imbalance between the respective undertakings of the various parties within the
Group;


 


(c)           the
execution and performance by the Guarantor of its obligations hereunder:


 


(i)            do
not exceed the financial capacity (as at the date hereof) of the Guarantor, and
do not constitute an abuse of the Guarantor’s credit or assets (“abus de biens sociaux”, as such term is used under the laws
of France); and


 


(ii)           have
been authorized by all corporate action required under the laws of France
(including the adoption of all such resolutions or decisions required pursuant
to Articles L. 225-35, L. 225-38 and L. 227-10 of the French Commercial Code (“Code de Commerce”)) and under the constitutive documents of
the Guarantor.


 


All representations and warranties made by the 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 the 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 the Guarantor. The Guarantor Claims shall include without limitation all
rights and claims of the Guarantor against the Borrowers (arising as a result
of subrogation or otherwise) as a result of the Guarantor’s payment of all or a
portion of the Guaranteed Obligations. Upon the occurrence of a Default or an
Event of Default, the Guarantor shall not 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 or other debtor relief law, or any judgment, order
or decision involving the 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


 


10

















 


Guarantor Claims. The 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 the Guarantor, and which, as
between such Borrower and the Guarantor, shall constitute a credit against the
Guarantor Claims, then upon payment to the Agent in full of the Guaranteed
Obligations, the 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 the Guarantor shall receive any funds, payments, claims or distributions
which are prohibited by this Guaranty, the 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 the Guarantor covenants promptly to pay the same to the Agent.


 


Section 4.4.            Liens
Subordinate. The 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 the 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, the Guarantor shall not (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 the 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


 


11

















 


the Collateral and such compliance will not be
considered adversely to affect the commercial reasonableness of any sale of the
Collateral.


 


Section 5.2.            Enforcement.
The Agent shall have the right to enforce this Guaranty in separate actions
against the 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 the Guarantor may not, 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 the 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 the 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.


 


12

















 


Section 5.11.          Cooperation.
The 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 terms thereof. The 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,
the Guarantor’s 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)           THE
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 THE
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. THE
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 THE GUARANTOR OR ITS ASSETS OR
PROPERTIES IN THE COURTS OF ANY JURISDICTION WHERE THE


 


13

















 


GUARANTOR OR ITS ASSETS OR PROPERTIES MAY BE LOCATED
OR IN WHICH IT OTHERWISE MAY BE SUBJECT TO JURISDICTION.


 


(c)           THE 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, THE 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). THE 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.


 


14

















 


(f)            THE
GUARANTOR HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS THE ADMINISTRATIVE
BORROWER, AS ITS DESIGNEE, 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, THE GUARANTOR AGREES TO DESIGNATE A NEW
DESIGNEE, APPOINTEE AND AGENT ON THE TERMS AND FOR THE PURPOSES OF THIS
PROVISION SATISFACTORY TO THE AGENT. THE 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. THE 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. THE 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. THE 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 the 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):


 


	
   

  	
   

  	
  CXR Anderson Jacobson SAS

  
	
   

  	
   

  	
  Rue de l’Ornette

  
	
   

  	
   

  	
  28410-Abondant

  
	
   

  	
   

  	
  France

  
	
   

  	
   

  	
   

  
	
  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

  



 


15

















 


Attn: Larry A. Cerutti,
Esq.


Fax No.: (714) 546-9035


 


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]


 


16

















 


IN WITNESS WHEREOF, the Guarantor has executed this
Guaranty as of the date first set forth above.


 


	
   

  	
  GUARANTOR:

  
	
   

  	
   

  
	
   

  	
  CXR ANDERSON
  JACOBSON SAS

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Carmine Thomas Oliva

  
	
   

  	
  Name:

  	
   Carmine Thomas Oliva

  
	
   

  	
  Title  

  	
  President

  
				



 


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