Document:

Exhibit 10.85

 

ALL
ASSETS DEBENTURE

 

GIVEN
BY

 

PASCALL
ELECTRONICS LIMITED

 

IN
FAVOUR OF

THE
COLLATERAL AGENT

 

 

 

    	 

    	 

    

 

THIS
DEBENTURE is made on 31s’ August 2010

 

(1)PASCALL
ELECTRONICS LIMITED (Company Number 01316674) whose registered office is at Brunswick Road, Cobbs Wood, Ashford, Kent, TN23 1EB;
(“the Chargor”); and

 

(3)CHARLES
S. BRAND of Boundary Road, Colts Neck, New Jersey 07722 (“Collateral Agent”).

 

WHEREAS

 

A)Emrise
Electronics Corporation (“Borrower”) and the Lenders are parties to that certain Stock Purchase Agreement dated as
of May 23, 2008 (the “Stock Purchase Agreement”) relating to the purchase by Borrower of all of the issued and outstanding
shares of capital stock (collectively, the “Shares”) of (i) Advanced Control Components, Inc., a New Jersey corporation
(“ACC”) owned by Custom Components, Inc., Thomas P. M, Couse. Joanne Couse and Michael Gaffney and (ii) Custom Components,
Inc. owned by Charles S. Brand. As a result of the consummation of the Stock Purchase Agreement, Borrower beneficially owned all
of the capital stock of ACC.

 

B)Pursuant
to the terms of the Stock Purchase Agreement, on 20 August 2008 Borrower issued certain subordinated secured contingent promissory
notes (to the Lenders (together, as amended, the “Subordinated Contingent Notes”) to satisfy a portion of the aggregate
consideration to be paid by Borrower for the purchase of the Shares. The Subordinated Contingent Notes were amended in November
2009 to add additional payment amounts, and to modify the payment date and terms.

 

C)Capitalised
terms used but not otherwise defined herein shall have the meanings ascribed to them in the Subordinated Contingent Notes.

 

D)Emrise
Corporation, a Delaware corporation (“Parent”), the ultimate parent of Borower, delivered a Continuing Guaranty dated
August 20, 2008 (the “Guaranty”) in favour of the Lenders pursuant to which the obligations of Borrower to the Lenders
under the Subordinated Contingent Notes were guaranteed by Parent.

 

E)On
June 7, 2010, Borrower entered into an agreement to sell its direct and indirect interests in the Shares (the “Sale Transaction”).
In connection with the Sale Transaction, the Borrower, Parent and the Lenders entered into a Master Agreement, pursuant to which
the Lenders agreed to release their lien on all of the assets or property of ACC (the “Original Collateral”) and to
amend the Subordinated Contingent Notes.

 

F)In
consideration of the Lenders agreeing to release the Original Collateral, Parent, Borrower and the Borrower’s subsidiaries
including the Chargor have entered into an Amended and Restated Security Agreement of even date set out in Schedule 1 (“Amended
Security Agreement”) under which they have granted to the Collateral Agent, for the benefit of himself and the Lenders,
a security interest in the collateral (“New Collateral”) described in the Amended Security Agreement as substitute
collateral for the Original Collateral.

 

G)The
Chargor grants this Debenture to the Collateral Agent pursuant to the Charger’s Obligations (as defined in the Amended Security
Agreement) (herein, the “Secured Liabilities”).

 

    	 

    	 

    

 

NOW
IT IS AGREED AS FOLLOWS:

 

	1.	COVENANT
                                         TO PAY

 

	1.1	The
                                         Chargor agrees with Collateral Agent that it will pay and/or discharge the Secured Liabilities
                                         when the same are due and payable by it.

 

	2.	CHARGING
                                         PROVISIONS

 

	2.1	As
                                         continuing security for the payment and/or discharge of the Secured Liabilities, the
                                         Chargor with full title guarantee charges to Collateral Agent:

 

	 	2.1.1	by
                                         way of legal mortgage, the property (if any) described in Schedule 2

 

		2.1.2	by
                                         way of fixed charge any freehold or leasehold property (excluding any property
                                         charged by clause 2.1.1) now and in the future owned by the Chargor or in which the Chargor
                                         may have an interest;

 

		2.1.3	by
                                         way of fixed charge, all buildings, fixtures and fittings (including trade fixtures
                                         and fittings) from time to time in, on or attached to any of the Charger’s freehold
                                         or leasehold property;

 

		2.1.4	by
                                         way of fixed charge all the Chargor’s plant and machinery and other equipment
                                         listed in Schedule 3 and all spare parts, replacements, modifications and additions for
                                         or to such Equipment and the benefit of all manuals, instructions, warranties and maintenance
                                         agreements relating to such Equipment;

 

		2.1.5	by
                                         way of fixed charge, any other plant, machinery, vehicles, computer equipment,
                                         furniture, tools and other equipment not disposed of in the ordinary course of the Chargor’s
                                         business not listed in Schedule 3 and all spare parts, replacements, modifications and
                                         additions for or to such Equipment and the benefit of all manuals, instructions, warranties
                                         and maintenance agreements relating to such Equipment;

 

	 	2.1.6	by
                                         way of fixed charge, all Book Debts;

 

		2.1.7	by
                                         way of fixed charge, all monies from time to time standing to the credit of the
                                         Chargor’s accounts with any bank, financial institution or other person;

 

		2.1.8	by
                                         way of fixed charge, all the Chargor’s goodwill and uncalled capital present
                                         and future;

 

		2.1.9	by
                                         way of fixed charge, all the Chargor’s Intellectual Property from time to
                                         time not disposed of in the ordinary course of the Chargor’s business;

 

		2.1.10	by
                                         way of fixed charge, all Securities from time to time owned by the Chargor or
                                         in which it has an interest;

 

		2.1.11	by
                                         way of fixed charge, all loan capital, indebtedness or liabilities on any account
                                         or in any manner owing to the Chargor from any Subsidiary of the Chargor or a member
                                         of the Chargor’s group;

 

		2.1.12	by
                                         way of fixed charge, all the Chargor’s rights and claims (including to the
                                         return of premiums) under all insurance policies in which the Chargor has an interest
                                         from time to time;

 

    	 

    	 

    

 

	 	2.1.13	by
                                         way of floating charge, all the Charger’s property, assets and rights from
                                         time to time not subject to a fixed charge under this Debenture (including any property
                                         or assets situated in Scotland).

 

	2.2	The
                                         floating charge created by clause 2.1.13 is a qualifying floating charge in accordance
                                         with paragraph 14 of Schedule B1 Insolvency Act.

 

	2.3	The
                                         floating charge created by this Debenture will automatically without notice be converted
                                         into a fixed charge over those assets concerned:

  

		2.3.1	if,
                                         without Collateral Agent’s prior written consent, the Chargor creates or attempts
                                         to create any Security Interest (other than a Permitted Security Interest) over all or
                                         any of its assets charged by way of floating charge; or

 

		2.3.2	if
                                         any person levies or attempts to levy any distress, execution or other process against
                                         such assets; or

 

		2.3.3	if
                                         any person presents a petition to wind up the Chargor or applies for an administration
                                         order;

 

	 	2.3.4	upon
                                         the enforcement of this Debenture;

 

	 	2.3.5	immediately
                                         upon the occurrence or the deemed occurrence of a Default.

 

	2.4	Collateral
                                         Agent may by notice to the Chargor at any time convert the floating charge created by
                                         clause 2.1.13 into a fixed charge as regards any of the assets specified in the notice.

 

	3.	RESTRICTIONS

 

	3.1	The
                                         Chargor agrees with Collateral Agent that it will not, without Collateral Agent’s
                                         prior written consent:

 

		3.1.1	create
                                         or permit to subsist, in favour of any person other than Collateral Agent, any Security
                                         Interest on the Charged Assets, except for any Permitted Security Interest;

 

		3.3.1	Dispose
                                         or agree to Dispose of any Charged Assets charged by way of fixed charge;

 

		3.1.1	Dispose
                                         of any Charged Assets charged by way of floating charge other than for market value in
                                         the ordinary course of business.

 

	4.	COLLATERAL
                                         AGENT

 

	4.1	The
                                         Lenders have appointed Charles S. Brand as Collateral Agent for the Lenders.

 

	4.2	The
                                         Collateral Agent is authorized by the Lenders to take such action and to exercise such
                                         powers hereunder as provided herein for and on behalf of the Lenders.

 

	4.3	In
                                         the event of the death or resignation of the Collateral Agent during the term of this
                                         Debenture the Lenders shall appoint a successor collateral agent to act under this Debenture
                                         where upon the rights of the Collateral Agent under this Debenture shall be assigned
                                         to such new collateral agent. If no such successor collateral agent shall have been so
                                         appointed by the Lenders and shall have accepted such appointment within thirty (30)
                                         days after Collateral Agent’s death or giving of notice of resignation as Collateral
                                         Agent, then Collateral Agent shall be deemed to be Thomas P. M. Couse. Upon the acceptance
                                         of any appointment as successor collateral agent hereunder by a successor collatera!
                                         agent, such successor collateral agent shall thereupon succeed to and become vested with
                                         all rights, powers, privileges, duties and obligations of Collateral Agent hereunder
                                         and the Chargor and the Collateral Agent shall do such things and execute and register
                                         such documents as may be necessary to give effect to such transfer.

 

    	 

    	 

    

  

	5.	SECURITY
                                         INTERESTS

 

	5.1	The
                                         security interests granted pursuant to this Debenture are granted pursuant to the Amended
                                         Security Agreement. Any rights and remedies set forth herein are without prejudice to,
                                         and in addition to, those set forth in the Amended Security Agreement.

 

	6.	GENERAL
                                         COVENANTS

 

	6.1	The
                                         Chargor agrees with Collateral Agent that it will:

 

CONDUCT
OF BUSINESS

 

		6.1.1	immediately
                                         it becomes aware thereof, provide Collateral Agent with details of any litigation, arbitration
                                         or administrative proceedings in progress, pending or, to the knowledge of the Chargor,
                                         threatened against it, which might have a material adverse effect on the Charged Assets
                                         or the Charger’s ability to perform its obligations under this Debenture;

 

		6.1.2	conduct
                                         its business so that its centre of main interest is located at all times in England and
                                         Wales and not move its centre of main interest to another jurisdiction without Collateral
                                         Agent’s prior written consent.

 

		6.1.3	punctually
                                         pay those debts and liabilities which would, on the winding up of the Chargor, have priority
                                         over the Security Interests created by this Debenture;

 

		6.1.4	inform
                                         Collateral Agent if it acquires any Property, a subsidiary or any other material asset;

 

		6.1.5	except
                                         pursuant to any Permitted Security Interest, not permit any person to become entitled
                                         to any proprietary -right or interest which might affect the value of the assets subject
                                         to the fixed charges or floating charges created by this Debenture;

 

INSURANCE

 

		6.1.6	keep
                                         those Charged Assets that are of an insurable nature comprehensively insured against
                                         loss (including loss of rent and profits) or damage by fire and other risks usually insured
                                         against by prudent businesses or that Collateral Agent reasonably requires to their full
                                         replacement: or reinstatement value with insurers approved by Collateral Agent;

 

	 	6.1.7	procure
                                         that Collateral Agent’s interest is noted on such insurance policies and produce
                                         to Collateral Agent the receipts (or other evidence) for each current premium on its
                                         request; failing such production Collateral Agent may assume that such insurance has
                                         lapsed and exercise its rights under clause 5.3;

 

    	 

    	 

    

 

	 	6.1.8	maintain
                                         third party and public liability insurance;

 

REAL
PROPERTY

 

	 	6.1.9	keep
                                         all Property in good and substantial repair;

 

	 	6.1.10	comply
                                         in all material respects with all statutory and regulatory obligations relating to the
                                         Property;

 

	 	6.1.11	punctually
                                         pay all rent, rates, taxes, charges and any other outgoings payable in respect of the
                                         Property and promptly produce the receipts for them to Collateral Agent upon his request;

 

	 	6.1.12	in
                                         relation to any Property, not, without Collateral Agent’s prior written consent
                                         (such consent not to be unreasonably withheld or delayed):

 

	 	6.1.12.1	part
                                         with or share possession or occupation:

 

	 	6.1.12.2	grant
                                         any license or permission to any tenant, licensee or other occupier to assign, underlet,
                                         part with possession or occupation;

 

	 	6.1.12.3	forfeit,
                                         determine, accept or agree to accept the surrender of any lease granted to it;

 

	 	6.1.12.4	surrender
                                         (or agree to surrender), any leasehold interest held by it or allow such interest to
                                         be forfeited;

 

	 	6.1.12.5	create
                                         or permit to arise any interest having overriding effect;

 

	 	6.1.12.6	permit
                                         any person to become entitled to any right, easement. covenant or other matter which
                                         might adversely affect the use, value or marketability of the Property;

 

EQUIPMENT

 

	 	6.1.13	maintain
                                         the Equipment in good and substantial repair and serviceable condition and (where applicable)
                                         ensure that is it properly and regularly serviced in accordance with any relevant warranties
                                         or manuals;

 

	 	6.1.14	obtain
                                         all necessary certificates, licenses, permits and authorisations from time to time required
                                         for the use and/or operation of the Equipment and no! to do or permit to be done any
                                         act or omission whereby the Equipment or its use would contravene legislation or regulations
                                         for the time being in force;

 

	 	6.1.15	notify
                                         Collateral Agent of any material loss, theft, damage or destruction ol the Equipment;

 

	 	6.1.16	inform
                                         Collateral Agent of any change in the location.

 

	6.2	If
                                         the Chargor fails to comply with any of its obligations under this Debenture (including
                                         failing to insure or repair any Property or Equipment) the Chargor irrevocably authorises
                                         the Collateral Agent (and any agent appointed by him) to make good such failure on its
                                         behalf. All costs and expenses incurred by the Collateral Agent pursuant to this authority
                                         shall be reimbursed by the Chargor to the Collateral Agent on his demand

  

    	 

    	 

    

 

	7.	ACCOUNTS

 

	7.1	The
                                         Chargor shall from time to time supply to the Collateral Agent such accounts or other
                                         information concerning the Charged Assets, liabilities and affairs of the Chargor, its
                                         subsidiary or associated companies as the Collateral Agent may reasonably require and
                                         without prejudice to the generality of the foregoing shall on demand by the Collateral
                                         Agent furnish to the Collateral Agent:

 

		7.1.1	a
                                         copy of audited consolidated and unconsolidated profit and loss accounts and balance
                                         sheets of the Chargor and each of its subsidiaries (if any) in respect of each financial
                                         year of the Chargor and of such subsidiaries together with the directors’ and auditors’
                                         reports thereon, forthwith upon the same becoming available and in any event not later
                                         than the expiration of six months from the end of such financial year; and

 

		7.1.2	a
                                         copy of every document issued by or on behalf of the Chargor or by or on behalf of any
                                         of its subsidiaries to its members or debenture holders concurrently with the issue thereof
                                         to such members or debenture holders as the case may be.

 

	8.	FURTHER
                                         ASSURANCE

 

	8.1	The
                                         Chargor will, subject to the requirements of the holder of any prior Permitted Security
                                         Interest, upon the Collateral Agent’s request and at the Chargor’s own expense,
                                         grant itthe Collateral Agent such further Security Interests in the Charged Assets in
                                         such form and on such terms as Collateral Agent may require and do whatever other acts
                                         or things Collateral Agent may require in relation to the Charged Assets in order to
                                         secure the Secured Liabilities, to perfect or protect the Security Interests created
                                         by this Debenture or to facilitate the realisation of the Charged Assets.

 

	9.	POWER
                                         OF ATTORNEY

 

	9.1	The
                                         Chargor hereby by way of security and in order more fully to secure the performance of
                                         its obligations under this Debenture irrevocably appoints the Collateral Agent and every
                                         Receiver or Administrator appointed under this Debenture acting severally to be its attorney
                                         and on its behalf and in its name or otherwise to execute and do all such assurances,
                                         acts and things which the Chargor is required to do under this Debenture and generally
                                         in its name and on its behalf to exercise all or any of the powers, authorities and discretions
                                         conferred by or pursuant to this Debenture or by statute on the Collateral Agent or any
                                         such Receiver or Administrator and to execute any deed, assurance, agreement, instrument
                                         or act which it or he may deem proper in or for the purpose of exercising any of such
                                         powers, authorities and discretions.

 

	9.2	The
                                         Chargor hereby ratifies and confirms and agrees to ratify and confirm whatever any such
                                         attorney as is mentioned above shall do or purport to do in the exercise or purported
                                         exercise of all or any of the powers, authorities and discretions referred to in clause
                                         8.1.

 

	10.	ENFORCEMENT

 

	10.1	At
                                         any time after a Default Collateral Agent may with or without further notice to the Chargor:

 

	 	10.1.1	appoint
                                         an Administrator of the Chargor in accordance with the Insolvency Act 1986; or

 

    	 

    	 

    

 

		10.1.2	appoint
                                         a Receiver to any of the Charged Assets, provided that they comprise less than the whole
                                         or substantially the whole of the Charger’s assets (within the meaning of section
                                         29 Insolvency Act); or

 

		10.1.3	exercise
                                         in respect of all or any of the Charged Assets all or any of the powers and remedies
                                         given to mortgagees by the LP A, including the power to take possession of, receive the
                                         benefit of, or sell any of the Charged Assets.

 

	10.2	At
                                         any time after a Default, the Collateral Agent may declare by written notice to the Chargor,
                                         the Secured Liabilities (or such of them as the Collateral Agent may specify in the relevant
                                         notice) immediately due and payable or (if the Collateral Agent so specifies) payable
                                         forthwith on demand and the security hereby conferred shall become immediately enforceable
                                         and the Collateral Agent’s statutory and other rights shall be immediately exercisable
                                         upon and at any time after the occurrence of any such event.

 

	10.3	After
                                         this security has become enforceable the Collateral Agent may in his absolute discretion
                                         enforce all or any part of this security in such manner as in his absolute discretion
                                         he shall determine.

 

	10.4	The
                                         Chargor hereby covenants that it will immediately notify the Collateral Agent of the
                                         occurrence of every event which would constitute a Default and of the occurrence of every
                                         event which with the lapse of time will or may constitute a Default.

 

	11.	APPOINTMENT
                                         OF A RECEIVER

 

	11.1	Collateral
                                         Agent may either under hand of any manager or by deed appoint any one or more than one
                                         person to act as Receiver of those Charged Assets specified in the appointment.

 

	11.2	Collateral
                                         Agent may from time to time fix the remuneration of any Receiver on such basis as it
                                         shall determine. This may include a fixed fee or an hourly rate or a commission depending
                                         upon the work and responsibilities assumed by the Receiver and the basis of charging
                                         applied by his firm. Section 109 LPA shall be varied accordingly.

 

	11.3	Collateral
                                         Agent may remove or replace any Receiver appointed by him.

 

	11.4	Collateral
                                         Agent may extend a Receiver’s appointment to include Charged Assets previously
                                         excluded from-his appointment.

 

	11.5	A
                                         Receiver will be the agent of the Chargor and the Chargor will be solely responsible
                                         for his acts, omissions, defaults and remuneration.

 

	1.2.	POWERS
                                         ON ENFORCEMENT

 

	12.1	An
                                         Administrator will- have all the powers given to him under the Insolvency Act.

 

	12.2	A
                                         Receiver may exercise in respect of the Charged Assets to which he is appointed:

 

		12.2.1	the
                                         same powers to do, or to omit to do, in the name of and on behalf of the Chargor, anything
                                         which the Chargor itself could have done or omitted to do with such Charged Assets were
                                         they not the subject of this Debenture and the Chargor were not in insolvency proceedings;

 

		12.2.2	all
                                         or any powers given to receivers by the LPA as if such Receiver had been duly appointed
                                         thereunder but without any of the restrictions imposed upon the exercise of those powers
                                         by the LPA; or

 

		12.2.3	notwithstanding
                                         that he is not an administrative receiver, all or any of the powers specified in Schedule
                                         1 to the Insolvency Act.

 

    	 

    	 

    

 

	12.3	If
                                         more than one person is appointed to act as Receiver, each person may act severally,
                                         independent of any other, except to the extent that Collateral Agent states to the contrary
                                         in the appointment. References in this Debenture to the Receiver are to each and all
                                         of them as appropriate.

 

	12.4	Except
                                         to the extent provided by law, none of the powers described in this Clause 12 will be
                                         affected by an insolvency event in relation to the Chargor.

 

	13.	COLLATERAL
                                         AGENT’S POWERS AND PROTECTIONS

 

	13.1	The
                                         powers and remedies conferred on Collateral Agent as a mortgagee by the LP A shall not
                                         be subject to any of the restrictions imposed by the LP A upon the exercise of those
                                         powers and remedies including those imposed by sections 103 and 109 LPA.

 

	13.2	Collateral
                                         Agent may grant or accept surrenders of leases at a premium or otherwise and grant agreements
                                         or options for the same on such terms as it shall consider expedient and without the
                                         need to observe sections 99 and 100 LPA.

 

	1.3.3	The
                                         restrictions on the right of consolidating mortgages contained in section 93 LPA will
                                         not apply to this Debenture.

 

	13.4	Neither
                                         Collateral Agent nor any Receiver nor any Administrator will be liable to account as
                                         mortgagee in possession of the Charged Assets or be liable for any loss upon realisation
                                         or for any neglect or default of any nature whatsoever for which a mortgagee may be liable.

 

	13.5	Neither
                                         Collateral Agent nor any Receiver is obliged to take any particular action to collect
                                         the Chargor’s Book Debts and neither shall be liable to the Chargor for the manner
                                         in which it collects or fails to collect an Book Debts.

 

	14.	APPLICATION
                                         OF MONIES

 

	14.1	All
                                         money received by Collateral Agent or any Receiver under this Debenture will be applied
                                         in the following order:

 

		14.1.1	first,
                                         in or towards payment of liabilities having priority to the Secured Liabilities;

 

		14.1.2	secondly,
                                         in or towards payment of all costs, charges and expenses incurred in or incidental to
                                         the exercise or performance (or attempted exercise or performance) by Collateral Agent
                                         of any of the powers or authorities conferred by or in any other way connected with this
                                         Debenture;

 

		14.1.3	thirdly,
                                         in or towards payment to the Receiver of his remuneration fixed in accordance with this
                                         Debenture;

 

		14.1.4	fourthly,
                                         in or towards payment to Collateral Agent on behalf of himself and the Lenders of the
                                         Secured Liabilities on a pro rata basis;

 

	 	14.1.5	fifthly,
                                         in payment to the Chargor of any surplus.

 

	14.2	Any
                                         surplus shall not carry interest. The Receiver or Collateral Agent shall pay any surplus
                                         into any of the Chargor’s bank accounts. Collateral Agent shall then have no further
                                         liability for such surplus.

 

	14.3	The
                                         application of money pursuant to clause 14.1 shall fully discharge the Chargor’s
                                         liability to the Lenders in respect of the Secured Liabilities to the extent of the money
                                         so applied and the Collateral Agent shall be solely responsible to ensure that all money
                                         that is received by the Collateral Agent or any Receiver that is applied pursuant to
                                         clause 14.1 is duly paid to the Lenders. The Chargor shall have no further responsibility
                                         to the Lenders in the event that such money is not properly applied by the Collateral
                                         Agent or any Receiver.

 

    	 

    	 

    

 

	14.4	Subject
                                         to the rights of the holder of any prior ranking Permitted Security Interest or any landlord,
                                         any money received by the Chargor under any insurance of the Charged Assets will be treated
                                         as part of the Charged Assets, It will be applied at the discretion of Collateral Agent
                                         either in reducing the Secured Liabilities or towards making good the loss or damage
                                         for which the money became payable. Any money received by the Chargor under any insurance
                                         of the Charged Assets shall be held on trust for Collateral Agent pending such application.

 

	15.	PROTECTION
                                         OF THIRD PARTIES

 

	15.1	Any
                                         person dealing with Collateral Agent or a Receiver may assume, unless he has actual knowledge
                                         to the contrary that:

 

	 	15.1.1	Collateral
                                         Agent or such Receiver has the power to do the tilings which they purport to do; and

 

	 	15.1.2	they
                                         are exercising their powers properly.

 

	15.2	AH
                                         the protections to purchasers by sections 104 and 107 LPA shall apply to any person purchasing
                                         from or dealing with any Receiver or Collateral Agent as if the Secured Liabilities had
                                         become due and the statutory power of sale and appointing a receiver in relation to the
                                         Charged Assets had arisen on the date of this Debenture.

 

	16.	CONTINUING
                                         AND ADDITIONAL SECURITY

 

	16.1	This
                                         Debenture is a continuing security. It secures the ultimate balance of the Secured Liabilities
                                         despite any interim settlement of account until a final discharge of this Debenture is
                                         given by Collateral Agent to the Chargor.

 

	16.2	Collateral
                                         Agent’s rights under this Debenture are in addition to any other rights the Lenders
                                         may have against the Chargor (or any other person in respect of the Secured Liabilities)
                                         under any other document, the general law or otherwise. They will not merge with or limit
                                         those other rights or be limited by mem.

 

	16.3	Neither
                                         Collateral Agent nor the Lenders is obliged to make any claim or demand on the Chargor
                                         or any other person or to enforce any guarantee, mortgage or other security now or in
                                         future held by it before enforcing this Debenture and no action taken or omitted in connection
                                         with any such right or instrument shall discharge, reduce or affect the Chargor’s
                                         liability to the Lenders. Neither Collateral Agent nor the Lenders have to account for
                                         any money or other asset received pursuant to any such right or instrument.

 

	17.	EXPENSES
                                         AND INDEMNITIES

 

	17.1	The
                                         Chargor will on demand pay all professionals’ fees (including VAT) and any other
                                         costs, charges or expenses (on a full indemnity basis) incurred by Collateral Agent and
                                         any Administrator or Receiver in connection with the actual or attempted perfection,
                                         preservation, defence or enforcement of this Debenture or the preservation or disposal
                                         of any Charged Assets or the exercise of any power under this Debenture or any amendment,
                                         waiver, consent or release of this Debenture.

 

	17.2	The
                                         Chargor will on demand indemnify any Administrator and any Receiver and any of its and
                                         their officers and employees and any attorney, agent or other person appointed by Collateral
                                         Agent under this Debenture (each an “Indemnified Party”) in respect of all
                                         costs, losses, actions, claims, expenses, demands or liabilities whether in contract,
                                         tort, or otherwise and whether arising at common law, in equity or by statute which may
                                         be incurred by, or made against any of them at any time relating to or arising directly
                                         or indirectly out of:

 

    	 

    	 

    

 

		17.2.1	anything
                                         done or omitted to be done in the exercise or purported exercise of the powers contained
                                         in this Debenture; or

 

		17.2.2	a
                                         claim of any kind (including one relating to the environment) made or asserted against
                                         any Indemnified Party which would not have arisen if this Debenture had not been executed;

 

		17.2.3	any
                                         breach by the Chargor of any of its obligations under this Debenture; unless, in the
                                         case of 17.2.1 and J 7.2.2 it was caused by the gross negligence or wilful misconduct
                                         of the Indemnified Party.

 

	17.3	Neither
                                         Collateral Agent nor any Receiver nor any officer nor employee of either of them shall
                                         in any way be liable or responsible to the Chargor for any loss or liability of any kind
                                         arising from any act or omission by him or it of any kind (whether as mortgagee in possession
                                         or otherwise) in relation to the Charged Assets, except to the extent caused by his or
                                         its own gross negligence or wilful misconduct.

 

	18.	PAYMENTS

 

		18.1	Collateral
                                         Agent or any Receiver may convert any money received, recovered or realised under this
                                         Debenture (including the proceeds of any previous conversion) into such currency as Collateral
                                         Agent or such Receiver may think fit in order to discharge the Secured Liabilities. Any
                                         such conversion shall be effected at the then prevailing spot selling rate of exchange
                                         of Collateral Agent’s bankers for such other currency against the existing currency.

 

		18.22	If
                                         the amount of the currency so converted is less than the amount of the Secured Liability
                                         concerned, the Chargor will indemnify Collateral Agent in respect of that shortfall.

 

		18.3	Any
                                         certificate signed by Collateral Agent as to any amount payable under this Debenture
                                         at the date of such certificate shall, in the absence of manifest error, be conclusive
                                         evidence of such amount and be binding on the Chargor.

 

		184	All
                                         amounts payable by the Chargor under this Debenture will be paid in full without set
                                         off or other deduction.

 

		18.5	Collateral
                                         Agent may at any time witliout notice set off against any Secured Liabilities any amount
                                         owed by it to the Chargor. Collateral Agent may effect such set off by transferring all
                                         or any part of any balance standing to the credit of any of the Ghargor’s accounts
                                         with it to any other account or by combining or consolidating such accounts.

 

	19.	DISCHARGE

 

		19.1	Upon
                                         the Secured Liabilities being irrevocably and unconditionally paid or discharged in full,
                                         Collateral Agent will, at the request of the Chargor, release this Debenture. Collateral
                                         Agent will also transfer to the Chargor any Charged Assets which have been assigned or
                                         transferred to Collateral Agent.

 

		19.2	If
                                         any payment by the Chargor or any other person or any release given by Collateral Agent
                                         is avoided or adjusted pursuant to the Insolvency Act:

 

	 	19.2.1	the
                                         Chargor’s liability for the Secured Liabilities will continue as if the payment,
                                         release, avoidance or adjustment had not occurred; and

 

	 	19.2.2	Collateral
                                         Agent will be entitled to recover the value or amount of that payment or security from
                                         the Chargor as if the payment, release, avoidance or adjustment had not occurred.

 

    	 

    	 

    

  

	20.	TRANSFERS
                                         AND DISCLOSURES

 

		20.1	Collateral
                                         Agent may not novate or assign this Debenture or sub-contract or delegate his obligations
                                         or duties under it save as expressly provided in this Debenture.

 

		20.2	The
                                         Chargor may not assign, transfer, delegate or make any declaration of trust of any of
                                         its rights or obligations under this Debenture.

 

	21.	MISCELLANEOUS

 

		21.1	No
                                         delay or failure by Collateral Agent to exercise any right or remedy under this Debenture
                                         shall impair or operate as a waiver of that right or remedy. Any single, partial or defective
                                         exercise of any such power, right or remedy shall not prevent the further exercise of
                                         that or any other right or remedy.

 

		21.2	Any
                                         waiver, consent or approval given by Collateral Agent of or under this Debenture will
                                         only be effective if given in writing. Such waiver, consent or approval shall then only
                                         apply for the purpose stated and be subject to any written terms and conditions imposed
                                         by Collateral Agent.

 

		21.3	If
                                         at any time any one or more of the provisions of this Debenture is or becomes illegal,
                                         invalid or unenforceable in any respect under the law of any jurisdiction then neither
                                         the legality, validity or enforceability of the remaining provisions of this Debenture
                                         nor the legality, validity or enforceability of such provision under the law of any other
                                         jurisdiction shall be in any way affected or impaired as a result.

 

		21.4	Each
                                         Indemnified Party may enforce the terms of this Debenture in accordance with the Contracts
                                         (Rights of Third Parties) Act 1999. Apart from the Indemnified Parties and the parties
                                         to this Debenture, no other person may enforce its terms.

 

		21.5	Coilateral
                                         Agent may grant releases of or waivers under this Debenture and he and the Chargor may
                                         agree variations to its terms without either notifying the Indemnified Parties or obtaining
                                         their consent.

 

	22.	SERVICE
                                         OF NOTICES AND PROCESS

 

		22.1	Any
                                         notice, request, demand, consent, approval, notification, instruction, proceedings or
                                         other communication from Collateral Agent to the Chargor under this Debenture shall be
                                         in writing and may be sent by post or courier. Any such communication shall be addressed
                                         to the Chargor at its address given in this Debenture, its registered office or the address
                                         last known to Collateral Agent at which it carried on business and shall be treated as
                                         served:

 

	 	22.1.1	if
                                         delivered by courier or personally: at the time of delivery;

 

	 	22.1.2	if
                                         posted: 48 hours after posting or upon receipt (whichever is earlier).

 

		22.2	Any
                                         notice, request or other communication under this Debenture from the Chargor to Collateral
                                         Agent must be in writing and sent by first class post to Collateral Agent’s registered
                                         office or such other address as Collateral Agent advises the Chargor in writing for this
                                         purpose and will be treated as served.

 

	 	22.2.1	if
                                         it is received during business hours on a Working Day; on receipt; or

 

	 	22.2.2	if
                                         it is received outside business hours or on a day which is not a Working Day: on the
                                         first Working Day after receipt.

 

    	 

    	 

    

 

	23.	JURISDICTION

 

	23.1	This
                                         Debenture shall be governed by and construed in accordance with the iaws of England.
                                         The Chargor accepts the non-exclusive jurisdiction of the English Courts in connection
                                         with any matter arising under this Debenture.

 

	24.	DEFINITIONS
                                         AND INTERPRETATION

 

	24.1	Any
                                         word whose meaning is defined in the Receivables Finance Agreement has the same meaning
                                         in this Debenture.

 

	24.2	In
                                         this Debenture the following words have the meanings set out opposite them:

 

	“Administrator”	any
    person appointed under the Insolvency Act 1986 to manage the Charger’s business and assets.
	 	 
	“Book
    Debts”	all
    present and future book and other debts and monetary claims due or owing to the Chargor, and the benefit of all security,
    guarantees and other rights of any nature enjoyed or held by the Chargor in relation to any of them;
	 	 
	“Charged
    Assets”	the
    subject matter of the mortgages and charges created by this Debenture and set out at clause 2.
	 	 
	“Default”	Any
    of the following:
	 	 
	 	(i)
    any event or circumstance which would constitute an “Event of Default” (as defined in any of the Subordinated
    Contingent Notes.) under any such Subordinated Contingent Note;
	 	 
	 	(ii)
    the Chargor requesting the Collateral Agent to appoint an Administrator or Receiver or to take possession;
	 	
	 	(iii)
    the Chargor breaching (or being found to have breached) any of the covenants or warranties given by it to the Collateral Agent
    in this Debenture.
	 	 
	“Dispose”
    or “Disposal”	includes
    sale, transfer, lease, licence, or parting with possession or granting any interest in.
	 	 
	“Equipment”	any
    plant, machinery and/or other equipment charged to Collateral Agent by this Debenture.
	 	 
	“Expenses”	those
    fees, cost, charges and expenses covenanted to be paid by the Chargor in clause 17.1.
	 	 
	“Indemnified
    Events”	those
    matters and events in respect of which the Chargor is liable to indemnify or reimburse Collateral Agent, including those referred
    to in clauses 5.2 and 16.
	 	 
	“Insolvency
    Act”	Insolvency
    Act 1986 and any secondary legislation made under it.

 

    	 

    	 

    

 

	“Intellectual
    Property”	all
    patents (including applications, improvements, prolongations, extensions and right to apply therefor), design rights., trade
    marks and service marks (whether registered or unregistered) and applications for the same, copyright, trade, brand, domain
    and business names, know-how, confidential information, trade secrets, databases and computer software programs and systems
    and all other intellectual or intangible property (including the benefit of any licences or consents relating to any of the
    above) and all fees, royalties or other rights derived therefrom or incidental thereto in any part of the world.
	 	 
	“Lenders”	means
    the persons listed in Schedule 5 (each, a “Lender”)
	 	 
	“LPA”	Law
    of Property Act 1925.
	 	 
	“Permitted
    Security Interest”	any
    Security Interest specified in Schedule 4 and any lien arising by operation of law in the ordinary course of trading over
    property other than land.
	 	 
	“Property”	any
    freehold or leasehold property owned or occupied by the Chargor.
	 	 
	“Receiver”	any
    receiver or receiver and manager who is not an administrative receiver (within the meaning of section 29(2) Insolvency Act)
    appointed under this Debenture.
	 	 
	“Remittances”	cash,
    cheques, bills of exchange, negotiable and non-negotiable instruments, letters of credit, orders, drafts, promissory notes,
    electronic payments and any other instruments, methods or forms of payment or engagement.
	 	 
	“Security
    Interest”	any
    mortgage, charge, pledge, trust, preferential right, assignment by way of security, hypothecation, lien, or any other arrangement
    for the purpose of or having a similar effect to creating security or any title retention rights or any set off rights created
    by agreement.
	 	 
	“Securities”.	all
    stocks, shares, bonds and securities of any kind whatsoever (including warrants and options to acquire or subscribe for any
    of the same) and whether marketable or not, held by the Chargor now or at any time in the future including all allotments,
    rights and benefits at any time accruing, offered or arising in respect of or incidental to the same and all money or property
    accruing or offered at any time by way of dividend, distribution, conversion, redemption, bonus, preference, option, interest
    or otherwise in respect thereof.

 

    	 

    	 

    

  

	21.3	in
                                         this Debenture:

 

		21.3.1	unless
                                         the context requires otherwise, the singular includes the plural and vice versa and any
                                         reference to a gender includes any other gender;

 

		21.3.2	headings
                                         to clauses are for reference only and shall not affect the interpretation of this Debenture;

 

		21.3.3	references
                                         to clauses and to Schedules are to the clauses of and schedules to this Debenture;

 

		21.3.4	references
                                         to a “person”, include individuals, firms, partnerships, corporations, unincorporated
                                         bodies and government entities;

 

		21.3.5	references
                                         to any Act of Parliament include that Act as amended, modified or re-enacted from time
                                         to time and all rules, regulations, orders and subordinate legislation made pursuant
                                         to it; any provision of this Debenture which refers to an Act which is amended, may itself
                                         be amended in such manner as Collateral Agent may determine to preserve the intended
                                         effect of this Debenture;

 

		21.3.6	references
                                         to this “Debenture” or any other document are to this Debenture or that document
                                         as from time to time amended, supplemented, restated, novated or replaced, however fundamentally;

 

		21.3.7	references
                                         to the “Charged Assets” are to the whole or any part of such property or
                                         assets, as the context requires;

 

		21.3.8	whenever
                                         the Chargor is obliged to do something if required or requested by Collateral Agent,
                                         it shall do that thing promptly;

 

		21.3.9	the
                                         meaning of general words introduced by the word “other” or (followed by the
                                         word “including”) shall not be limited by reference to any preceding (or
                                         following) word or enumeration indicating a particular class of acts, matters or things.

 

	21.4	It
                                         is intended that this Debenture takes effect as a deed even though Collateral Agent may
                                         only execute it under hand.

 

	21.5	This
                                         Debenture may be executed in counterparts.

 

	21.6	Any
                                         term or phrase defined in the Companies Act 1985 and 2006 (whether capitalised or not)
                                         bears the same meaning in this Debenture.

 

    	 

    	 

    

  

SCHEDULE
1

Amended
and Restated Security Agreement

 

    	 

    	 

    

 

THIS
SECURITY AGREEMENT IS OR WILL BE SUBJECT TO SUBORDINATION 

AGREEMENTS BETWEEN COLLATERAL AGENT AND THE HOLDERS OF THE

SENIOR
INDEBTEDNESS

 

AMENDED
AND RESTATED SECURITY AGREEMENT

 

THIS
AMENDED AND RESTATED SECURITY AGREEMENT (the “Security Agreement”), is made as of August 31, 2010, by and among
EMRISE Electronics Corporation, a New Jersey corporation (“Borrower”), EMRISE Corporation, a Delaware corporation
(“Parent”), the Subsidiaries (as listed on Exhibit A), Charles S. Brand, an individual
(“Collateral Agent”), and the persons and entities listed on the Schedule of Lenders attached hereto as Exhibit
A (each, a “Lender” and collectively, the “Lenders”).

 

RECITALS

 

A.Borrower
and the Lenders are parties to that certain Stock Purchase Agreement dated as of May 23, 2008 (the “Stock Purchase Agreement”)
relating to the purchase by Borrower of all of the issued and outstanding shares of capital stock (collectively, the “Shares”)
of (i) Advanced Control Components, Inc., a New Jersey corporation (“ACC”) owned by Thomas P. M. Couse,
Joanne Couse and Michael Gaffney and (ii) Custom Components, Inc. owned by Charles S, Brand. As a result of the consummation of
the Stock Purchase Agreement, Borrower beneficially owned all of the capital stock of ACC.

 

B.Pursuant
to the terms of the Stock Purchase Agreement, Borrower issued certain subordinated secured contingent promissory notes (as amended,
are referred to herein as the “Subordinated Contingent Notes”) to the Lenders to satisfy a portion of the aggregate
consideration to be paid by Borrower for the purchase of the Shares. The Subordinated Contingent Notes were amended in November
2009 to add additional payment amounts, and to modify the payment date and terms. The Subordinated Contingent Notes have been
amended by Amendment No. 2 of even date herewith.

 

C.Parent,
the ultimate parent of Borrower, delivered a Continuing Guaranty dated August 20, 2008 (the “Guaranty”) in
favor of the Lenders pursuant to which the obligations of Borrower to the Lenders under the Subordinated Contingent Notes were
guaranteed by Parent.

 

D.The
Lenders subordinated the indebtedness owed to them under the Subordinated Contingent Notes to the holder of the Senior Indebtedness
pursuant to that certain Subordination Agreement between the Collateral Agent and GVEC Resource IV Inc. dated as of August 20,
2008 (the “GVEC Subordination Agreement”).

 

E.On
June 7, 2010, Borrower entered into an agreement to sell its direct and indirect interests in the Shares (the “Sale Transaction”).
In connection with the Sale Transaction, the Borrower, Parent and the Lenders entered into a Master Agreement, pursuant to
which the Lenders agreed to release their lien on all of the assets or property of ACC (the “Original Collateral”).

 

    	 

    	 

    

 

F.The
parties desire to enter into this Amended and Restated Security Agreement to grant the Collateral Agent, for the benefit of himself
and the Lenders, a security interest in the collateral described below as substitute collateral for the Original Collateral.

 

G.To
perfect their grant of a security interest hereunder, each of XCEL Power Systems, Ltd. and Pascall Electronies Limited will enter
into an AH Assets Debenture dated as of the date hereof in favor of the Collateral Agent (each, a “UK Debenture”).

 

H.The
Collateral Agent will enter into that certain Deed of Priorities dated as of the date hereof between Lloyds TSB Commercial Finance
Limited, GVEC Resource IV, Inc., Collateral Agent and XCEL Power Systems, Ltd. (the “XCEL Deed”) and that certain
Deed of Priorities dated as of the date hereof between Lloyds TSB Commercial Finance Limited, GVEC Resource IV, Inc., Collateral
Agent and Pascall Electronics Limited (the “Pascall Deed” and collectively with the GVEC Subordination Agreement
and the XCEL Deed, the “Subordination Agreements”).

 

I.
The Subordinated Contingent Note held by Michael Gaffney has been paid in full and he is no longer a “Lender” hereunder.

 

NOW,
THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:

 

1.Definitions
and Interpretation. Unless otherwise defined herein, all other capitalized terms used herein and defined in the Subordinated
Contingent Notes shall have the respective meanings given to those terms in the Subordinated Contingent Notes, and all terms defined
in the New Jersey Uniform Commercial Code (the “UCC”) shall have the respective meanings given to those terms in the
UCC.

 

2.Grant
of Security Interest.

 

2.1To
secure the Obligations as defined in Section 3 hereof, each of the Subsidiaries hereby grants to Collateral Agent a continuing
security interest and lien in and to all of the assets and properties of the Subsidiaries, whether now owned or existing or hereafter
acquired or arising and regardless of where located and all additions and accessions thereto, substitutions and replacements therefor,
and all proceeds thereof (the “Collateral”), including, without limitation, the following property: all tangible
and intangible assets of the Subsidiaries, including, but not limited to, all existing and future inventory, accounts, deposit
accounts, accounts receivable, furniture, fixtures, equipment, general intangibles, books and records, patents, patent applications,
trademarks, copyrights, trade secrets, and any other property interest or proprietary right, as well as any document, instrument
or drawings embodying the same.

 

2.2Borrower,
Parent and each of the Subsidiaries hereby jointly and severally warrant and represent to and covenant and agree with the Collateral
Agent and the Lenders that the continuing security interest and lien granted pursuant to this Security Agreement is and shall
at ail times be a priority security interest in the assets of each Subsidiary, subordinate only to Senior Indebtedness.

 

    	 

    	 

    

 

3.Security
for Obligations. The obligations secured by this Security Agreement (the “Obligations”) shall mean
and include all obligations of Borrower as provided in (i) the Subordinated Contingent Notes, (ii) the Stock Purchase Agreement,
and (iii) all of the other Related Agreements (as such term is defined in the Stock Purchase Agreement).

 

4.Possession
and Location of Collateral. Unless and until any default occurs hereunder as set forth in Section 11 hereof, each
of the Subsidiaries shall have possession of its Collateral for its use and enjoyment in any lawful manner not inconsistent with
this Security Agreement or the Subordinated Contingent Notes, The Collateral will be kept at any of Parent’s place of business
or the place of business of any of the Subsidiaries (or such other places as any of Parent or the Subsidiaries customarily keeps
the Collateral) with respect to such Collateral and will not be moved therefrom without the prior written consent of Collateral
Agent, except that Parent and the Subsidiaries may make sales of inventory items in the ordinary course of business. No Subsidiary
shall replace or make material alterations in the Collateral without the prior written consent of Collateral Agent. The consent
of Collateral Agent required hereby shall not be unreasonably withheld.

 

5.Financing
Statements. Concurrently with the execution of this Security Agreement, each of the Subsidiaries shall execute and deliver
to Collateral Agent (a) the UCC-1 financing statement, or its foreign equivalent, provided by Collateral Agent evidencing the
Collateral Agent’s interest in the Collateral and (b) a UCC-3 financing statement provided by Collateral Agent evidencing
Collateral Agent’s release of its lien on the Original Collateral. Collateral Agent hereby authorizes and directs each of
Borrower and Parent to file or cause to be filed the UCC-3 financing statement.

 

6.Transfer,
Taxes, Liens and Encumbrances. Each of the Subsidiaries represents and warrants that it has title to its respective Collateral
free and clear of any lien, security interest or encumbrance, except for the security interests of the holders of the Senior Indebtedness
and the security interest created by this Security Agreement, and if such Subsidiary is party to a UK Debenture, the applicable
UK Debenture. Title to the Collateral will remain in and continue to be vested in each respective Subsidiary. Each of the Subsidiaries
will defend its Collateral and will not sell, offer to sell or otherwise transfer the Collateral, any portion thereof, or any
interest therein, without the prior written consent of Collateral Agent, except that Parent and Subsidiaries may make sales of
inventory items in the ordinary course of business. The consent of Collateral Agent required hereby shall not be unreasonably
withheld. As applicable, Parent, Borrower or the Subsidiaries shall pay ail taxes, assessments and other charges made against
the Collateral.

 

7.Risk
of Loss and Inspection of Collateral. As applicable, Parent or the Subsidiaries shall have all risk of loss of the Collateral,
and each Subsidiary will keep its Collateral in good order and repair. Collateral Agent shall have the right, at any reasonable
time, to enter upon the premises where the Collateral is located to examine and inspect the Collateral in person or by agent.
Any refusal to permit such entry shall be a breach of this Security Agreement.

 

8.Insurance.
As applicable, Parent or the Subsidiaries shall keep the Collateral insured, at its own expense, in an amount not less than
its full insurable value, against loss by fire, theft, vandalism and malicious mischief, storm, earthquake and extended coverage,
and shall cause the Lenders to be named as additional insured parties and loss payees in such insurance, and furnish to Collateral
Agent written evidence thereof.

 

    	 

    	 

    

  

9.Representations
and Warranties. Borrower, Parent and each of the Subsidiaries hereby jointly and severally represent and warrant
to Collateral Agent and the Lenders that: (i) each of Borrower, Parent and the Subsidiaries has full power and authority to enter
into this Security Agreement (and, if party to a UK Debenture, such UK Debenture) and to grant the security interest and lien
in and to the Collateral and has taken all proper and necessary actions to authorize the execution, delivery and performance of
this Security Agreement (and, if party to a UK Debenture, such UK Debenture); (ii) that the Parent owns one hundred percent (100%)
of the issued and outstanding capital stock, directly or indirectly, of the Borrower and each of the Subsidiaries; (Hi) this Agreement
is valid and binding upon and enforceable against Borrower, Parent and Subsidiaries, except as such enforceability may be limited
by applicable insolvency, bankruptcy, reorganization, moratorium or other similar laws affecting creditors’ rights generally
and genera! principles of equity; and (iv) the making and performance of this Security Agreement (and if a party to a UK Debenture,
such UK Debenture) by Borrower, Parent and the Subsidiaries will not conflict with their respective certificates of incorporation,
bylaws, or other organizational documents, breach or violate any law, statute, rule or regulation of, or any judgment, order,
decree, writ, injunction or award issued by any governmental authority or violate or result in a default (immediately or with
the passage of time or notice or both) under any contract, indenture, agreement or instrument to which Borrower, Parent or the
Subsidiaries, as applicable, is a party, or by which any of Borrower, Parent or the Subsidiaries is bound.

 

10.Covenants.
Borrower, Parent and each of the Subsidiaries hereby agree as follows:

 

 

10.1(Liens
on Collateral) not to create, incur, assume or suffer to exist any lien or security interest of any kind upon the Collateral
other than in favor of the holders of any Senior Indebtedness; provided that no additional liens or security interest will be
granted in favor of MeDermott and Yost as defined in the Note;

 

10.2(Further
Assurances) that at any time and from time to time, at Parent’s expense, Parent, Borrower and the Subsidiaries
will promptly execute and deliver all further instruments and documents and take all further action, that may be necessary or
desirable, or that Collateral Agent may reasonably request, in order to perfect and protect any security interest granted or purported
to be granted hereby or to enable Collateral Agent to exercise and enforce Collateral Agent’s rights and remedies hereunder
with respect to any Collateral;

 

10.3(Parent
Financial Statements) from and after the date hereof until the Notes are paid in full, on a quarterly basis within five
(5) business days after the scheduled filing date (including any extensions pursuant to Rule 12b-25 of the Securities Exchange
Act of 1934) for Parent’s Form 10-Q or Form 10-K, as applicable, with the Securities and Exchange Commission, Parent will
provide Collateral Agent with copies of Parent’s quarterly and annual financial statements and any related notes;

 

10.4(Parent,
Borrower and Subsidiary Financial Statements) from and after the date hereof until the Notes are paid in full,
on a quarterly basis within forty-five (45) days after the end of each fiscal quarter, and within sixty (60) days after the end
of each fiscal year, Parent Borrower and each Subsidiary will provide Collateral Agent with copies of separate company quarterly
and annual financial statements and any related notes for each of Parent (only to the extent such separate company financial statements
may no be longer required to be filed with the Securities and Exchange Commission), Borrower and each Subsidiary;

 

    	 

    	 

    

 

10.5(Sale
of Parent, Borrower or Subsidiaries), in the event that Parent, Borrower or any of the Subsidiaries or any assets of the
Subsidiaries (other than assets of the Subsidiaries sold in the ordinary course of business) is proposed to be sold, including
by way of stock sale, merger or otherwise, the Parent shall provide notice to the Collateral Agent of such proposed sale promptly
and to the extent possible at least thirty (30) days prior to the consummation thereof and in no event less than fourteen (14)
days prior to the consummation thereof; and

 

10.6(Senior
Indebtedness), on an aggregate basis, not to incur Senior Indebtedness in an amount outstanding exceeding Fifteen Million
Dollars ($15,000,000) without the prior written approval of the Lenders (which shall not be unreasonably withheld) and, in no
event, in an amount outstanding exceeding Twenty Million Dollars ($20,000,000).

 

11.
Events of Default; Remedies.

 

11.1
Event of Default. An Event of Default shall be deemed to have occurred under this Security Agreement upon the occurrence
and during the continuance of an Event of Default (as defined in the Subordinated Contingent Notes).

 

11.2Rights
Under the UCC. In addition to all other rights granted hereby and by the UK Debentures, and otherwise by law, subject
to the Subordination Agreements, Collateral Agent shall have, with respect to the Collateral, the rights and obligations of a
secured party under the UCC.

 

11.3Notice,
Etc. In any case where notice of sale is required, ten (10) days notice shall be deemed reasonable notice. Subject to
the Subordination Agreements, Collateral Agent may have resort to the Collateral or any portion thereof with no requirement
on the part of Collateral Agent to proceed first against any other Person (as defined in the Subordinated Contingent Notes) or
property.

 

11.4Other
Remedies. Upon the occurrence and during the continuance of an Event of Default, subject to the Subordination Agreements,
at the request of Collateral Agent, Parent, Borrower and each Subsidiary, as applicable, shall assemble and make available
to Collateral Agent all of the Collateral at a place or places reasonably convenient to each of Borrower, Parent and the Subsididaries,
as applicable, and Collateral Agent; provided, however, that none of Parent, Borrower or any Subsidiary shall be obligated under
this Agreement to ship any Collateral internationally.

 

11.5Application
of Collateral Proceeds. Subject to the Subordination Agreements, the proceeds and/or avails of the Collateral, or any
part thereof, and the proceeds and the avails of any remedy hereunder (as well as any other amounts of any kind held by Collateral
Agent at the time of, or received by Collateral Agent after, the occurrence of an Event of Default) shall be paid to and applied
as follows:

 

    	 

    	 

    

  

(a)first,
to the payment of reasonable costs and expenses, including all amounts expended to preserve the value of the Collateral, of foreclosure
or suit, if any, and of such sale and the exercise of any other rights or remedies, and of all proper fees, expenses, liability
and advances, including reasonable legal expenses and attorneys’ fees, incurred or made hereunder by Collateral Agent;

 

(b)second,
to the payment to each Lender of the amount then owing or unpaid on such Lender’s Subordinated Contingent Note, and in case
such proceeds shall be insufficient to pay in full the whole amount so due, owing or unpaid upon such Subordinated Contingent
Note, then its Pro Rata Share of the amount remaining to be distributed (to be applied first to accrued interest and second to
outstanding principal); and

 

(c)third,
to the payment of the surplus, if any, to Borrower, its successors and assigns, or to whomsoever may be lawfully entitled to receive
the same.

 

For
purposes of this Security Agreement the term “Pro Rata Share” shall mean, when calculating a Lender’s portion
of any distribution or amount, that distribution or amount (expressed as a percentage) equal to a fraction (i) the numerator of
which is the outstanding principal amount of such Lender’s Subordinated Contingent Note as set forth on Exhibit A hereto,
and (ii) the denominator of which is the aggregate outstanding principal amount of all Subordinated Contingent Notes issued under
the Stock Purchase Agreement as set forth on Exhibit A hereto. In the event that a Lender receives payments or distributions
in excess of its Pro Rata Share, then such Lender shall hold in trust all such excess payments or distributions for the benefit
of the other Lenders and shall pay such amounts held in trust to such other Lenders upon demand by such Lenders.

 

12.
Authorized Action by Collateral Agent.

 

(a)Borrower,
Parent and each of the Subsidiaries each hereby appoint Collateral Agent as attorney-in-fact for each of Borrower, Parent and
each Subsidiary, respectively, with full authority in the place and stead of Borrower, Parent and each Subsidiary, respectively,
and in the name of Borrower, Parent and each Subsidiary, as applicable, or otherwise, from time to time in Collateral Agent’s
discretion and to the full extent permitted by law to take any action and to execute any instrument which Collateral Agent may
deem reasonably necessary or advisable to accomplish the purposes of this Security Agreement in accordance with the terms and
provisions hereof, including without limitation, to receive, endorse and collect all instruments made payable to Borrower, Parent
or any Subsidiary representing any dividend, interest payment or other distribution in respect of the Collateral or any part thereof
and to give full discharge for the same.

 

(b)This
power of attorney is a power coupled with an interest and shall be irrevocable. The powers conferred on Collateral Agent hereunder
are solely to protect the Collateral Agent and Lenders’ interests in the Collateral and shall not impose any duty upon Collateral
Agent to exercise any such powers. Collateral Agent shall be accountable only for amounts that he actually receives as a result
of the exercise of such powers and in no event shall Collateral Agent or any of his employees or agents be responsible to Borrower,
Parent or any Subsidiary for any act or failure to act, except for gross negligence or willful misconduct.

 

    	 

    	 

    

  

13.
Collateral Agent.

 

13.1Appointment.
The Lenders hereby appoint Charles S. Brand as Collateral Agent for the Lenders under this Security Agreement (in such capacity,
the “Collateral Agent”) to serve from the date hereof until the termination of this Security Agreement.

 

13.2Powers
and Duties of Collateral Agent Indemnity by Lenders.

 

 

(a)Each
Lender hereby irrevocably authorizes the Collateral Agent to take such action and to exercise such powers hereunder as provided
herein, together with such powers as are reasonably incidental thereto. Collateral Agent may execute any of his duties hereunder
by or through agents or employees at his discretion.

 

(b)Upon
the death or resignation of the Collateral Agent, the Lenders shall appoint a successor collateral agent to act under the Subordinated
Contingent Notes and this Security Agreement. If no such successor collateral agent shall have been so appointed by the Lenders
and shall have accepted such appointment within thirty (30) days after Collateral Agent’s death or giving of notice of resignation
as Collateral Agent, then Collateral Agent shall be deemed to be Thomas P. M. Couse or his successor-in-interest to his Subordinated
Contingent Note. Upon the acceptance of any appointment as successor collateral agent hereunder by a successor collateral agent,
such successor collateral agent shall thereupon succeed to and become vested with all rights, powers, privileges, duties and obligations
of Collateral Agent hereunder, and the Collateral Agent shall be discharged from his duties and obligations. After Collateral
Agent’s death or resignation hereunder as the Collateral Agent, the provisions of this Section 13 shall continue
in effect for his benefit in respect of any actions taken or omitted to be taken by him while he was acting as such Collateral
Agent.

 

14.
Miscellaneous.

 

14.1Notices.
Any notice, request or other communication required or permitted hereunder shall be in writing and shall be deemed to have
been duly given if personally delivered or mailed by registered or certified mail, postage prepaid, or by recognized overnight
courier or persona! delivery at the respective addresses of the parties as set forth on Exhibit A hereto or on the register
maintained by the Parent. Any party hereto may by notice so given change its address for future notice hereunder. Notice shall
conclusively be deemed to have been given when received.

 

14.2Nonwaiver.
No failure or delay on Borrower, Parent, a Subsidiary, Collateral Agent or Lenders’ part in exercising any right hereunder
shall operate as a waiver thereof or of any other right nor shall any single or partial exercise of any such right preclude any
other further exercise thereof or of any other right.

 

 

    	 

    	 

    

 

1.4.3
Amendments and Waivers. This Security Agreement may not be amended or modified, nor may any of its terms be waived, except
by written instruments signed by Borrower, Parent, each Subsidiary and Collateral Agent. Each waiver or consent under any provision
hereof shall be effective only in the specific instances for the purpose for which given.

 

14.4Assignments.
This Security Agreement shall be binding upon and inure to the benefit of Lenders, Collateral Agent, Parent, Borrower and each
Subsidiary and their respective successors, assigns, heirs, beneficiaries and legal representatives; provided, however,
that none of Borrower, Parent and any Subsidiary may assign their respective rights and duties hereunder without the prior written
consent of Collateral Agent.

 

14.5Cumulative
Rights, etc. The rights, powers and remedies of Lenders and Collateral Agent under this Security Agreement shall be in addition
to all rights, powers and remedies given to Lenders and Collateral Agent by virtue of any applicable law, rule or regulation of
any governmental authority, the Stock Purchase Agreement, the Subordinated Contingent Notes, the Guaranty, the UK Debentures,
the XCEL Deeed, the Pascal! Deed or any other agreement, all of which rights, powers, and remedies shall be cumulative and may
be exercised successively or concurrently without impairing Collateral Agent’s rights hereunder. Each of Borrower, Parent
and each Subsidiary waive any right to require Collateral Agent or Lenders to proceed against any Person or to exhaust any collateral
or to pursue any remedy in Collateral Agent or Lenders’ power.

 

14.6Partial
Invalidity. If at any time any provision of this Security Agreement is or becomes illegal, invalid or unenforceable in any
respect under the law or any jurisdiction, neither the legality, validity or enforceability of the remaining provisions of this
Security Agreement nor the legality, validity or enforceability of such provision under the law of any other jurisdiction shall
in any way be affected or impaired thereby.

 

14.7Expenses.
Parent, Borrower and each Subsidiary, jointly and severally. agree to pay on demand all reasonable fees and expenses, including
reasonable attorneys’ fees and expenses, incurred by Collateral Agent with respect to any amendments or waivers hereof requested
by Parent, Borrower or a Subsidiary or in the enforcement or attempted enforcement of any of the Obligations or in preserving
any of Collateral Agent’s or Lenders’ rights and remedies (including, without limitation, all such fees and expenses
incurred in connection with any “workout” or restructuring affecting this Security Agreement, the Subordinated Contingent
Notes, the Guaranty, the UK Debentures, the XCEL Deeed, the Paseall Deed or the Obligations or any bankruptcy or similar proceeding
involving Parent, Borrower or any Subsidiary).

 

14.8Governing
Law; Jurisdiction. This Security Agreement shall be governed by and construed in accordance with the laws of the State of
New Jersey without reference to conflicts of law rules (except to the extent governed by the UCC). Any action or proceeding seeking
to enforce any provision of, or based on any right arising out of, this Security Agreement, may be brought against any party to
this Security Agreement in the courts of the State of New Jersey, Monmouth County, or, if it has or can acquire jurisdiction,
the United States

 

    	 

    	 

    

  

District
Court for the District of New Jersey, and each of the parties hereto consents to the jurisdiction of such courts (and of the appropriate
appellate courts) in any such action or proceeding and waives any objection to venue laid therein. Process in any action or proceeding
referred to in the preceding sentence may be served on any party anywhere in the world.

 

14.9
Jury Trial. BORROWER, PARENT, EACH SUBSIDIARY, LENDERS AND COLLATERAL AGENT, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, HEREBY IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY AS TO ANY ISSUE RELATING HERETO IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT.

 

[Signature
page follows.]

 

    	 

    	 

    

  

IN
WITNESS WHEREOF, the parties have caused this Security Agreement to be executed as of the day and year first above written.

 

	 	EMRISE
    ELECTRONICS CORPORATION,
	 	a
    New Jersey corporation
	 	 	 
	 	By:	
	 	Name:
    	 
	 	Its:	 
	 	 	 
	 	EMRISE
    CORPORATION,
	 	a
    Delaware corporation
	 	 	 
	 	By:	 
	 	Name:	 
	 	Its:	 
	 	 	 
	 	CXR
    LARUS CORPORATION,
	 	a
    Delaware corporation
	 	 	 
	 	By:	 
	 	Name:	 
	 	Its:	 
	 	 	 
	 	PASCALL
    ELECTRONICS LIMITED,
	 	a
    United Kingdom corporation
	 	 	 
	 	By:	 
	 	Name:
    	 
	 	Its:	 
	 	 	 
	 	XCEL
    POWER SYSTEMS, LTD.,
	 	a
    United Kingdom corporation
	 	 	 
	 	By:	
	 	Name:	 
	 	Its:	 
	 	 	 
	 	Charles
    S. Brand, as Collateral Agent
	 	 	 
	 	See
    Schedule of Lenders on Exhibit A for signatures of Lenders.

 

Amended
and Restated Security Agreement

 

    	 

    	 

    

 

EXHIBIT
A

 

Schedule
of Subsidiaries

 

	 	●	CXR
    Larus Corporation, a Delaware corporation
	 	 	 
	 	●	Pascall
    Electronics Limited, a United Kingdom company
	 	 	 
	 	●	XCEL
    Power Systems, Ltd., a United Kingdom company

 

Schedule
of Lenders

 

	Lender’s
    Name and Address 	 	Principal
    Amount of 
 Note outstanding on 
 August 31, 2010	 	 	Lender’s
    Signature
	 	 	 	 	 	 
	Charles
    S. Brand 
175 Boundary Road	 	 	 	 	 
	Colts
    Neck, NJ 07722 
	 	$	2,211,766.43	 	 	Charles
    S. Brand
	 	 	 	 	 	 	 
	Thomas
    P. M. Couse 	 	 	 	 	 	
	1
    Waltham Way

    Jackson, NJ 08527 
	 	$	332,720.81	 	 	Charles
    S. Brand, as attorney in feet for Thomas P.M. Couse
	 	 	 	 	 	 	 
	Joanne
    Couse 1	 	 	 	 	 	 
	Waltham
    Way 

    Jackson, NJ 08527	 	$	332,720.81	 	 	Charles
    S. Brand, as attorney in fact for Joanne Couse
	 	 	 	 	 	 	 
	Aggregate
    Principal Amount:	 	$	2,877,208.05	 	 	 

 

Amended
and Restated Security Agreement

 

    	 

    	 

    

 

SCHEDULE
2

 

Registered
Land

 

Description

 

All
freehold property known as Cothey Way, Ryde, Isle of Wight, P033 1QTExhibit 10.86

 

 

 

We
LLOYDS TSB BANK PLC (the “Bank”) of” 2nd Floor, 25 Gresham
Street, London EC2V 7HN offer you EMRISE ELECTRONICS LIMITED (company registered number 01969006) of Cobbswood Industrial
Estate, Brunswick Road, Ashford, Kent TN23 I EH a loan on the following terms and conditions.

 

SPECIFIC
TERMS AND CONDITIONS

 

THE LOAN

 

The
maximum amount of the loan shall be £750.000. This amount is to be used for the refinancing of your existing indebtedness
with the Bank. The loan shall be borrowed in one amount on or before 31st August 2011 or such later date as the Bank may agree.
You will not be entitled to borrow any amount that has not been borrowed by the agreed date. The proceeds of the loan will be
credited to your current account no. 309716 00450767.

 

Interest
is to be payable at a fixed rate and, because of this, if for any reason the loan is not borrowed on the date agreed, including
non-satisfaction of the PRECONDITIONS set out below, you shall pay to the Bank the administration fee and any Break Cost
as provided in clause 2.3 of the GENERAL TERMS AND CONDITIONS.

 

Unless
the Rank agrees otherwise, the loan may not be borrowed until all the PRECONDITIONS set out below have been satisfied.

 

PRECONDITIONS

 

Unless
received by the Bank prior to the date on which this agreement is signed by the Bank, the Bank is to receive in form and substance
acceptable to the Bank the security and other documents (if any) listed in the Security Schedule to this agreement and the documents,
evidence or other requirements of the preconditions (if any) set out in the Preconditions Schedule to this agreement. Any security
received should be accompanied by such evidence as the Bank may reasonably require to confirm the value of such security and to
confirm that such security is fully effective.

 

FEES
AND COSTS

 

You
shall pay any costs and expenses incurred by the Bank in assessing the loan, in the preparation of this agreement and of any amendment,
waiver or consent letter at any time entered into, in the preparation, valuation, taking or release of any guarantee or security
at any time given in connection with this agreement and in connection with the revaluation of any such security from time to lime.
These costs and expenses may arise whether or not the loan is made available to you. Except in the case of the costs detailed
below, the Bank will provide you with an estimate of the amount of any such costs and expenses before they are payable. The following
charges shall be paid by you on demand by the Bank.

 

Security
Costs £250 (estimated).

 

Estimated
charges have been calculated on the basis of the Bank’s experience with similar transactions. The actual amount charged to you
may be more or less than the estimated figure.

 

An
arrangement fee of £11,250 is also payable. This fee shall be paid to the Bank by you on the date the loan is borrowed.

 

As
mentioned in EARLY REPAYMENT FEES AND COSTS below and in clauses 2, 3, 5 & 6 of the GENERAL TERMS AND CONDITIONS,
other costs may arise in connection with the loan or in connection with the repayment of the loan.

 

INTEREST

 

The
rate of interest payable on the loan will be a fixed rate equal to the aggregate of an interest margin of 4.75% per annum and
the rate (inclusive of regulatory costs - see clause 3.2 of the GENERAL TERMS AND CONDITIONS) quoted by the Bank’s Wholesale
Markets division at or about the time of borrowing for the term of the loan.

 

Interest
shall be paid by you 1 month after the date the loan is borrowed, at monthly intervals thereafter and on the date of final repayment
of the loan.

 

Interest
is calculated on a daily basis on the amount of the loan from time to time outstanding. Interest for any particular period is
calculated on the number of days in that period and a year of 365 days.

 

If
you fail to pay any amount payable under this agreement when due the rate of interest may be increased in accordance with clause
6.3 of the GENERAL TERMS AND CONDITIONS.

 

REPAYMENT

 

The
loan is repayable in 60 consecutive monthly instalments in respect of principal only, commencing on the date which is 1 month
after the date the loan is borrowed. The amount of these instalments will vary so that the total principal and interest to be
paid by you each month is more or less equal.

 

EARLY
REPAYMENT FEES AND COSTS

 

The
loan may be repaid early in accordance with clause 2 of the GENERAL TERMS AND CONDITIONS. You shall, at the time an early
repayment is made, pay to the Bank the administration fee and any Break Cost as provided in clause 2.3 of the GENERAL TERMS
AND CONDITIONS.

 

    	 

    	Continuation of a LOAN AGREEMENT between
LLOYDS TSB BANK PlC and EMRISE ELECTRONICS LIMITED	2	 

    

   

FINANCIAL
COVENANTS

 

For
as long as any moneys arc owing to the Bank under this agreement or the Bank is under any obligation under this agreement you
shall comply with the financial covenant set out below.

 

Net
Worth is at all times from and after 31st December 2011 to be maintained at not less than £4,200,000 and shall increase
annually by not less than £200,000.

 

This
covenant will be tested against each financial statement.

 

PERIOD
OF OFFER

 

This
agreement shall come into effect only if the Bank receives from you and finds in order a signed copy of this agreement on or before
15th August 2011 for such later date as the Bank may agree).

 

GENERAL
TERMS AND CONDITIONS 

 

Use
of Loan Proceeds

 

	1.1	Unless
    the loan is only for working capital or general business purposes, the amount borrowed shall be held in trust for the Bank
    until used for the purpose stated in the SPECIFIC TERMS AND CONDITIONS.

 

Repayment

 

	2.1	You
    will repay the loan on the dates and in the manner set out in the REPAYMENT section of the SPECIFIC TERMS AND CONDITIONS.

 

If
you fail to make any repayment in full and by the time the Bank calculates the next repayment instalment amount, the Bank may
(at its discretion and without prejudice to the Bank’s rights expressed in clause 6.1 below):

 

	 	(a)	increase
    the amount of that next instalment and each of your remaining regular instalments proportionately to ensure that the full
    balance of the loan is repaid within the agreed term of the loan;
	 	 	 
	 	(b)	extend
    the term of the loan; or
	 	 	 
	 	(c)	increase
    the amount of the final repayment instalment.

 

The
Bank will apply any payments it receives from you against any interest before any other amounts on your account, including the
outstanding principal balance of the loan. This will not apply to payments made specifically for fees and/or charges or where
the Bank collects the interest and principal that make up your repayment from separate accounts.

 

	2.2	You may at any time after giving at least 5 business days’ notice to the Bank make early repayment of all of the loan together with interest accrued to the date of payment and any amount that may be payable pursuant to clause 2.3 below. The loan may not be borrowed again once it has been repaid. You may not make an early repayment of part of the loan unless the Bank agrees to the request by you to make such an early repayment. If the Bank agrees to allow an early repayment of part of the loan, such early repayment shall be made together with interest accrued to the date of payment and any amount that may be payable pursuant to clause 2.3 below. Each early repayment of part of the loan must be of at least £10.000 (excluding accrued interest) and no amount repaid early may be borrowed again. If the loan is to be repaid in more than one amount, the Bank will decide how to apply the early repayment, either (a) by reducing subsequent repayments proportionately or (b) by applying the early repayment to the then latest scheduled repayment instalments so as to reduce the term of the loan.

   

	2.3	The
    fixed rate of interest will protect you against the risk of an increase in interest rates during the time the fixed rate applies.
    The Bank, however, also needs to be protected if you repay the loan early or for any reason you do not borrow the loan in
    full within the period or, as the case may be, on the date agreed, and owing to a fall in interest rates the Bank is not able
    to re-lend at the same interest rate as for the loan.
	 	 
	 	You.
    therefore, agree that, if interest on the loan is to be payable at a fixed rate of interest during any part of its term and
    (a) for any reason you do not borrow the loan in full within the period or, as the case may be, on the date agreed, or (b)
    on any day during any fixed rate period you repay the loan early in whole or in part or are required (pursuant to the terms
    of this agreement) to repay the loan early (the date referred to in (a) or, as the case may be, (b) above being hereinafter
    referred to as the “Break Date”) you will pay to the Bank on the Break Date the Break Cost and an administration
    fee of £250.

 

For
the purposes of this agreement, the “Break Cost” is the amount by which:

 

	 	(i)	the
    gross interest which the Bank would have been entitled to receive on the amount not borrowed or. as the case may be. on the
    amount repaid early (had the loan been drawn in full and repaid in accordance with the originally agreed repayment structure)
    for the period from the Break Date to the last day of the fixed rate period less any amount payable in respect of the interest
    margin chargeable by the Bank,
	 	 	 
	 	Exceeds	 
	 	 	 
	 	(ii)	the
    interest which the Bank would be able to obtain by placing an amount equal to the amount not borrowed or, as the case may
    be, the amount repaid early on deposit with a leading bank in the London interbank market for the period from the Break Date
    to the last day of the fixed rate period and with the same repayment structure as agreed for the loan

.

The
Bank will certify (such certificate to be conclusive in the absence of fraud or manifest error)
lo you the Break Cost.

 

    	 

    	Continuation of a LOAN AGREEMENT between
LLOYDS TSB BANK PlC and EMRISE ELECTRONICS LIMITED	3	 

    

 

LLYDS
TSB BANK PLC and EMRISE ELECTRONICS LIMITED

 

Increased
Costs and Changes in Circumstances

 

	3.1	In
                                         running its business the Bank and any holding company of the Bank each has to comply
                                         with certain regulations and requirements laid down by regulatory and other official
                                         organisations or bodies as well as the law generally. The rate of interest quoted in
                                         the SPECIFIC TERMS AND CONDITIONS
                                         has been set in the light of how this affects the cost (to the Bank and
                                         any such holding company) of the Bank funding, agreeing to make and of making
                                         the loan available at the time the Bank signed this agreement. If. as a result of any
                                         new laws, regulations or requirements or any changes in existing ones or in the interpretation
                                         or application of any existing ones, such cost is increased, the Bank may increase the
                                         rate of interest charged on the loan to compensate for that extra cost. The Bank will
                                         advise you in writing within 30 days of
                                         such increase taking effect

 

	3.2	The
                                         fixed rate of interest specified in the SPECIFIC
                                         TERMS AND CONDITIONS includes regulatory costs. These arc the costs to the
                                         Bank at the time the Bank signed this agreement in funding, agreeing to make and making
                                         the loan available that result from complying with the liquidity, monetary control, prudential
                                         requirements and supervisory charge requirements of the Bank of England, the Financial
                                         Services Authority and any other regulatory authority. Regulatory costs may vary from
                                         time to time and any such variation may result in the Bank changing the fixed rate of
                                         interest payable on the loan. The Bank will determine the regulatory costs on each date
                                         interest on the loan is due to be paid and, if in the Bank’s opinion there is then a
                                         material difference (either up or down) in regulatory costs it will advise you in writing
                                         within 30 days of the new rate of interest then to apply to the loan.

 

	3.3	(a)	 	If
    the currency in which the loan is denominated is due to be or has been converted into the euro or into any other currency
    as a result of a change in law. the Bank can amend any term of this agreement. Such an amendment will be only to the extent
    the Bank thinks necessary to comply with any generally accepted conventions and market practice in the London interbank market
    and otherwise to reflect the change in currency and to put the Bank in the same position, so far as possible, that it would
    have been in if no change in currency had occurred.
	 	 	 	 
		(b)	 	The
    Bank can also change any term of this agreement at any time (even if” an Event of Default has not occurred):
	 	 	 	 
		 	(i)	to
    reflect the introduction of or any other change in law or in any code of practice which applies to the Bank or the way the
    Bank is regulated;
	 	 	 	 
		 	(ii)	to
    reflect any changes the Bank makes to its systems or processes: or
	 	 	 	 
		 	(iii)	if
    the change is to your advantage.
	 	 	 	 
		(c)	 	If
    the Bank makes a change pursuant to this clause 3.3 which is to your disadvantage, the Bank will give you 30 days’ prior notice.
    This notice may be by letter, email, text, statement inserts or messages or in any other way which is sent to you. The Bank
    can make any other changes straight away by telling you personally or by putting notices in a selection of national newspapers,
    in its branches or on its website within the next 30 days.
	 	 	 	 
		(d)	 	At
    any time within 60 days of receipt of the Bank’s 30 days’ notice (as referred to in paragraph (c) above) you may make early
    repayment of all (but not part) of the loan. Such repayment shall be in accordance with clause 2 above (including the payment
    to the Bank of the administration fee and any Break Cost as provided in clause 2.3 above).

 

Representations

 

		4.1	You
                                         represent that:

 

	 	(a)	all
    action required or necessary to authorise the execution of this agreement and the security documents (if any) required from
    you by this agreement and the performance of your obligations under and in connection with this agreement and such security
    documents has been taken,
	 	 	 
	 	(b)	neither
    the execution of this agreement nor the performance of your obligations under and in connection with this agreement, including
    the giving of any security, will constitute or result in any breach of any agreement, law, requirement or regulation (including,
    for the avoidance of doubt, your constitutive documents),
	 	 	 
	 	(c)	no
    material litigation, administrative or judicial proceedings are presently pending or threatened against you, any of your subsidiaries
    or any of your or any such subsidiary’s directors,
	 	 	 
	 	(d)
    	there
    has been no material adverse change in your financial condition or that of any of your subsidiaries since the date of the
    financial statement received by the Bank prior to the date on which this agreement is signed by the Bank, and
	 	 	 
	 	(e)	no
    Event of Default (as described in clause 6.1 below) has occurred and is continuing and no circumstance has occurred which,
    with the giving of notice or the passing of time, could become or cause an Event of Default.

 

		4.2	You
                                         shall be deemed to repeat the above representations on each day (with reference to the
                                         facts and circumstances then existing) prior to borrowing the loan and thereafter until
                                         all amounts payable to the Bank under this agreement have been paid.

 

Undertakings

 

Prior
to borrowing the loan and thereafter until all amounts payable to the Bank under this agreement have been paid:

 

5.1
neither you nor any of your subsidiaries shall without the Bank’s consent:

 

	 	(a)	create
    or allow to be in place any mortgage, charge or other security interest or encumbrance over the whole or any part of your
    or their business or any of the property, income or other assets of your or their business or enter into any transaction which
    in the Bank’s opinion has a similar effect, or factor or assign any debts,

 

    	 

    	Continuation of a LOAN AGREEMENT between
LLOYDS TSB BANK PlC and EMRISE ELECTRONICS LIMITED	4	 

    

  

	 	(b)	part
    with, sell, transfer, lease or otherwise dispose of (or attempt or agree to do any such thing) the whole or any material part
    of your or any of your subsidiary’s undertaking, property, revenue or assets (either by a single transaction or a number of
    transactions whether related or not) other than for full value on an arm’s length basis (save that no such parting with, sale,
    transfer, lease or other disposal may be made or entered into (i) if it would breach the terms of any security document given
    to the Bank, or (ii) in respect of any undertaking, property, revenue or asset over which the Bank then has a fixed charge
    or fixed security interest)
	 	 	 
	 	(c)	change
    the nature of your or their business as it is now conducted,
	 	 	 
	 	(d)	agree
    or enter into any substantial property transaction as set out in Sections 190 to 196 of the Companies Act 2006, or
	 	 	 
	 	(e)	make
    any loan, give any guarantee or provide any other security as set out in Sections 197 to 214 of the Companies Act 2006 or
    allow any such loan, guarantee or other security to continue,

 

		5.2	you
                                         shall provide to the Bank:

 

	 	(a)	copies
    of your financial statement within 270 days of the end of each financial year, and
	 	 	 
	 	(b)	copies
    of your monthly management accounts in a form acceptable to the Bank within 45 days of the end of the period to which they
    relate. The Bank may at its option require such management accounts to incorporate an age- analysis of debtors, a schedule
    of all tenancies (if any) of any property held by the Bank as security at the date of the accounts, and/or a breakdown of
    stock in trade, and
	 	 	 
	 	(c)	copies
    of any financial information or information regarding any security that the Bank may from time to time reasonably request
    promptly on request and within any timescale reasonably required by the Bank,

 

		5.3	you
                                         and each of your subsidiaries shall
                                         maintain with reputable underwriters or insurance companies adequate insurance on and
                                         over your respective business and
                                         assets. Such insurance is to be against such risks and to the extent usual for persons
                                         carrying on a business such as
                                         That carried on by you or, as the case may be, by the relevant subsidiary
                                         and is, if so requested by the Bank
                                         at any time, to include appropriate terrorism cover. From time to time upon the request
                                         of the Bank, you shall furnish the Bank with evidence of such insurance,

 

		5.4	in
                                         respect of any pension policy or life policy held by or charged to the Bank, you agree
                                         to ensure that the premiums are paid when due and, upon request from the Bank at any
                                         time, promptly to provide the Bank with evidence that payment has been made. In the case
                                         of any such pension policy you also agree:

 

	 	(a)	upon
    request by the Bank at any time, promptly to provide the Bank with evidence that the commutation proceeds will be paid to
    the Bank,
	 	 	 
	 	(b)	except
    to the extent that you have and apply other funds in repayment of the loan, to take the maximum benefit of the pension policy
    by way of commutation and to apply that benefit in repayment of the loan when due, and
	 	 	 
	 	(c)	not
    to agree to any arrangement that would reduce the commutation amount of the pension policy nor arrange far any transfer to
    be made from the pension policy.

 

		5.5	if
                                         the purpose of the loan (as slated in the SPECIFIC TERMS AND CONDITIONS) involves building
                                         works or works enabling building works affecting any property, you agree that promptly
                                         upon request by the Bank at any time you shall:

 

	 	(a)	provide
    the Bank with evidence in a form acceptable to the Bank that you have obtained all necessary permissions and approvals for
    the proposed works and have entered into (in a form of contract acceptable to the Bank) all contracts necessary for the due
    completion of the proposed works. You will at all times ensure that any other party to any such contract (whether or not such
    contract has been provided to the Bank) complies with the contract in accordance with its terms. You shall not, without the
    consent of the Bank, agree to any modification in the terms of any contract which has been provided to the Bank, or terminate
    any such contract or stop work on any proposed works prior to completion of the works, and
	 	 	 
	 	(b)	provide
    to the Bank confirmations (each in a form and from a party acceptable to the Bank) of all expenditure on the works. The Bank
    may refuse to permit the borrowing of the loan if the amount to be borrowed under this agreement in respect of the works exceeds
    the total expenditure detailed in the confirmations, and

 

		5.6	you
                                         agree to reduce the loan (in accordance with clause 2 above, including the payment to
                                         the Bank of the administration fee and any Break Cost as provided in clause 2.3 above)
                                         or to provide the Bank with additional security acceptable to the Bank if the ratio of
                                         the loan to the value of the security given to the Bank is at any time higher than that
                                         applicable on the date this agreement was signed by the Bank and agree to provide such
                                         evidence as the Bank may from time to time require to confirm the value of such security
                                         and to confirm that the security remains fully effective. If the loan is to be repaid
                                         in more than one amount, the Bank will decide how to apply any early repayment, either
                                         (a) by reducing subsequent repayments proportionately or (b) by applying the early repayment
                                         to the then latest scheduled repayment instalment(s) so as to reduce the term of the
                                         loan.

 

Default
and Termination

 

	 	6.1	The events listed in (a) to
(k) below are called “Events of
Default”. As soon as an Event of Default happens or at any time thereafter, by giving notice to you, the Bank
may cancel any obligations it has to lend money to you and may also make the loan become repayable on demand. When the loan is
repayable on demand, you must repay the loan to the Bank together with all interest which has accrued on the loan and any other
amounts owing under this agreement (including the payment to the Bank of the administration fee and any Break Cost as provided
in clause 2.3 above) as soon as the Bank requests you to pay these amounts. The Bank may do this at the time the loan becomes
repayable on demand or at any later time.

 

    	 

    	Continuation of a LOAN AGREEMENT between
LLOYDS TSB BANK PlC and EMRISE ELECTRONICS LIMITED	5	 

    

 

Events
of Default

 

	 	(a)	you
    fail to pay when due any indebtedness owed by you to the Bank.
	 	 	 
	 	(b)	you
    fail to comply with any other obligation or undertaking to the Bank or with the terms of any other agreement with the Bank
    or an event of default arises in connection with any other agreement with the Bank.
	 	 	 
	 	 	(c)
    any representation or statement made by you to the Bank, whether or not in connection with this agreement, proves to have
    been incorrect or inaccurate when made or deemed made,
	 	 	 
	 	(d)	you
    fail to pay when due any indebtedness owed by you to another creditor or any of your creditors changes (or obtains the right
    to change) the original date on which that indebtedness is or was due to be paid to an earlier date as a result of your failure
    to comply with obligations in connection with that indebtedness,
	 	 	 
	 	(e)	any
    person with a legal claim takes possession or a receiver, administrator, custodian, trustee, liquidator or similar official
    is appointed of the whole or any part of your business or of any of the assets of your business or an administration application
    is presented or made for the making of an administration order or a notice of intention to appoint an administrator is issued
    by you or your directors or by the holder of a qualifying floating charge or notice of appointment of an administrator is
    Filed by any person with the court or a judgment, decree or diligence is made or granted against you,
	 	 	 
	 	(f)	proceedings
    are commenced or a petition is presented or an order is made or a resolution is passed for your
	 	 	 
	 	 	winding
    up or you are or become insolvent or you stop or threaten to stop payment of your debts generally or you are deemed by law
    unable to pay your debts or you or your directors convene or become obliged to convene a meeting of shareholders or creditors
    with a view to winding up or an application is made in connection with a moratorium or a proposal to creditors for a voluntary
    arrangement by you or you take any action (including entering negotiations) with a view to readjustment, rescheduling, forgiveness
    or deferral of any part of your indebtedness,
	 	 	 
	 	(g)	you
    cease or threaten to cease to carry on your business in the normal course or fail to maintain or breach any franchise, licence
    or right necessary to conduct your business or breach any legislation relating to your business, including but not limited
    to any applicable environmental protection laws,
	 	 	 
	 	(h)	the
    persons who now control you cease to have such control,
	 	 	 
	 	(i)	any
    guarantee, other security or other document or arrangement relied upon by the Bank in connection with the loan ceases to be
    continuing or ceases to remain fully effective or notice of discontinuance is received by the Bank or if the Bank reasonably
    believes that the effectiveness of any such document or arrangement is in doubt or if any provision of such document or arrangement
    is not complied with for any reason or any favourable tax treatment afforded to any pension policy or to any life policy held
    by or charged to the Bank ceases to be available,
	 	 	 
	 	(j)	any
    of the above events occur in relation to any parent or subsidiary or any guarantor of or other provider of
	 	 	 
	 	 	security
    for the loan or, in the case of any individual that provides any guarantee or other security for the loan, a petition is presented
    for a bankruptcy or sequestration order against any such individual or any such individual dies or becomes incapable of managing
    his or her affairs because of any lack of mental capacity, or any action is taken in any jurisdiction which is similar or
    analogous to any of the above events in respect of you or any of the above mentioned parties, or
	 	 	 
	 	 	(k)
    you fail or have foiled to disclose to the Bank any important information that is relevant to the loan or the security required
    or you undertake or are subject to any action or occurrence which the Bank reasonably believes could place at risk the payment
    of any amount owing to the Bank.

 

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

 

		6.3	If
                                         any amount payable in respect of this agreement is not paid when due (including any amount
                                         payable under this clause 6) you shall pay interest on that amount at the default rate
                                         from the date on which the amount was due until it is paid to the Bank. Interest, if
                                         unpaid, shall be added to the amount in default at monthly intervals. The default rate
                                         shall be the rate determined by the Bank to be
                                         3% per annum higher than the rate of interest specified in the SPECIFIC TERMS
                                         AND CONDITIONS that would normally apply.

 

		6.4	You
                                         shall indemnify the Bank against any costs incurred or losses reasonably sustained by
                                         the Bank as the result of any Event of Default happening or any failure by you to pay
                                         any amount demanded by the Bank as a result of an Event of Default.

 

		6.5	You
                                         shall also pay any costs and expenses reasonably incurred by the Bank in enforcing or
                                         perfecting any security for the loan and in enforcing or preserving its rights under
                                         this agreement.

 

Assignment
and Securitisation

 

		7.1	This
                                         agreement is for the benefit of the contracting parties, their respective successors
                                         and permitted assigns. The agreement does not and will not confer any benefit on or be
                                         enforceable by any third party (other than by any such successor or permitted assign).

 

		7.2	The
                                         Bank may at any time and without any further consent agree or enter into a Transfer,
                                         although, without prejudice to any other type of transfer, no Transfer of the Bank’s
                                         obligations shall be effective until such time as the Transferee shall have confirmed
                                         that it is bound by the terms of this agreement: Following such confirmation you shall
                                         look only to the Transferee in respect of that portion of the Bank’s obligations transferred
                                         to the Transferee. You will not assign any of your rights or transfer any of your obligations
                                         under this agreement without the prior written consent of the Bank.

 

    	 

    	Continuation of a LOAN AGREEMENT between
LLOYDS TSB BANK PlC and EMRISE ELECTRONICS LIMITED	6	 

    

  

		7.3	The
                                         Bank may disclose any information about you or any of your subsidiaries to their auditors
                                         for the time being, to any Transferee or potential Transferee, to any rating agency or
                                         listing authority, to any advisers of any such party or of the Bank and to any other
                                         person to whom the Bank believes it is reasonable to disclose such information in connection
                                         with any proposed Transfer. This may include information about your finances or the finances
                                         of any subsidiary, the loan and any security document relating to. or other document
                                         relied on by the Bank in connection with, this agreement.

 

		7.4	You
                                         will co-operate with and assist the Bank to complete any proposed Transfer. In particular,
                                         you will assist the Bank in transferring the benefit of any security document given in
                                         connection with this agreement, whether that Transfer is to the Transferee or to a security
                                         trustee appointed by the Bank and/or the Transferee. The Bank will reimburse you for
                                         all legal and other out of pocket costs and expenses including any registration (or similar)
                                         fees incurred with the prior written agreement of the Bank in connection with requests
                                         made by the Bank pursuant to this clause 7.4.

 

Other

 

		8.1	This
                                         agreement and any non-contractual obligations arising from or connected with this agreement
                                         shall be governed by- English law and is subject to the jurisdiction of the English Courts.
                                         The Bank may take action against you in any other jurisdiction where proceedings may
                                         be lawfully commenced.
	 	 	 

		8.2	No
                                         delay or omission by the Bank in exercising any of its rights hereunder shall operate
                                         or be construed as a waiver, nor shall any single or partial exercise of any such right
                                         prevent any other or further exercise thereof or the exercise of any other right.

 

		8.3	If
                                         the loan is to be borrowed, or if any payment becomes due from you, on a day which is
                                         not a business day then the amount concerned will be borrowed or, as the case may be,
                                         will become payable on the next business day. All payments from you are to be made without
                                         any set-off, deduction or withholding of any nature.

 

		8.4	The
                                         Bank may use any credit balance there may be on any of your accounts towards payment
                                         of any amounts owed by you to the Bank under this agreement without notifying you beforehand,
                                         whether such credit balances are in sterling or any other currency or are deposited for
                                         fixed or determinable periods.

 

		8.5	Unless
                                         otherwise agreed by the Bank you shall at all times during the term of this agreement
                                         keep a current account (or other account for the purposes of meeting all payments due
                                         to the Bank under and in connection with this agreement) with the Bank and all amounts
                                         from time to time due to the Bank under this agreement may be debited to that account.
                                         You shall keep enough money in the account (or ensure that there are sufficient funds
                                         available within any agreed overdraft) to meet all such payments as they become due.

 

		8.6	Any
                                         security given to the Bank (whether given before the date on which this agreement is
                                         signed by the Bank or at any time in the future and whether or not specified in this
                                         agreement) shall, unless otherwise agreed by the Bank, be security not only for the loan
                                         but also for all other moneys and liabilities whether certain or contingent at any time
                                         due, owing or incurred by you to the Bank.

 

		8.7	This
                                         agreement and all communications from you to the Bank in connection with this agreement
                                         and the loan (all of which are to be sent in writing to the Bank at the address given
                                         at the heading of this agreement or to such other address as the Bank may from lime to
                                         time advise) shall be signed on your behalf either in accordance with the mandate given
                                         by you to the Bank, or if requested by the Bank, in accordance with a specific resolution
                                         of your Board of Directors. All communications (whether given by you or by the Bank)
                                         relating to the loan and any change to this agreement shall be in English.

 

		8.8	The
                                         Bank will not be liable for any loss, damage, interruption, delay or non-performance
                                         in connection with this agreement caused in whole or in part by events which are beyond
                                         the Bank’s reasonable control. This may include, for example, explosion, terrorism, war.
                                         riot or other civil disturbance or failure or interruption of any electronic communications
                                         system.

 

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

 

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

 

	 	8.11	References in this agreement
to:

 

an
Act or any other statutory provision shall be deemed to mean and to include a reference to any amendment to or restatement of
that Act or other provision for the time being in force.

 

the
Bank includes its successors and assigns.

 

a
business day means a day other than a Saturday or a Sunday on which banks are open for normal business in England and Wales.

 

control
shall have the meaning given to it in Section 995 of the Income Tax Act 2007.

 

financial
statement means at any particular time the latest consolidated annual balance sheet and profit and loss account (being audited
or signed by an independent accountant if so required by law or by the Bank at any time and being prepared on the same basis,
containing a similar level of detail and in accordance with the same accounting principles as, and for an accounting reference
period consistent with, the latest such balance sheet and profit and loss account received by the Bank prior to the date on which
this agreement is signed by the Bank) of you and your subsidiaries together with the notes to both.

 

loan
means, at any particular time, the total amount which may be borrowed by you under this agreement or, if appropriate, the total
amount which has been debited to the loan account and remains outstanding
at such time. The loan may, at any time, include any interest, costs and charges
added to the loan account in accordance with this agreement.

 

    	 

    	Continuation of a LOAN AGREEMENT between
LLOYDS TSB BANK PlC and EMRISE ELECTRONICS LIMITED	7	 

    

  

month
means a calendar month.

 

parent
and subsidiary
shall have respectively the meaning given to parent undertaking and subsidiary undertaking in Section 1162
of the Companies Act 2006. During any period in which you do not have a subsidiary,
all references to your subsidiaries shall be ignored and the relevant
text read and construed accordingly.

 

Transfer
means any assignment, transfer, securitisation or other disposal by the Bank of all or any of its rights or obligations under
this agreement to any other person, the sale of any participation in any such rights or obligations to any other person, and any
other transaction of any nature which has the effect of transferring the economic or credit risks or rewards of the Bank under
or in connection with this agreement to any other person.

 

Transferee
means any person to whom a Transfer is made or with whom a Transfer is entered into.

 

	 	8.12	For the purposes of the financial
covenants:

 

Net
Worth shall mean at any particular time the aggregate of the amount paid up on your issued share capital and the consolidated
distributable and non-distributable reserves of you and your subsidiaries but (a) after deducting the total of any debit balance
on profit and loss account and the book value of goodwill and any other intangible
assets, and (b) excluding any minority interests in subsidiaries and any increase in the valuation of assets subsequent to the
date of the financial statement.

 

Use
of Personal Information and Credit, Fraud and Identification Checks

 

When
you apply to open an account, the Bank will check its own records for information on individuals who are Key Account Parties.
“Key Account Parties’” are individuals who are sole traders, proprietors, partners, directors, members, beneficial
owners, trustees or other controlling officials of the business or organisation including signatories to the account. The Bank
may also carry out a search through credit reference agencies on these individuals. The credit reference agencies will keep a
record of this search and this record may be used by other organisations to verify their identities. The Bank may also check or
share information with fraud prevention agencies to prevent fraud and money laundering.

 

When
you apply for credit and credit related or other facilities, the Bank may carry out a search through credit reference agencies
on you and/or Key Account Parties. The credit reference agencies will keep a record of this search whether or not the application
proceeds. A record of the search on personal files will not be made available to other organisations. A record of the search on
the business file will be made available to other organisations. The Bank may also check or share information with fraud prevention
agencies to prevent fraud and money laundering.

 

When
you have an account with the Bank, the Bank may disclose how you have run your account(s) to credit reference agencies. If you
borrow and do not repay in full and on time, the Bank may tell the credit reference agencies. The Bank may make periodic searches
of the Lloyds Banking Group records and credit reference agencies to manage your account(s) including to make decisions whether
to continue or extend existing credit. The “Lloyds Banking Group” includes
the Bank and a number of other companies using brands including Lloyds TSB. Halifax and Bank of Scotland, and their associated
companies. More information on the Lloyds Banking Croup can be found at www.lloydsbankinggroup.com. For these purposes “associated
companies” includes Lloyds Banking Group plc and any subsidiary, affiliate or other firm directly or indirectly controlled
from time to time by either Lloyds Banking Group plc or by the Bank.

 

The
Bank may also check and share information with fraud prevention agencies to prevent fraud and money laundering.

 

If
false or inaccurate information is provided or fraud is suspected, details may be passed to fraud prevention agencies and other
relevant agencies.

 

If
you or Key Account Parties ask, the Bank will tell you or them which credit reference and fraud prevention agencies it has used
so you or they can get a copy of your or their details from these agencies.

 

This
is a condensed guide to the use of your personal and business information by the Bank and at credit reference and fraud prevention
agencies. If you would like to read full details of how data may be used, please visit the website at www.lloydstsb.com/commercial/customcrdata
or contact your relationship manager.

 

Preconditions
Schedule

 

No
preconditions required.

 

Security
Schedule

 

		(1)	an
                                         unlimited debenture from Emrise Electronics Limited, and

 

		(2)	an
                                         omnibus guarantee and set off agreement dated 3rd June 2008 among the Bank. Emrise Electronics
                                         Limited, Xcel Power Systems Limited and Pascall Electronics Limited

 

    	 

    	Continuation of a LOAN AGREEMENT between
LLOYDS TSB BANK PlC and EMRISE ELECTRONICS LIMITED	8	 

    

 

You
acknowledge having received, read and understood a copy of this agreement and, in consideration of the Bank agreeing to grant
the loan, agree to the SPECIFIC TERMS AND CONDITIONS and to the GENERAL TERMS AND CONDITIONS set out above (together the
“agreement’’)- You also acknowledge that this agreement comprises all the terms currently applicable to the loan
and that no representation, warranty or undertaking has been made by the Bank in connection with the loan which is not set out
in this agreement and, in deciding to enter into this agreement and to proceed with any transaction or project for which the loan
has been sought, you recognise that the Bank has no duty to give you advice and you have not received or relied upon any advice
given by the Bank.

 

Signed
for and on behalf of Emrise Electronics Limited by

 

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

 

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

 19/7/2011

	Date	 	 

 

  

Important
note:

This
agreement creates legal obligations. Before signing you may wish to take independent advice.

 

Please
note that if you do not make any borrowing on the date agreed or, for any reason, you repay early, or are required to repay early,
the loan or any part of the loan, you will have to compensate the Bank for its costs and losses.

 

www.lloydstsb.com

Please
contact your relationship manager if you would like this agreement in Braille, large print or on audio tape. The Bank accepts
calls made though RNID Typetalk.

Calls
may be monitored or recorded in case the Bank needs to check it has carried out your instructions correctly and to help improve
its quality of service.

 

1
..loyds TSB Bank plc Registered Office: 25 Gresham Street, London EC2V 7 HN. Registered in England Number 2065.

Authorised
and regulated by the Financial Services Authority.

 

Version
27042011

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