Document:

EXHIBIT 10.13

 

Dated 30 November 2007

 

(1) EMRISE ELECTRONICS CORPORATION

as Chargor

 

-and-

 

(2) GVEC RESOURCE IV INC.

as Collateral Agent

 

 

 

SHARE CHARGE

 

 

 

TABLE OF CONTENTS

 

	
  Clause

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  DEFINITIONS AND INTERPRETATION

  	
   

  	
  1

  
	
  2.

  	
  COVENANT TO PAY

  	
   

  	
  4

  
	
  3.

  	
  CHARGE

  	
   

  	
  4

  
	
  4.

  	
  COVENANTS BY THE CHARGOR

  	
   

  	
  4

  
	
  5.

  	
  DIVIDENDS AND VOTING RIGHTS

  	
   

  	
  6

  
	
  6.

  	
  REPRESENTATIONS AND WARRANTIES
  BY THE CHARGOR

  	
   

  	
  6

  
	
  7.

  	
  FURTHER ASSURANCE

  	
   

  	
  7

  
	
  8.

  	
  POWERS OF THE COLLATERAL AGENT

  	
   

  	
  7

  
	
  9.

  	
  RECEIVER

  	
   

  	
  8

  
	
  10.

  	
  CONTINUING SECURITY AND PROTECTIVE
  PROVISIONS

  	
   

  	
  9

  
	
  11.

  	
  NEW ACCOUNTS, SUSPENSE ACCOUNTS,
  NON-MERGER

  	
   

  	
  10

  
	
  12.

  	
  POWER OF ATTORNEY

  	
   

  	
  11

  
	
  13.

  	
  DISCHARGE CONDITIONAL

  	
   

  	
  11

  
	
  14.

  	
  DISCHARGE OF SECURITY

  	
   

  	
  12

  
	
  15.

  	
  CURRENCY

  	
   

  	
  12

  
	
  16.

  	
  COSTS

  	
   

  	
  13

  
	
  17.

  	
  ASSIGNMENT

  	
   

  	
  13

  
	
  18.

  	
  NOTICES

  	
   

  	
  14

  
	
  19.

  	
  MISCELLANEOUS

  	
   

  	
  15

  
	
  20.

  	
  LAW AND JURISDICTION

  	
   

  	
  15

  
						

 

i

 

THIS
SHARE CHARGE (such agreement, as the same may from
time to time be amended, supplemented, restated, replaced or otherwise modified
herein referred to as this “Share
Charge”) is made as a deed on 30 November 2007.

 

BY:

 

1.                                       EMRISE ELECTRONICS CORPORATION a company organized and
existing under the laws of the State of New Jersey (the “Chargor”)

 

IN FAVOUR OF

 

2.                                      GVEC RESOURCE IV INC., a company organized and existing
under the laws of the British Virgin Islands, acting as collateral agent (such
entity, acting in such capacity, together with it successors and assigns,
herein referred to as the “Collateral Agent”)
for the benefit of the Lenders that are from time to time parties to the Credit
Agreement (as defined below), the “Lenders”).

 

RECITALS

 

(A)                              On
or about the date hereof, a Credit Agreement has been entered into between
EMRISE Corporation, a company organized and existing under the laws of the
State of Delaware (the “Parent”),
each of the Parent’s Subsidiaries identified on the signature pages thereof
(such Subsidiaries, together with the Parent, herein collectively referred to
as the “Borrowers”), the Collateral
Agent and the Lenders (such agreement, as the same may from time to time be
amended, supplemented, restated, replaced or otherwise modified herein referred
to as the “Credit Agreement”).

 

(B)                                The
Chargor will derive substantial direct and indirect economic and other benefits
from the extensions of credit under the Credit Agreement. It is also a
condition precedent to the effectiveness of the Credit Agreement that the
Chargor shall have entered into this Share Charge.

 

NOW THIS
DEED WITNESSES as follows:

 

In
consideration of the execution, delivery and performance by the Lenders of the
agreements referred to above, the Chargor hereby agrees with the Collateral
Agent (acting for the benefit of itself and the Lenders in accordance with the
provisions of the Credit Agreement) as follows:

 

1.                                       DEFINITIONS
AND INTERPRETATION

 

1.1                                 Terms
Defined Above

 

Terms defined
above shall have their specified meanings.

 

1.2                                 References
to Collateral Agent

 

When
references are made herein to the Collateral Agent, unless otherwise indicated,
it is understood that such references refer to the Collateral Agent, acting as
agent for the

 

1

 

benefit of
itself and the Lenders in accordance with the provisions of the Credit
Agreement.

 

1.3                                 Other
Defined Terms

 

Words and
expressions defined in the Credit Agreement shall, save as otherwise defined
herein, bear the same meanings in this Share Charge but so that, so far as the
context admits, the following expressions shall have the respective meanings
ascribed to them:

 

“Beneficiaries”
means the Collateral Agent and the Lenders and “Beneficiary” means each or any
of them;

 

“Business
Day” means a day on which banks are open in London for the transaction of
business;

 

“Company”
means EMRISE Electronics Ltd. (Company No. 1969006) having its registered office
at Brunswick Road, Coobs Wood, Ashford, Kent TN23 1EH, UK;

 

“Loan Documents”
has the meaning given to that expression in the Credit Agreement;

 

“Obligors”
means, collectively, (a) the Borrowers; (b) each other entity that is now or
may hereafter be a party to the UK Guaranty (as such term is defined in the
Credit Agreement) (c) each other entity that is now or may hereafter be a party
to the French Guaranty (as such term is defined in the Credit Agreement) and
(d) each other entity that is now or may hereafter be a party to the Japanese
Guaranty (as such term is defined in the Credit Agreement);

 

“Receiver”
means a receiver or receiver and manager of the Chargor appointed by the
Collateral Agent under this Share Charge.

 

“Secured
Obligations” means (a) all principal, interest, premium, fees,
reimbursements, indemnifications, and other amounts how or hereafter owed by
the Obligors under the Credit Agreement and the other Loan Documents and all
present and future obligations and liabilities of any kind (whether actual or
contingent and whether owed jointly or severally or in any other capacity
whatsoever); (b) all amounts, obligations, or liabilities of any kind now
or hereafter owed by the Chargor under this Share Charge and the other Loan Documents;
and (c) any increases, extensions, renewals, replacements, and
rearrangements of the foregoing obligations under any amendments, supplements,
restatements, replacements and other modifications of the agreements creating
the foregoing obligations, in each case, whether direct or indirect, absolute
or contingent.

 

“Securities”
means all stocks, shares, bonds and securities of any kind in the Company
(marketable or otherwise) negotiable instruments and warrants, whether
registered in the name of, or beneficially owned by, the Chargor:

 

(a)                                  which
are listed or described in the Schedule; or

 

2

 

(b)                                 which
are registered in the name of or shall be transferred into the name of the
Collateral Agent (or any nominee or agent for the Collateral Agent) or held or
to be held to the order of the Collateral Agent (whether for safe custody,
collection, security or otherwise); or

 

(c)                                  which
may after the date hereof be registered in the name of, or beneficially owned
by, the Chargor

 

and in each
such case includes all dividends, interest or other distributions payable
thereon and all allotments, accretions, offers, rights, bonuses, benefits and
advantages whatsoever (whether by way of conversion, redemption, preference,
option or otherwise) which accrue, are offered or arise in respect thereof.

 

1.4                                 In
this Share Charge (unless otherwise provided):

 

(a)                                  references
to Clauses and the Schedule are to be construed as references to the Clauses
of, and the Schedule to, this Share Charge as amended or varied from time to
time and references to sub Clauses shall unless otherwise specifically stated
be construed as references to the sub Clauses of the Clause in which the
reference appears;

 

(b)                                 references
to the Credit Agreement, or to any other document or agreement are to be
construed as references to the Credit Agreement, or such other document or
agreement as is in force for the time being and as amended, varied, novated or
supplemented, as the case may be, from time to time;

 

(c)                                  words
importing the singular shall include the plural and vice versa;

 

(d)                                 references
to a person shall be construed so as to include that person’s assigns or
transferees or successors in title and shall be construed as including
references to an individual, firm, partnership, joint venture, company,
corporation, unincorporated body of persons or any state or any agency thereof;

 

(e)                                  references
to any statute or statutory provision include any statute or statutory
provision which amends; extends, consolidates or replaces the same; or which
has been amended, extended, consolidated or replaced by the same, and shall
include any orders, regulations, instruments or other subordinate legislation
made under the relevant statute;

 

(f)                                    references
to liability or liabilities are to be construed to include all liabilities and
obligations whether actual, contingent, present or future and whether incurred
solely or jointly or as principal or surety;

 

(g)                                 the
words “other” and “otherwise” shall not be construed ejusdem generis with any foregoing
words where a wider construction is possible; and

 

3

 

(h)                                 the
words “including” and “in particular” shall be construed as being by way of
illustration or emphasis only and shall not be construed as, nor shall they
take effect as, limiting the generality of any foregoing words.

 

2.                                       COVENANT
TO PAY

 

The Chargor
covenants with the Collateral Agent (acting for the benefit of itself and the
Beneficiaries pursuant to the provisions of the Credit Agreement) that it will
on demand pay and discharge each of the Secured Obligations when due to the
Collateral Agent PROVIDED THAT the liability of the Chargor hereunder shall be
limited to the amount realised by the disposal of the Securities and other
amounts payable by the Chargor under this Share Charge.

 

3.                                       CHARGE

 

The Chargor
hereby charges with full title guarantee the Securities by way of first fixed
charge to the Collateral Agent (acting as agent for the benefit of itself and
the Beneficiaries pursuant to the provisions of the Credit Agreement) as a
continuing security to secure the payment and performance of the Secured
Obligations.

 

The Collateral
Agent is hereby authorised to arrange at any time during the occurrence and
continuance of an Event of Default under the Credit Agreement or any Loan
Document for any of the Securities to be registered in the name of the
Collateral Agent (or its nominee) and the Collateral Agent will use its best
endeavours to notify the Chargor of any such registration.

 

4.                                       COVENANTS
BY THE CHARGOR

 

4.1                                 The
Chargor hereby covenants with the Collateral Agent, for the benefit of itself
and the other Beneficiaries, that during the continuance of this security the
Chargor will:

 

(a)                                  deposit
with the Collateral Agent (unless the Collateral Agent shall otherwise agree)
only Securities which are fully paid and which it has a good right to deposit
and transfer free from any option, lien, charge or encumbrance of any kind and
in respect of which it shall lodge:

 

(i)                                     all
stock and share certificates and documents of title;

 

(ii)                                  executed
undated transfers of the Securities completed in blank or duly executed and
dated transfers in favour of the Collateral Agent (as agent and trustee for the
Beneficiaries) or its nominee or agent as the Collateral Agent may direct; and

 

(iii)                             such
other documents as the Collateral Agent may from time to time require for
perfecting the title of the Beneficiaries to the Securities including any bonus
or rights issue (duly executed by or signed on behalf of the registered holder)
or for vesting or enabling the Chargor to vest the same in the Collateral Agent
or its nominees or in any purchaser to the

 

4

 

intent that the Collateral Agent may at any tune without notice present
them for registration;

 

(b)                                 duly
and promptly pay all calls, installments or other payments which may be made or
become due in respect of any of the Securities as and when the same from time
to time become due (and if the Chargor does not do so, the Collateral Agent may
make such payments on behalf of the Chargor, in which event any sums so paid
shall be reimbursed on demand by the Chargor to the Collateral Agent);

 

(c)                                  comply
promptly with any notice served on it under the Companies Act 1985 or 2006;

 

(d)                                 not
(without the prior consent in writing of the Collateral Agent or except as
provided herein):

 

(i)                                     permit
any person other than the Chargor or the Collateral Agent (or its nominee or
agent) to be registered as holder of the Securities or any part thereof; or

 

(ii)                                  create
or purport to create or permit to subsist any mortgage, charge, lien or
encumbrance (other than in favour of the Collateral Agent or as permitted under
the Credit Agreement) on or over the Securities or any part thereof or interest
therein; or

 

(iii)                             sell,
transfer, grant any option over or otherwise dispose of the Securities or any
part thereof or interest therein or attempt or-agree so to do;

 

(e)                                  not
do or cause or permit to be done anything which may in any way depreciate,
jeopardise or otherwise prejudice the value to the Beneficiaries of the
Securities.

 

4.2                                 The
Chargor hereby farther covenants and agrees with the Beneficiaries that:

 

(a)                                  the
Collateral Agent and its nominees at the discretion of the Collateral Agent may
exercise in the name of the Chargor or otherwise at any time whether before or
after demand for payment and without any further consent or authority on the
part of the Chargor in respect of the Securities any voting rights and any
powers or rights which may be exercisable by the person in whose name the
Securities are registered or by the bearer thereof; but such power shall be
exercised subject to the provisions of Clause 5;

 

(b)                                 the
Chargor will, if so requested by the Collateral Agent, transfer all or any of the
Securities to the Collateral Agent or to such nominees wheresoever situate or
agents as the Collateral Agent may select and that the Collateral Agent may hold
all or any of such Securities in any branch of the Collateral Agent or with any
correspondents or other agents whether in the United Kingdom or overseas;

 

5

 

(c)                                  subject
to Clause 8.7 the Chargor shall provide to the Collateral Agent a copy of any
report, accounts, circular or notice received in respect of or in connection
with any of the Securities promptly following the receipt thereof by the
Chargor.

 

5.                                       DIVIDENDS
AND VOTING RIGHTS

 

Without
prejudice to any other provision in this Share Charge (other than Clause 4.2),
the Collateral Agent hereby agrees with the Chargor that until it shall have
made demand for payment on the Borrowers under the Credit Agreement for any of
the Secured Obligations or until the occurrence of an Event of Default has
occurred and which is continuing under the Credit Agreement or any of the Loan Documents:

 

(a)                                  the
Chargor will hold all dividends paid on and received by it in respect of the
Securities; and

 

(b)                                 the
Chargor will exercise all voting and other rights and powers attached to the
Securities.

 

6.                                       REPRESENTATIONS
AND WARRANTIES BY THE CHARGOR

 

The Chargor
represents and warrants to the Collateral Agent, for the benefit of itself and
the Beneficiaries, and undertakes that:

 

(a)                                  the
Company is duly incorporated and validly existing under the law of England and
Wales;

 

(b)                                 subject
to and as permitted by the Credit Agreement, the Chargor is the sole, absolute
and; beneficial owner of the Securities, that no person save the
Chargor has any right or interest of any sort whatsoever in or to the
Securities and that there are no agreements or arrangements (including any
restrictions on transfer) affecting the Securities in any way or which would or
might in any way fetter or otherwise prejudice the rights of the Chargor or any
mortgagee of the Securities;

 

(c)                                  the
Securities are duly authorised, validly issued and fully paid and are and will
at all times be free from any restriction on transfer and there are no moneys
or liabilities outstanding in respect of any of the Securities;

 

(d)                                 this
Share Charge constitutes its legal, valid, binding and enforceable obligations
and is a security over all and every part of the Securities effective in
accordance with its terms (subject to laws affecting the rights of creditors
generally);

 

(e)                                  this
Share Charge does not and will not conflict with or result in any breach or
constitute a default under any agreement, instrument or obligation to which the
Company or Chargor is a party or by which it is bound; and

 

(f)                                    all
necessary authorisations and consents to enable or entitle it to enter into
this Share Charge have been obtained and will remain in full force and effect
at all times during the subsistence of the security constituted by this Share
Charge.

 

6

 

7.                                       FURTHER
ASSURANCE

 

The Chargor
shall at any time, if and when required by the Collateral Agent, execute such
further legal or other charges or assignments in favour of the Collateral Agent
as the Collateral Agent shall from time to time reasonably require over all or
any of the Securities and all rights relating thereto both present and future
(including any bonus or substituted securities) and such other transfers or
documents as the Collateral Agent may from time to time reasonably require for
perfecting its title to the same or for vesting or enabling it to vest the same
in itself or its nominees or in any purchaser as the Collateral Agent deems
necessary or desirable to secure the Secured Obligations or to facilitate the
realisation of the Securities or the exercise of the powers conferred on the
Collateral Agent; such further charges or assignments to be prepared by or on
behalf of the Collateral Agent at die cost of the Chargor and to contain an
immediate power of sale without notice, a clause excluding section 93 and the
restrictions contained in section 103 of the Law of Property Act 1925 and such
other clauses for the benefit of the Beneficiaries as the Collateral Agent may
reasonably require.

 

8.                                       POWERS
OF THE COLLATERAL AGENT

 

8.1                                 At
any time after the Collateral Agent shall have demanded payment of any of the
Secured Obligations in accordance with the terms of the Loan Documents:

 

(a)                                  the
Collateral Agent and any nominee of the Collateral Agent wheresoever situate
may without further notice and without the restrictions contained in section
103 of the Law of Property Act 1925 in respect of all or any of the Securities
exercise all the powers or rights (including voting rights) which may be
exercisable by the registered holder of the Securities and all other powers
conferred on mortgagees by the Law of Property Act 1925 as hereby varied or
extended; and

 

(b)                                 any
dividends, interest or other payments which may be received or receivable by
the Collateral Agent or by any nominee in respect of any of the Securities may
be applied by the Collateral Agent as though they were proceeds of sale.

 

8.2                                 Section
93 of the Law of Property Act 1925 shall not apply to this security or to any
security given to the Collateral Agent or the Beneficiaries pursuant hereto.

 

8.3                                 In
exercising the powers referred to in Clause 8.1, the Securities or any part
thereof may be sold or disposed of at such times in such manner and generally
on such terms and conditions and for such consideration as the Collateral Agent
may think fit. Any such sale or disposition may be for cash, debentures or
other obligations, shares, stock, securities or other valuable consideration
and be payable immediately or by installments spread over such period as the
Collateral Agent shall think fit. No purchaser or other person shall be bound or
concerned to see or enquire whether the right of the Collateral Agent to
exercise any of the powers hereby conferred has arisen or not or be concerned
with notice to the contrary or with the propriety of the exercise or purported
exercise of such powers.

 

7

 

8.4                                 All
money received by the Collateral Agent in the exercise of any powers conferred
by this Share Charge shall be applied, after payment of all costs and expenses
incurred in the exercise of such power and after the discharge of all
liabilities having priority thereto, in or towards satisfaction of the Secured
Obligations in such order as the Collateral Agent in its absolute discretion
may from time to time determine.

 

8.5                                 The
Collateral Agent shall not be liable to account as mortgagee in possession in
respect of all or any of the Securities and shall not be liable for any loss
upon realisation or for any neglect or default to present any interest coupon
or any bond or stock drawn for repayment or for any failure to pay any call or installment
or to accept any offer or to notify the Chargor of any such matter or for any
negligence or default by its nominees, correspondents or agents or for any
other loss of any nature whatsoever in connection with me Securities other than
any caused by the Collateral Agent’s gross negligence or willful default.

 

8.6                                 The
Chargor hereby agrees fully to indemnify and hold harmless the Collateral Agent
and the other Beneficiaries from and against all losses, actions, claims,
expenses, demands and liabilities whether in contract, tort or otherwise:

 

(a)                                  in
respect of calls or other payments relating to the Securities now of hereafter
incurred by the Collateral Agent or any other Beneficiary (or any nominee or
agent of any of them) or by any officer or employee for whose liability, act or
omission it may be answerable; and

 

(b)                                 occasioned
by any breach by the Chargor of any of its covenants or other obligations to
the Collateral Agent or any other of the Beneficiaries under this Share Charge.

 

The Chargor
shall indemnify the Collateral Agent and the other Beneficiaries on demand and
shall pay interest on the sums demanded from the date of demand to the date of
actual payment at the Default Rate, as such term is defined in Section 2.6(b)
of the Credit Agreement (both before and after judgment).

 

8.7                                 Neither
the Collateral Agent nor any other Beneficiary shall have any liability or
responsibility to the Chargor for any action taken or omitted to be taken by
the Collateral Agent in relation to the Securities (including any Securities
which are at any time registered in the name of the Collateral Agent (or any
nominee or agent for the Collateral Agent)). In particular, the Collateral
Agent shall have no liability as a result of any failure to forward to the
Chargor any report, circular or other communication received by the Collateral
Agent in relation to any Securities or to accept or decline any offer made in
respect of any Securities or to make any payment in relation to any Securities.

 

9.                                       RECEIVER

 

9.1                                 At
any time after this security becomes enforceable the Collateral Agent may
without further notice appoint any one or more qualified persons to be a
receiver or receiver and manager (each a “Receiver”)
of all or any part of the Securities in like manner in every respect as if the
Collateral Agent had become entitled under the Law of Property Act

 

8

 

1925 to exercise the power of sale thereby
conferred. In this Clause “qualified person” means a person who, under the
Insolvency Act 1986, is qualified to act as a receiver of the property of any
company with respect to which he is appointed.

 

9.2                                 Every
Receiver appointed in accordance with Clause 9.1 shall have and be entitled to
exercise all powers conferred by the Law of Property Act 1925 as if such
Receiver has been duly appointed thereunder together with all powers conferred
on receivers under the Insolvency Act 1986. Additionally, each Receiver shall
have power to do all such other acts and things as he may consider desirable or
necessary for realising the Securities or any part thereof or incidental or
conducive to any of the matters, powers or authorities conferred on a Receiver
under or by virtue of this Share Charge and to exercise in relation to the
Securities or any part thereof all such powers, authorities and things as he
would be capable of exercising if he were, the absolute beneficial owner of the
same and to use the name of the Chargor for all or any of the purposes
aforesaid.

 

9.3                                 Any
Receiver appointed pursuant to this Share Charge shall be the agent of the
Chargor (and notwithstanding the liquidation of such Chargor, any Receiver
shall not he the agent of the; Collateral Agent) and shall as such agent be
deemed to be in the same position as a receiver appointed by a mortgagee under
the Law of Property Act 1925. The Chargor shall be solely liable for such
Receiver’s costs, defaults and remuneration and shall be liable on any
contracts and engagements made or entered into by such Receiver, except the
Collateral Agent may from time to time remove any Receiver appointed by it and
may whenever it may deem it expedient appoint another qualified person as a new
receiver in the place of any Receiver whose appointment may for any reason have
terminated and may from time to time fix the remuneration of any Receiver
appointed by it.

 

9.4                                 All
or any of the powers, authorities and discretions which are conferred by this Share
Charge (either expressly or impliedly) upon a Receiver of the Securities may be
exercised after the security hereby created becomes enforceable by the Collateral
Agent in relation to the whole of the Securities or any part thereof without
first appointing a Receiver thereof or notwithstanding the appointment of a
Receiver thereof.

 

10.                                 CONTINUING
SECURITY AND PROTECTIVE PROVISIONS

 

10.1                           The
security constituted by this Share Charge shall be continuing and shall not be
considered as satisfied or discharged by any intermediate payment or settlement
of the whole or any part of the Secured Obligations or any other matter or
thing whatsoever and shall be binding until all the Secured Obligations have
been unconditionally and irrevocably paid and discharged in full. In particular
this Share Charge shall not be reduced, discharged or otherwise adversely
affected by:

 

(a)                                  any
variation, extension, compromise, discharge, dealing with, exchange or renewal
of any right or remedy which the Collateral Agent or any other Beneficiary may
now or hereafter have against the Obligors or any other person in respect of
the Secured Obligations;

 

9

 

(b)                                 any
act or omission by the Collateral Agent or any other Beneficiary or any other
person in taking up, perfecting or enforcing or the non-enforcement of any
security or guarantee from or against the Obligors or any other person;

 

(c)                                  any
termination, amendment, variation, novation or supplement of or to any of the
Secured Obligations;

 

(d)                                 any
grant of time, indulgence, waiver or concession to the Obligors or any other
person;

 

(e)                                  any
change in the constitution, name and style of the Obligors or any other person;

 

(f)                                    any
invalidity, illegality, unenforceability, irregularity, frustration or
discharge by operation of law of any actual or purported liability of, or any
security held from, the Obligors or any other person in connection with the
Secured Obligations;

 

(g)                                 any
act or omission which would not have discharged or affected any of the liabilities
of the Chargor had it been a principal debtor or by anything done or omitted by
any person which, but for this provision, might operate to exonerate or
discharge the Chargor or otherwise reduce or extinguish any of its liabilities
under this Share Charge.

 

10.2                           The
Chargor shall not at any time (while any of the Secured Obligations are
outstanding) take any security or other right or benefit from or exercise any
right against the Obligors, a guarantor or any other person in connection with
the liability of, or any payment made by, the Chargor under or pursuant to this
Share Charge.

 

10.3                           If the
Chargor shall be in breach of Clause 10.2 any security or other right or
benefit obtained from any Borrower or any other person shall be held upon trust
to transfer or pay the same to the Collateral Agent to the extent necessary to
satisfy any liability of the Chargor hereunder.

 

11.                                 NEW
ACCOUNTS, SUSPENSE ACCOUNTS, NON-MERGER

 

11.1                           If the
Collateral Agent or any other Beneficiary receives notice (whether actual or
otherwise) of any subsequent mortgage or charge affecting all or any part of
the Securities the Collateral Agent may open a new account or accounts with the
Obligors and, if it does not open a new account, it shall nevertheless be
treated as if it had done so at the time when the Collateral Agent or the other
Beneficiary received or was deemed to have received notice and as from that
time all payments made by the Obligors to the Collateral Agent or other
Beneficiary shall be credited or be treated as having been credited to the new
account and shall not operate to reduce the amount secured by this Share Charge
at the time when the Collateral Agent or the other Beneficiary received or was
deemed to have received such notice.

 

11.2                           All
moneys received, recovered or realised by the Collateral Agent under this Share
Charge (including the proceeds of any conversion of currency) may in the
discretion of

 

10

 

the Collateral Agent be credited to any
suspense or impersonal account held with the Collateral Agent and may be held
in such account for so long as the Collateral Agent may think fit. The Charger
shall not be concerned with, and shall have no right in respect of, the
application by the Collateral Agent of any sums received, recovered or realised
by the Collateral Agent under this Share Charge.

 

11.3                           This
Share Charge is in addition to and shall not merge with or otherwise prejudice
or affect any banker’s lien, right to combine and consolidate accounts, right
of set off or any other contractual or other right or remedy or any guarantee,
lien, pledge, bill, note, mortgage or other security now or hereafter held by
or available to the Beneficiaries.

 

12.                                 POWER
OF ATTORNEY

 

12.1                           The
Chargor hereby irrevocably appoints the following, namely:

 

(a)                                  the
Collateral Agent; and

 

(b)                                 each
and every person to whom the Collateral Agent shall from time to time have
delegated the exercise of the power of attorney conferred by this Clause 12;

 

jointly and
also severally to be its attorney or attorneys and in its name and otherwise on
its behalf to sign, seal, execute, deliver, perfect and do all deeds,
instruments, documents, acts and things which may be required (or which the
Collateral Agent shall consider requisite) for carrying out any obligation
imposed on the Chargor by or pursuant to this Share Charge, for carrying any
sale or other dealing by the Collateral Agent or any other Beneficiary into
effect, for getting in the Securities, and generally for enabling the
Collateral Agent to exercise the powers conferred on it by or pursuant to this
Share Charge or by law. The Collateral Agent shall have full power to delegate
the power conferred on it by this Clause 12.1, but no such delegation shall
preclude the subsequent exercise of such power by the Collateral Agent itself
or preclude the Collateral Agent from making a subsequent delegation thereof to
some other person and any such delegation may be revoked by the Collateral
Agent at any time.

 

12.2                           The
power of attorney hereby granted is as regards the Collateral Agent and its
delegates (and as the Chargor hereby acknowledges) granted irrevocably and for
value as part of the security constituted by this Share Charge to secure
proprietary interests in and the performance of obligations owed to the
respective donees within the meaning of the Powers of Attorney Act 1971.

 

12.3                           The
Chargor agrees to ratify and confirm anything such attorney shall lawfully and
properly do or purport to do by virtue of Clause 12.1 and all money expended by
any such attorney shall be deemed to be expenses incurred by the Collateral
Agent under this Share Charge.

 

13.                                 DISCHARGE
CONDITIONAL

 

13.1                           Any
release, discharge or settlement between the Chargor and the Collateral Agent
in relation to this Share Charge shall be conditional upon no disposition or
payment to the

 

11

 

Collateral Agent or any other Beneficiary by
any Borrower or any other person being avoided, set aside or ordered to be
refunded pursuant to any law relating to insolvency or for any other reason.

 

13.2                           If any
such disposition or payment is avoided, set aside or ordered to be refunded,
the Collateral Agent shall be entitled to enforce this Share Charge against the
Chargor as if such release, discharge or settlement had not occurred and any
such disposition or payment had not been made.

 

14.                                 DISCHARGE
OF SECURITY

 

14.1                           Termination

 

This Share
Charge and the security interest created hereby shall terminate when all the
Secured Obligations have been indefeasibly paid in full in cash, at which time
the Beneficiaries shall direct the Collateral Agent to execute and deliver to
the Chargor or the Chargor’s designee, at the relevant Chargor’s expense, all
documents which such Chargor shall reasonably request from time to time to
evidence such termination. Any execution and delivery of termination documents
pursuant to this Clause 14 shall be without recourse to or warranty by the
Collateral Agent or the Beneficiaries.

 

14.2                           Release

 

If any of the
Securities shall be sold, transferred or otherwise disposed of by a Chargor in
a transaction permitted by the Loan Documents, the security interest created
hereby in any Securities that is so sold, transferred or otherwise disposed of
shall automatically terminate and be released upon the closing of such sale,
transfer or other disposition, and such Securities shall be sold free and clear
of the lien and security interest created hereby; provided, however, that such
security interest will continue to attach to all proceeds of such sales or
other dispositions. In connection with any of the foregoing, the Beneficiaries
shall direct the Collateral Agent to execute and deliver to the Chargor or the
Chargor’s designee, at the Chargor’s expense, all documents that the Chargor
shall reasonably request from time to time to evidence such termination. Any
execution and delivery of termination documents pursuant to this Clause 14
shall be without recourse to or warranty by the Collateral Agent or the
Beneficiaries.

 

14.3                           Upon
any release of the Securities neither the Collateral Agent nor any of the other
Beneficiaries nor their nominees or agents (as the case may be) shall be bound
to release or transfer to the Chargor the identical stocks, shares or
securities which were deposited with or transferred to it or them and the
Chargor shall accept shares and securities of the same class and denomination
or such other securities as then represent the Securities.

 

15.                                 CURRENCY

 

15.1                           All
moneys received or held by the Collateral Agent or any other Beneficiary under
this Share Charge may from time to time after demand has been made by the
Collateral Agent or ah Event of Default has occurred be converted into such
other currency as the Collateral Agent considers necessary or desirable to
cover the Secured Obligations in the

 

12

 

currency thereof at the then prevailing spot
rate of exchange of the Collateral Agent (as reasonably determined by the
Collateral Agent) for purchasing that other currency with the existing
currency.

 

15.2                           No
payment to the Collateral Agent or any other Beneficiary (whether under any
judgment or court order or otherwise) shall discharge the obligation or
liability of the Chargor in respect of which it was made unless and until the
Collateral Agent or such other Beneficiary shall have received payment in full
in the currency in which such obligation or liability was incurred and, to the
extent that the amount of any such payment shall on actual conversion into such
currency fall short of such obligation or liability actual or contingent
expressed in that currency, the Collateral Agent or such other Beneficiary
shall have a further separate cause of action against the Chargor and shall be
entitled to enforce this Share Charge to recover the amount of the shortfall.

 

16.                                 COSTS

 

The Chargor
shall on demand pay to the Collateral Agent the amount of all reasonable costs
and expenses and other liabilities (including reasonable legal and out of
pocket expenses and any Value Added Tax on such costs and expenses) which the
Collateral Agent or any other Beneficiary incurs in connection with:

 

(a)                                  the
preparation, negotiation, execution and delivery of this Share Charge;

 

(b)                                 any
stamping or payment of stamp duty reserve tax or registration of this Share
Charge or any transfer of the Securities pursuant hereto;

 

(c)                                  any
actual or proposed amendment or waiver or consent under or in connection with
this Share Charge;

 

(d)                                 any
discharge or release of this Share Charge;

 

(e)                                  the
preservation or exercise (or attempted preservation or exercise) of any rights
under or in connection with and the enforcement (or attempted enforcement) of
this Share Charge; or

 

(f)                                    dealing
with or obtaining advice about any other matter or question arising out of or
in connection with this Share Charge;

 

together with
interest thereon at the Default Rate from the date of demand (or if earlier the
date of payment by the Collateral Agent or such other Beneficiary) until the
date of payment by the Chargor whether before or after judgment.

 

17.                                 ASSIGNMENT

 

The
Beneficiaries may assign or otherwise transfer the whole or any part of the
benefit of this Share Charge to any person to whom all or any part of its
rights, benefits and obligations under the Credit Agreement are assigned or
transferred in accordance with the provisions of the Credit Agreement and the
expression “the Beneficiaries” wherever used

 

13

 

herein shall
be deemed to include the assignees and other successors, whether immediate or derivative,
of any Beneficiary, who shall be entitled to enforce and proceed upon this
Share Charge in the same manner as if named herein. The Beneficiaries shall be
entitled to disclose (on a confidential basis) any information concerning the Chargor
to any such assignee or other successor or any participant or proposed
assignee, successor or participant. The Chargor may not assign or transfer all
or any part of its rights and/or obligations under this Share Charge.

 

18.                                 NOTICES

 

18.1                           Without
prejudice to any other method of service of notices and communications provided
by law, a demand or notice under this Share Charge shall be in writing signed
by an officer or agent of the Collateral Agent and may be served on the Chargor
by hand, by post or by facsimile transmission. Any such notice or communication
shall be sent to the address or number of the Chargor as set out below:

 

EMRISE Electronics
Corporation

9654 Hermosa Avenue

Rancho Cucamonga, CA 91730

USA

Attn: D. John Donovan

 

With a copy to:

 

Rutan & Tucker, LLP

611 Anton Blvd., Suite 1400

Costa Mesa, CA 92626

Attn: Larry A. Cerutti, Esq.

Fax No.: (714) 546-9035

 

18.2                           Any
such notice or communication given by the Collateral Agent or any other
Beneficiary shall be deemed to have been received:

 

(a)                                  if
sent by facsimile transmission, with a confirmed receipt of transmission from
the receiving machine, on the Business Day on which transmitted or the
following Business Day if transmitted after the normal business hours of the
Chargor;

 

(b)                                 in
the case of a written notice lodged by hand, on the Business Day of actual
delivery or the following Business Day if delivered after the normal business
hours of the Chargor; and

 

(c)                                  if
posted, on the second Business Day following the day on which it was properly dispatched
by first class mail postage prepaid.

 

18.3                           Any
notice given to the Collateral Agent or any other Beneficiary shall be deemed
to have been given only on actual receipt.

 

14

 

19.                                 MISCELLANEOUS

 

19.1                           All
sums payable by the Chargor under this Share Charge shall be paid without any
set off, counterclaim, withholding or deduction whatsoever unless required by
law in which event the Chargor will, simultaneously with making the relevant
payment under this Share Charge, pay to the Collateral Agent such additional
amount as will result in the receipt by the Collateral Agent of the full amount
which would otherwise have been receivable and will supply the Collateral Agent
promptly with evidence satisfactory to the Collateral Agent that the Chargor
has accounted to the relevant authority for the sum withheld or deducted.

 

19.2                           No
delay or omission on the part of the Collateral Agent in exercising any right
or remedy under this Share Charge shall impair that right or remedy or operate
as or be taken to be a waiver of it nor shall any single, partial or defective
exercise of any such right or remedy preclude any other or further exercise
under this Share Charge of that or any other right or remedy.

 

19.3                           The
rights of the Beneficiaries under this Share Charge are cumulative and not
exclusive of any rights provided by law and may be exercised from time to time
and as often as the Collateral Agent deems expedient.

 

19.4                           Any
waiver by the Collateral Agent or any other Beneficiary of any terms of this
Share Charge or any consent or approval given by any of them under it shall be
effective only if given in writing and then only for the purpose and upon the
terms and conditions (if any) on which it is given.

 

19.5                           If at
any time any one or more of the provisions of this Share Charge is or becomes
illegal, invalid or unenforceable in any respect under any law of any
jurisdiction neither the legality, validity or enforceability of the remaining
provisions of this Share Charge 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.

 

19.6                           Any
statement, certificate or determination of the Collateral Agent as to the
amount of the Secured Obligations or (without limitation) any other matter
provided for in this Share Charge shall in the absence of manifest error be
conclusive and binding on the Chargor.

 

20.                                 LAW
AND JURISDICTION

 

20.1                           This
Share Charge is governed by and shall be construed in accordance with English
law.

 

20.2                           The
Chargor irrevocably agrees for the exclusive benefit of the Beneficiaries that
the courts of England shall have jurisdiction to hear and determine any suit,
action or proceeding and to settle any dispute which may arise out of or in
connection with this Share Charge and for such, purposes irrevocably submits to
the jurisdiction of such courts.

 

15

 

20.3                           Nothing
contained in this Clause shall limit the right of the Collateral Agent or other
Beneficiary to take proceedings against the Chargor in any other court of
competent jurisdiction (including without limitation and for the avoidance of
doubt, in accordance with the terms of the Credit Agreement) nor shall the
taking of any such proceedings in one or more jurisdictions preclude the taking
of proceedings in any other jurisdiction whether concurrently or not (unless
precluded by applicable law).

 

20.4                           The
Chargor irrevocably waives any objection which it may have now or in the future
to the courts of England being nominated for the purpose of this Clause on the
ground of venue or otherwise and agrees not to claim that any such court is not
a convenient or appropriate forum.

 

20.5                           The
Chargor irrevocably and unconditionally authorises and appoints EMRISE Electronics
Ltd. of Brunswick Road, Cobbs Wood, Ashford, Kent TN23 1EH, United Kingdom (or
such other company with a registered office in England as it may from time to
time substitute by not less than fifteen days written notice to the Collateral
Agent) to accept service of all legal process arising out of or connected with
this Share Charge and service on such person (or substitute) shall be deemed to
be service on the Chargor. Except upon such a substitution the Chargor shall
not revoke any such authority or appointment and shall at all times maintain an
agent for service of process in England and if any such, agent ceases for any
reason to be an agent for this purpose shall forthwith appoint another agent
and advise the Collateral Agent accordingly.

 

IN WITNESS
whereof the Chargor has executed this Share Charge as a deed with the intention
that it be delivered on the day and year first before written.

 

16

 

SCHEDULE

 

	
  Number of shares or

  amount of stock

  	
   

  	
  Description of stocks,

  shares, or other securities

  
	
   

  	
   

  	
   

  
	
  58,668

  	
   

  	
  Ordinary shares of £1 each in EMRISE Electronics Ltd. a company
  registered in England and Wales (Registered No. 1969006)

  

 

17

 

IN WITNESS
WHEREOF the Chargor has executed this Share Charge as a deed with the intention
that it be delivered on the day and year first before written

 

	
  EXECUTED as a Deed on behalf of

  	
  )

  	
   

  
	
  EMRISE Electronics Corporation, a company

  	
  )

  	
   

  
	
  incorporated in the State of New Jersey by

  	
  )

  	
   

  
	
  Carmine Oliva being a person

  	
  )

  	
  /s/ Carmine Oliva

  
	
  who in accordance with the laws of that

  	
  )

  	
   

  
	
  territory, is acting under the authority

  	
  )

  	
   

  
	
  of President & Chief Executive Officer

  	
  )

  	
   

  

 

 

	
   

  	
  )

  	
  /s/ Robert J. Anderson

  	
   

  
	
   

  	
   

  	
  Robert J. Anderson

  
	
   

  	
   

  	
  Authorized Signatory

  
	
   

  	
   

  	
   

  
	
  SIGNED for and on behalf of

  	
  )

  	
  /s/ Peter Paul Mendel

  	
   

  
	
  GVEC RESOURCE IV INC. in its capacity

  	
  )

  	
  Peter Paul Mendel

  
	
  as Collateral Agent

  	
  )

  	
  Authorized SignatoryEXHIBIT 10.14

 

GUARANTY

 

THIS GUARANTY (this “Guaranty”) is executed as
of November 30, 2007, by CXR Anderson Jacobson SAS (the “Guarantor”),
for the benefit of GVEC Resource
IV Inc., as Arranger and Agent (the “Agent”) and the Lenders (as
defined below). All capitalized terms used but not otherwise defined herein
shall have the meanings ascribed to such terms in the Credit Agreement (as
herein defined).

 

RECITALS:

 

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

 

B.            The Guarantor is a wholly owned subsidiary of the Parent
and, as such, will benefit by virtue of the financial accommodations extended
to the Parent by the Lenders.

 

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

 

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

 

ARTICLE I

NATURE AND SCOPE OF GUARANTY

 

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

 

Section 1.2.            Nature
of Guaranty. This Guaranty is an irrevocable, absolute, continuing guaranty
of payment and not a guaranty of collection. This Guaranty may not be revoked
by the Guarantor and shall continue to be effective with respect to any
Guaranteed Obligations arising or created after any attempted revocation by the
Guarantor. The fact that at any time or from time to time the Guaranteed
Obligations may be increased or reduced shall not release or

 

 

discharge the obligation of the Guarantor to the Agent
or any Lender with respect to the Guaranteed Obligations. This Guaranty may be
enforced by the Agent and any permitted assignee of the Agent and shall not be
discharged by the assignment or negotiation of all or part of the Agent’s or
any Lender’s rights under the Credit Agreement.

 

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

 

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

 

Section 1.5.            Waivers.

 

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

 

2

 

 with this
Guaranty, the Loan Documents, any documents or agreements evidencing, securing
or relating to any of the Guaranteed Obligations and/or the obligations hereby
guaranteed.

 

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

 

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

 

3

 

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

 

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

 

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

 

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

 

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

 

Section 1.9.            Limitations
on the Guaranty by the Guarantor.

 

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

 

4

 

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

 

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

 

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

 

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

 

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

 

ARTICLE II

EVENTS AND CIRCUMSTANCES NOT REDUCING OR 

DISCHARGING GUARANTOR’S OBLIGATIONS

 

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

 

Section 2.1.            Modifications.
Any renewal, extension, increase, modification, alteration or rearrangement of
all or any part of the Guaranteed Obligations, the Credit Agreement, the

 

5

 

other Loan Documents, or any other document,
instrument, contract or understanding between the Borrowers and the Agent or
any Lender, or any other parties, pertaining to the Guaranteed Obligations or
any failure of the Agent to notify the Guarantor of any such action.

 

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

 

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

 

Section 2.4.            Invalidity
of Guaranteed Obligations. The invalidity, illegality or unenforceability
of all or any part of the Guaranteed Obligations, or any document or agreement
executed in connection with the Guaranteed Obligations, for any reason
whatsoever, including without limitation the fact that (a) the Guaranteed
Obligations, or any part thereof, exceed the amount permitted by law, (b) the
act of creating the Guaranteed Obligations or any part thereof is ultra vires,
(c) the officers or representatives executing the Credit Agreement or the
other Loan Documents or otherwise creating the Guaranteed Obligations acted in
excess of their authority, (d) the Guaranteed Obligations violate
applicable usury laws, (e) any Borrower has valid defenses, claims or offsets
(whether at law, in equity or by agreement) (other than a defense based upon
the actual payment of the Guaranteed Obligations sought to be enforced), which
render the Guaranteed Obligations wholly or partially uncollectible from such Borrower,
(f) the creation, performance or repayment of the Guaranteed Obligations
(or the execution, delivery and performance of any document or instrument
representing part of the Guaranteed Obligations or executed in connection with
the Guaranteed Obligations, or given to secure the repayment of the Guaranteed
Obligations) is illegal, uncollectible or unenforceable, (g) the Credit
Agreement or any of the other Loan Documents have been forged or otherwise are
irregular or not genuine or authentic, (h) the failure of consideration
for the granting of this Guaranty, (i) the expiration of any statute of
limitations affecting the liability of the Guarantor hereunder, the liability
of any Borrower or any guarantor under the Loan Documents; it being agreed that
the Guarantor shall remain liable hereon regardless of whether any Borrower or
any other Person be found not liable on the Guaranteed Obligations or any part
thereof for any reason.

 

6

 

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

 

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

 

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

 

Section 2.8.            Care
and Diligence. The failure of the Agent or any Lender to diligently
exercise its rights and remedies under any of the Loan Documents, or to exercise
diligence or reasonable care in the preservation, protection, enforcement, sale
or other handling or treatment of all or any part of such collateral, property
or security, including but not limited to any neglect, delay, omission, failure
or refusal of the Agent or any Lender (a) to take or prosecute any action
for the collection of any of the Guaranteed Obligations or (b) to
foreclose, or initiate any action to foreclose, or, once commenced, prosecute
to completion any action to foreclose upon any security therefor, or (c) to
take or prosecute any action in connection with any instrument or agreement
evidencing or securing all or any part of the Guaranteed Obligations, (d) to
take any other acts or omissions of which vary, increase or decrease the risk
on the Guarantor, other than any loss, damage liability or cost arising from the
Agent’s or such Lender’s gross negligence or willful misconduct following the
Agent’s taking title to the Collateral.

 

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

 

Section 2.10.          Unenforceability.
The fact that any collateral, security, security interest or lien contemplated
or intended to be given, created or granted as security for the repayment of
the Guaranteed Obligations, or any part thereof, shall not be properly
perfected or created, or shall

 

7

 

prove to be unenforceable or subordinate to any other
security interest or lien, it being recognized and agreed by the Guarantor that
the Guarantor is not entering into this Guaranty in reliance on, or in
contemplation of the benefits of, the validity, enforceability, collectibility
or value of any of the collateral for the Guaranteed Obligations.

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES

 

To induce the Agent and the Lenders to enter into the
Loan Documents and extend credit to the Borrowers, the Guarantor represents and
warrants to the Agent and the Lenders as follows,

 

8

 

as of the date hereof,
and as of each date that the Lenders make a Term Loan or Advance to any
Borrower under the Credit Agreement:

 

Section 3.1.            Benefit.
The Guarantor is an Affiliate of the Parent and has received, or will receive,
direct or indirect benefit from the making of this Guaranty with respect to the
Guaranteed Obligations.

 

Section 3.2.            Familiarity
and Reliance. The Guarantor is familiar with, and has independently
reviewed books and records regarding, the financial condition of the Borrowers
and is familiar with the value of any and all collateral intended to be created
as security for the payment of the Loans or Guaranteed Obligations; however, the
Guarantor is not relying on such financial condition or the collateral as an
inducement to enter into this Guaranty.

 

Section 3.3.            No
Representations by the Agent and Lenders. None of the Agent, the Lenders,
nor any other party has made any representation, warranty or statement to the Guarantor
in order to induce the Guarantor to execute this Guaranty.

 

Section 3.4.            Guarantor’s
Financial Condition. As of the date hereof , and after giving effect to
this Guaranty and the contingent obligation evidenced hereby, the Guarantor is,
and will be, solvent, and has and will have assets which, fairly valued, exceed
its obligations, liabilities (including contingent liabilities) and debts, and
has and will have property and assets sufficient to satisfy and repay its
obligations and liabilities.

 

Section 3.5.            Legality.
This Guaranty has been duly authorized
by all necessary corporate action and the execution, delivery and
performance by the Guarantor of this Guaranty and the consummation of the
transactions contemplated hereunder do not, and will not, contravene or
conflict with any law, statute or regulation whatsoever to which the Guarantor
is subject or constitute a default (or an event which with notice or lapse of
time or both would constitute a default) under, or result in the breach of, any
indenture, mortgage, deed of trust, charge, lien, or any contract, agreement or
other instrument to which the Guarantor is a party or which may be applicable
to the Guarantor. This Guaranty is a legal and binding obligation of the Guarantor
and is enforceable in accordance with its terms, except as limited by
bankruptcy, insolvency or other laws of general application relating to the
enforcement of creditors’ rights.

 

Section 3.6.            Financial
Statements. Any and all balance sheets, net worth statements and other
financial data that have been given or may be given to the Agent with respect
to the Guarantor did or will, at the time of such delivery, fairly and
accurately present the financial condition of the Guarantor in all material
respects.

 

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

 

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

 

9

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE IV

 

SUBORDINATION OF CERTAIN INDEBTEDNESS

 

Section 4.1.            Subordination
of All Guarantor Claims. As used herein, the term “Guarantor Claims”
shall mean all debts and liabilities of the Borrowers to the Guarantor, whether
such debts and liabilities now exist or are hereafter incurred or arise, or
whether the obligations of the Borrowers thereon be direct, contingent,
primary, secondary, several, joint and several, or otherwise, and irrespective
of whether such debts or liabilities be evidenced by note, contract, open
account, or otherwise, and irrespective of the Person or Persons in whose favor
such debts or liabilities may, at their inception, have been, or may hereafter
be created, or the manner in which they have been or may hereafter be acquired
by the Guarantor. The Guarantor Claims shall include without limitation all
rights and claims of the Guarantor against the Borrowers (arising as a result
of subrogation or otherwise) as a result of the Guarantor’s payment of all or a
portion of the Guaranteed Obligations. Upon the occurrence of a Default or an
Event of Default, the Guarantor shall not receive or collect, directly or
indirectly, from any Borrower or any other party any amount upon the Guarantor
Claims.

 

Section 4.2.            Claims
in Bankruptcy. In the event that, pursuant to any insolvency, bankruptcy,
reorganization, receivership or other debtor relief law, or any judgment, order
or decision involving the Guarantor as debtor, the Agent shall have the right
to prove its claim in any such proceeding so as to establish its rights
hereunder and receive directly from the receiver, trustee or other court
custodian dividends and payments which would otherwise be payable upon

 

10

 

Guarantor Claims. The Guarantor hereby assigns such
dividends and payments to the Agent for the benefit of the Lenders. Should the
Agent receive, for application against the Guaranteed Obligations, any such
dividend or payment which is otherwise payable to the Guarantor, and which, as
between such Borrower and the Guarantor, shall constitute a credit against the
Guarantor Claims, then upon payment to the Agent in full of the Guaranteed
Obligations, the Guarantor shall become subrogated to the rights of the Agent
to the extent that such payments to the Agent on the Guarantor Claims have
contributed toward the liquidation of the Guaranteed Obligations, and such
subrogation shall be with respect to that proportion of the Guaranteed
Obligations which would have been unpaid if the Agent had not received
dividends or payments upon the Guarantor Claims.

 

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

 

Section 4.4.            Liens
Subordinate. The Guarantor agrees that any liens, security interests,
judgment liens, charges or other encumbrances upon any Borrowers’ assets
securing payment of the Guarantor Claims shall be and remain inferior and
subordinate to any liens, security interests, judgment liens, charges or other
encumbrances upon such Borrowers’ assets securing payment of the Guaranteed
Obligations, regardless of whether such encumbrances in favor of the Guarantor
or the Agent presently exist or are hereafter created or attach. Until ninety
one (91) days after the Obligations shall have been paid in full and the
Guaranteed Obligations fully satisfied, without the prior written consent of
the Agent, the Guarantor shall not (a) exercise or enforce any creditor’s
right it may have against any Borrower, or (b) foreclose, repossess,
sequester or otherwise take steps or institute any action or proceedings
(judicial or otherwise, including without limitation the commencement of, or
joinder in, any liquidation, bankruptcy, rearrangement, debtor’s relief or
insolvency proceeding) to enforce any liens, mortgages, deeds of trust,
security interests, collateral rights, judgments or other encumbrances on
assets of any Borrower held by the Guarantor.

 

ARTICLE V

 

MISCELLANEOUS

 

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

 

11

 

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

 

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

 

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

 

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

 

Section 5.5.            Parties
Bound; Assignment. This Guaranty shall be binding upon and inure to the
benefit of the parties hereto and their respective successors, assigns and
legal representatives; provided, however, that the Guarantor may not, without
the prior written consent of the Agent, assign any of its rights, powers, duties
or obligations hereunder.

 

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

 

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

 

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

 

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

 

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

 

12

 

Section 5.11.          Cooperation.
The Guarantor acknowledges that the Agent and its successors and assigns may,
subject to any applicable limitations set forth in the Credit Agreement assign,
or sell participations in, its rights under the Credit Agreement pursuant to
the terms thereof. The Guarantor shall reasonably cooperate with the Agent and
Lenders in effecting any such assignment or participation.

 

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

 

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

 

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

 

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

 

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

 

13

 

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

 

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

 

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

 

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

 

14

 

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

 

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

 

	
   

  	
   

  	
  CXR Anderson Jacobson SAS

  
	
   

  	
   

  	
  Rue de l’Ornette

  
	
   

  	
   

  	
  28410-Abondant

  
	
   

  	
   

  	
  France

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Emrise Corporation

  
	
   

  	
   

  	
  9485 Haven Avenue,
  Suite 100

  
	
   

  	
   

  	
  Rancho Cucamonga, CA
  91730

  
	
   

  	
   

  	
  Attn: D. John Donovan

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Rutan & Tucker, LLP

  
	
   

  	
   

  	
  611 Anton Blvd., Suite 1400

  
	
   

  	
   

  	
  Costa Mesa, CA 92626

  

 

15

 

Attn: Larry A. Cerutti,
Esq.

Fax No.: (714) 546-9035

 

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

 

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

 

16

 

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

 

	
   

  	
  GUARANTOR:

  
	
   

  	
   

  
	
   

  	
  CXR ANDERSON
  JACOBSON SAS

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Carmine Thomas Oliva

  
	
   

  	
  Name:

  	
   Carmine Thomas Oliva

  
	
   

  	
  Title  

  	
  President

  
				

 

17

 

	
  Acknowledged
  and agreed:

  	
   

  	
   

  
	
   

  	
   

  
	
  AGENT AND ARRANGER:

  	
   

  
	
   

  	
   

  
	
  GVEC
  RESOURCE IV INC.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /S/
  ROBERT J. ANDERSON

  	
   

  
	
  Name:

  	
  Robert
  J. Anderson

  	
   

  
	
  Title:

  	
   Authorized
  Signatory

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /S/ PETER PAUL MENDEL

  	
   

  
	
  Name:

  	
  Peter Paul Mendel

  	
   

  
	
  Title: 

  	
   Authorized
  Signatory

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00133-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00133-of-00352.parquet"}]]