formsc13d_298585.htm

0000932440-14-000031.txt : 20140124 0000932440-14-000031.hdr.sgml : 20140124 20140124144343 ACCESSION NUMBER: 0000932440-14-000031 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20140124 DATE AS OF CHANGE: 20140124 GROUP MEMBERS: DAVID J. BRAND SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: EMRISE Corp CENTRAL INDEX KEY: 0000854852 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPONENTS, NEC [3679] IRS NUMBER: 770226211 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-41499 FILM NUMBER: 14545591 BUSINESS ADDRESS: STREET 1: 2530 MERIDIAN PARKWAY CITY: DURHAM STATE: NC ZIP: 27713 BUSINESS PHONE: 408-200-3040 MAIL ADDRESS: STREET 1: 2530 MERIDIAN PARKWAY CITY: DURHAM STATE: NC ZIP: 27713 FORMER COMPANY: FORMER CONFORMED NAME: Emrise CORP DATE OF NAME CHANGE: 20040916 FORMER COMPANY: FORMER CONFORMED NAME: MICROTEL INTERNATIONAL INC DATE OF NAME CHANGE: 19951117 FORMER COMPANY: FORMER CONFORMED NAME: CXR CORP DATE OF NAME CHANGE: 19920703 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Echo Holdings, LLC CENTRAL INDEX KEY: 0001595333 IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 120 OLD POST ROAD STREET 2: SUITE AWRE CITY: RYE STATE: NY ZIP: 10580 BUSINESS PHONE: 917-539-7309 MAIL ADDRESS: STREET 1: 120 OLD POST ROAD STREET 2: SUITE AWRE CITY: RYE STATE: NY ZIP: 10580 SC 13D 1 formsc13d_298585.htm SCHEDULE 13D formsc13d_298585.htm

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT

TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO

RULE 13d-2(a)

(Amendment No. )*

EMRISE Corporation

(Name of Issuer)

Common Stock, par value $0.0033 per share

(Title of Class of Securities)

29246J200 (Common Stock)

(CUSIP Number)

Bruce R. Kraus, Esq.

Kelley Drye & Warren LLP

101 Park Avenue

New York, New York 10178

(212) 808-7714

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

January 14, 2014

(Date of Event which Requires

Filing of this Schedule)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box. ¨

NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

(Continued on following pages)

(Page 1 of 7 Pages)

--------------------------

* The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No. 29246J200

SCHEDULE 13D

Page 2 of 7 Pages

1	NAME OF REPORTING PERSONS Echo Holdings, LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) ¨ (b) ¨
3	SEC USE ONLY
4	SOURCE OF FUNDS WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER - 0 -
	8	SHARED VOTING POWER 543,477 share of Common Stock
	9	SOLE DISPOSITIVE POWER - 0 -
	10	SHARED DISPOSITIVE POWER 543,477 share of Common Stock
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 543,477 share of Common Stock
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (see Item 5) 5.1%
14	TYPE OF REPORTING PERSON OO

CUSIP No. 29246J200

SCHEDULE 13D

Page 3 of 7 Pages

1	NAME OF REPORTING PERSONS David J. Brand
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) ¨ (b) ¨
3	SEC USE ONLY
4	SOURCE OF FUNDS OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION United States of America
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER - 0 -
	8	SHARED VOTING POWER 543,477 share of Common Stock
	9	SOLE DISPOSITIVE POWER - 0 -
	10	SHARED DISPOSITIVE POWER 543,477 share of Common Stock
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 543,477 share of Common Stock
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (see Item 5) 5.1%
14	TYPE OF REPORTING PERSON IN

CUSIP No. 29246J200

SCHEDULE 13D

Page 4 of 7 Pages

Item 1.

SECURITY AND ISSUER.

This statement relates to the shares of common stock, par value $0.0033 per share (the “Common Stock”), of EMRISE Corporation, a Delaware corporation (the “Issuer”). The principal executive office of the Issuer is located at 2530 Meridian Parkway, Durham, North Carolina 27713.

Item 2.

IDENTITY AND BACKGROUND.

This Schedule 13D is filed jointly by Echo Holdings, LLC, a Delaware limited liability company (“Echo”) and David J. Brand, the Managing Member of Echo (each, a “Reporting Person” and, collectively, the “Reporting Persons”). A Joint Filing Agreement among the Reporting Persons is attached hereto as Exhibit 1. The principal business address of Echo is 120 Old Post Road, Suite AWRE, Rye, New York 10580.

The principal business of Echo is to invest in the debt and equity securities of the Issuer, and to engage in such other activities as its Managing Member deems necessary and advisable. The principal business of David J. Brand is to act as Managing Member of Echo. Mr. Brand is also the Co-Founder and Managing Member of Sagamore Capital Group LLC, a private equity firm. The principal business address of Sagamore Capital Group LLC is 750 Lexington Avenue, 15th Floor, New York, New York 10022. Mr. Brand is a citizen of the United States of America.

During the past five years, neither of the Reporting Persons has been (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of which was or is subject to a judgment, decree, or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding a violation in respect to such laws.

Item 3.

SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.

On January 14, 2014, Echo entered into four agreements: the Securities Purchase Agreement by and between Joanne Couse and Echo (the “Couse Agreement”); the Securities Purchase Agreement by and between The Thomas PM Couse Family Trust and Echo (the “Trust Agreement”); the Stock Purchase Agreement by and between Charles S. Brand and Echo (the “Brand Agreement”); and the Note Option Agreement by and between Charles S. Brand and Echo (the “Note Option Agreement,” and together with the Couse Agreement, the Trust Agreement and the Brand Agreement, the “Agreements”).

Pursuant to the Couse Agreement, the Trust Agreement and the Brand Agreement, Echo has purchased: (i) 543,477 shares of Common Stock reported in this Schedule 13D for a cash purchase price of $0.30 per share for an aggregate price of $163,043.10, and (ii) two Subordinated Contingent Secured Promissory Notes, due December 15, 2014, with aggregate principal amount outstanding of $526,661.62, issued by EMRISE Electronics Corporation (“EEC”), guaranteed by the Issuer and secured by all of the assets of its Pascall Electronics Limited, XCEL Power Systems, Ltd. and CXR Larus Corporation subsidiaries (the “Subsidiaries”) (the “Couse Notes”) for 85% of principal amount representing a total cash purchase price of $447,662.36.

Pursuant to the Note Option Agreement, Echo has been appointed Attorney-in-Fact pursuant to an Irrevocable Power of Attorney (the “POA”) described in more detail under Item 6 below and entered into a Put/Call Agreement with Charles S. Brand. The Put/Call Agreement provides Charles S. Brand with the right to require Echo to purchase a Subordinated Contingent Secured Promissory Note, due December 15, 2014 with aggregate principal amount outstanding of $1,750,546.43, issued by EEC, guaranteed by the Issuer and secured by all of the assets of the Subsidiaries (the “CB Note,” and together with the Couse Notes, the “Notes”), and provides Echo with the right to require Charles S. Brand to sell the CB Note at a future date. The price for such put or call of the CB Notes is subject to adjustments based on a number of factors including receipt of principal and interest payments on the CB Note, subject to a maximum cash consideration of 85% of the current principal amount outstanding or $1,487,964.47.

CUSIP No. 29246J200

SCHEDULE 13D

Page 5 of 7 Pages

Funds for the cash portion of these purchases have been or will be derived from the available working capital of Echo. None of the funds used to purchase the shares of Common Stock, the Couse Notes or the CB Notes have been or will be provided directly or indirectly through borrowings of any nature.

Item 4.

PURPOSE OF TRANSACTION.

Echo purchased the Common Stock and the Couse Notes, and entered into the POA and the Put/Call Agreement for investment purposes. The Reporting Persons have engaged, and intend to continue to engage, in discussions with management and the Board of Directors (the “Board”) of the Issuer regarding its financial performance and announced evaluation of strategic alternatives.

The Issuer also initiated discussions with Charles S. Brand in the fall of 2013 regarding the Notes and his potential interest in amending the Notes to extend the maturity beyond the current December 15, 2014 maturity date. In the past, the Note holders have agreed to amend the Notes to extend the maturity date. The Reporting Persons and the Issuer recently discussed the Agreements, the maturity as well as certain other items regarding the Notes. At this time, the Reporting Persons have no intention of extending the maturity date or modifying any other terms of the Notes.

The Reporting Persons may acquire additional shares of Common Stock or other securities of the Issuer or may dispose of any or all of the shares, the Notes or other securities of the Issuer from time to time depending upon an ongoing evaluation of such securities, the Issuer, prevailing market conditions, other investment opportunities, liquidity requirements of the Reporting Persons and/or other considerations.

Further, the Reporting Persons may engage in communications with one or more shareholders of the Issuer, one or more officers or employees of the Issuer, one or more members of the Board (and/or committees thereof) and/or one or more representatives of the Issuer regarding the Issuer, including but not limited to its operations, business, strategy, financial results, budgets, ownership structure, management team composition, board composition (which may include a request that a representative(s) of the Reporting Persons be nominated for election to, or appointed to, the board of directors of the Issuer). The Reporting Persons may propose concepts and strategies that are consistent with, that complement, or that diverge from the Issuer’s current and future strategy and initiatives. The concepts and strategies the Reporting Persons may propose could, if effected, result in the acquisition by related or unrelated parties of additional securities of the Issuer, an extraordinary corporate transaction involving the Issuer, changes in the Issuer’s capitalization and/or changes in the Board or management of the Issuer. In particular, should the Issuer’s financial performance continue to weaken or the current process of evaluating of strategic alternatives fail to yield, within a reasonable time here from, an actionable opportunity to enhance long-term shareholder value, the Reporting Persons may in the future suggest that the Board consider additional alternatives including any or all of the foregoing.

The Reporting Persons do not have any present plans or proposals which would relate to or result in any of the matters referred to in paragraphs (a) through (j), inclusive, of the instructions to Item 4 of Schedule 13D except as set forth herein or such as would occur upon or in connection with the actions discussed herein. The Reporting Persons intend to review their investment in the Issuer’s securities on a continuing basis and may, at any time and from time to time, reconsider their position and/or change their purpose and/or formulate plans or proposals with respect thereto.

Item 5.

INTEREST IN SECURITIES OF THE ISSUER.

As described above in Item 3 and incorporated by reference here, Echo entered into the Couse Agreement, the Trust Agreement and the Brand Agreement, pursuant to which Echo has acquired 543,477 shares of Common Stock and the Couse Notes with an aggregate principal amount of $526,661.62 currently outstanding. The Agreements were privately negotiated.

The foregoing 543,477 shares of Common Stock represent approximately 5.1% of the Issuer’s currently outstanding Common Stock. The aggregate number and percentage of shares of Common Stock reported herein are based upon the 10,707,337 shares of Common Stock outstanding as of November 12, 2013, as reported in the Issuer's 10-Q filed with the Securities and Exchange Commission on November 14, 2013.

CUSIP No. 29246J200

SCHEDULE 13D

Page 6 of 7 Pages

Except as set forth in Item 3 of this Schedule, the Reporting Persons have not effected any transactions in the Common Stock in the past 60 days.

Item 6.

CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR

RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER.

The Reporting Persons are parties to an agreement with respect to the joint filing of this Schedule 13D and any amendments thereto. A copy of such agreement is attached as Exhibit 1 and is incorporated by reference herein.

As described above in Item 3, Echo entered into the Couse Agreement, the Trust Agreement and the Brand Agreement, pursuant to which Echo has acquired 543,477 shares of Common Stock and the Couse Notes.

Pursuant to the Note Option Agreement, Echo has entered into the Put/Call Agreement that provides Echo with the right or obligation, as the case may be, to purchase the CB Notes. Substantially concurrent with the execution and delivery of the Put/Call Agreement, the current holder of the CB Notes, Charles S. Brand, has granted Echo the POA.

Pursuant to the POA, Charles S. Brand has irrevocably granted Echo a power of attorney (coupled with an interest in the CB Notes) to take any and all actions that Echo deems necessary or advisable, in its sole discretion, in the name of and for and on behalf of Charles S. Brand, with respect to all matters incident to the enforcement, restatement, renegotiation or amendment of the CB Notes. Echo has also been appointed as collateral agent under the Security Agreement between EEC, the Issuer, the Subsidiaries and the holders of the Notes pertaining to the collateral that secures the Notes. In consideration of Echo agreeing to act as collateral agent and attorney-in-fact under the POA, Echo will receive a management fee equal to all payments received with respect to the CB Notes other than principal payments.

Other than the joint filing agreement and the Agreements filed as exhibits hereto, the Reporting Persons have no contracts, arrangements, understandings or relationships with any persons with respect to securities of the Issuer.

Item 7.

MATERIAL TO BE FILED AS EXHIBITS.

Exhibit		Description
1		Joint Filing Agreement, dated January 24, 2014.
2		Securities Purchase Agreement by and between Joanne Couse and Echo Holdings, LLC
3		Securities Purchase Agreement by and between The Thomas PM Couse Family Trust and Echo Holdings, LLC
4		Stock Purchase Agreement by and between Charles S. Brand and Echo Holdings, LLC
5		Note Option Agreement by and between Charles S. Brand and Echo Holdings, LLC

CUSIP No. 29246J200

SCHEDULE 13D

Page 7 of 7 Pages

SIGNATURES

After reasonable inquiry and to the best of his or its knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

Date: January 24, 2014

		Echo Holdings, LLC


		By:	/s/ David J. Brand
		Name:	David J. Brand
		Title:	Managing Member


		By:	/s/ David J. Brand
		Name:	David J. Brand

EX-1 2 exh1_298585.htm JOINT FILING AGREEMENT exh1_298585.htm

EXHIBIT 1

Joint Filing Agreement, dated January 24, 2014

PURSUANT TO RULE 13d-1(k)

The undersigned acknowledge and agree that the foregoing statement on Schedule 13D is filed on behalf of each of the undersigned and that all subsequent amendments to this statement on Schedule 13D may be filed on behalf of each of the undersigned without the necessity of filing additional joint filing agreements. The undersigned acknowledge that each shall be responsible for the timely filing of such amendments, and for the completeness and accuracy of the information concerning him or it contained herein and therein, but shall not be responsible for the completeness and accuracy of the information concerning the others, except to the extent that he or it knows that such information is inaccurate.

Dated: January 24, 2014

		Echo Holdings, LLC


		By:	/s/ David J. Brand
		Name:	David J. Brand
		Title:	Managing Member


		By:	/s/ David J. Brand
		Name:	David J. Brand

EX-2 3 exh2_298262.htm SECURITIES PURCHASE AGREEMENT exh2_298262.htm

EXHIBIT 2

EXECUTION COPY

SECURITIES PURCHASE AGREEMENT

SECURITIES PURCHASE AGREEMENT (this “Agreement”) dated as of January 14, 2014, between Joanne Couse (the “Seller”) and Echo Holdings, LLC (the “Buyer”).

WHEREAS, the Buyer desires to purchase from the Seller, and the Seller desires to sell to the Buyer, shares of common stock, $0.0033 par value, per share (the “Stock”) issued by EMRISE Corporation (the “Company”) and the Subordinated Contingent Secured Promissory Note, dated August 20, 2008, as amended by Amendment No. 1 on November 20, 2009, as amended by Amendment No. 2 on August 31, 2010, as amended by Amendment No. 3 on November 1, 2012 (the “Note,” and together with the Stock, the “Securities”), issued by EMRISE Electronics Corporation (“Emrise Electronics”), subject to the terms and conditions set forth herein; and

WHEREAS, in accordance with Section 14 of the Note, the Seller has provided notice of the proposed sale of the Note to Emrise Electronics; and

WHEREAS, effective as of the Closing (as defined below), the Seller desires to consent to the appointment of the Buyer as, and the Buyer agrees to serve as, Collateral Agent under that certain Amended and Restated Security Agreement among the Company, Emrise Electronics, certain subsidiaries of the Company listed therein and the Lenders party thereto, dated as of August 31, 2010 (the “Security Agreement”); and

NOW THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Seller and the Buyer hereby agree as follows:

1. Purchase and Sale of the Securities. Subject to the terms and conditions of this Agreement, the Seller shall sell, transfer and deliver or cause to be sold, transferred and delivered to the Buyer, and the Buyer shall purchase from the Seller, the amount of Securities set forth on Schedule A-1 attached hereto at the aggregate purchase price set forth on such schedule (the “Purchase Price”), payable as set forth below in Section 2.

2. Closing. The closing (the “Closing”) of the purchase and sale of the Securities shall be held at the offices of the Buyer, at 10:00 a.m. on January 21, 2014, or, if the conditions to the Closing set forth in Section 3 shall not have been satisfied by such date, as soon as practicable after such conditions shall have been satisfied. At the Closing, the Buyer shall initially deliver funds equal to $223,831.18 with respect to the Note (the “Initial Payment”) by wire transfer of immediately available funds to an account of the Seller designated in writing by the Seller to the Buyer. Substantially concurrent with the delivery of the Initial Payment, the Seller shall deliver or cause to be delivered to the Buyer (i) the assignment of Note (“Assignment of Note”) in the form annexed hereto as Exhibit A, (ii) an executed letter of intent addressed to the Seller’s broker-dealer, National Financial Services (the “Seller Broker”), advising the Seller Broker to deliver the Stock electronically through the DTC (Depository Trust Company) to an account of the Buyer designated in writing by the Buyer to the Seller, and (iii) a copy of the notice delivered to Emrise Electronics pursuant to Section 14 of the Note. Upon confirmation of

receipt of the Stock by the Buyer’s broker-dealer and delivery to the Buyer by the Seller of the Federal Express confirmation of delivery of the notice described in clause (iii) of the preceding sentence, the Buyer shall deliver $0.30 per share of the Stock or an aggregate of $6,000 with respect to the Stock by wire transfer of immediately available funds to an account of the Seller designated in writing by the Seller to the Buyer.

3. Conditions to Closing. (a) The Buyer’s Obligation. The obligation of the Buyer to purchase and pay for the Securities is subject to the satisfaction (or waiver by the Buyer) as of the Closing of the following conditions:

(i) The representations and warranties of the Seller made in this Agreement shall be true and correct in all material respects, as of the date hereof and as of the time of the Closing as though made as of such time. The Seller shall have performed or complied in all material respects with all obligations and covenants required by this Agreement to be performed or complied with by the Seller by the time of the Closing.

(ii) No statute, rule, regulation, executive order, decree, temporary restraining order, preliminary or permanent injunction or other order enacted, entered, promulgated, enforced or issued by any Federal, state, local or foreign government or any court of competent jurisdiction, administrative agency or commission or other governmental authority or instrumentality, domestic or foreign (a “Governmental Entity”) or other legal restraint or prohibition preventing the purchase and sale of the Securities shall be in effect.

(iii) The Buyer’s satisfactory completion of its due diligence with respect to the Company.

(iv) The Buyer’s purchase of 503,477 shares of stock of the Company from Charles S. Brand.

(b) The Seller’s Obligation. The obligation of the Seller to sell and deliver the Securities to the Buyer is subject to the satisfaction (or waiver by the Seller) as of the Closing of the following conditions:

(i) The representations and warranties of the Buyer made in this Agreement shall be true and correct in all material respects, as of the date hereof and as of the time of the Closing as though made as of such time. The Buyer shall have performed or complied in all material respects with all obligations and covenants required by this Agreement to be performed or complied with by the Buyer by the time of the Closing.

(ii) No statute, rule, regulation, executive order, decree, temporary restraining order, preliminary or permanent injunction or other order enacted, entered, promulgated, enforced or issued by any Governmental Entity or other legal restraint or prohibition preventing the purchase and sale of the Securities shall be in effect.

4. Representations and Warranties of the Seller. The Seller hereby represents and warrants to the Buyer as follows:

(a) Authority. The Seller has all requisite power and authority to enter into this Agreement, to perform her obligations hereunder and to consummate the transactions contemplated hereby. This Agreement has been duly executed and delivered by the Seller and constitutes a legal, valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms.

(b) No Conflicts; Consents. The execution and delivery of this Agreement by the Seller do not, and the consummation of the transactions contemplated hereby and compliance with the terms hereof will not, conflict with, or result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancelation or acceleration of any obligation or to loss of a material benefit under, or result in the creation of any lien (statutory or other), claim, encumbrance, mortgage, security interest, community property interest, option, charge pledge, condition, equitable interest, right of first refusal, or restriction of any kind on the Securities or, including any restriction the use, voting, transfer, receipt of income or exercise of any other attribute of ownership of the Securities (collectively, “Encumbrances”) under, any provision of (i) any contract, commitment, agreement or arrangement to which the Seller is a party or by which any of the Securities are bound or (ii) any judgment, order or decree, or statute, law, ordinance, rule or regulation applicable to the Seller or the Securities. No consent, approval, license, permit, order or authorization of, or registration, declaration or filing with, any Governmental Entity is required to be obtained or made by or with respect to the Seller in connection with the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby.

(c) The Securities. The Seller has good and valid title to the Securities, free and clear of any Encumbrances of any kind. Assuming the Buyer has the requisite power and authority to be the lawful owner of the Securities, upon delivery to the Buyer at the Closing of the Securities, duly endorsed by the Seller for transfer to the Buyer, and upon the Seller’s receipt of the Purchase Price, good and valid title to the Securities will pass to the Buyer, free and clear of any Encumbrances, other than those arising from acts of the Buyer. The Securities are not subject to any voting trust agreement or other contract, agreement, arrangement, commitment or understanding, including any such agreement, arrangement, commitment or understanding restricting or otherwise relating to the voting, dividend rights or disposition of the Securities.

(d) Actions and Proceedings, etc. There are no (i) outstanding judgments, orders, injunctions or decrees of any Governmental Entity or arbitration tribunal against the Seller, (ii) lawsuits, actions or proceedings pending or, to the knowledge of the Seller, threatened against the Seller, or (iii) investigations by any Governmental Entity which are, to the knowledge of the Seller, pending or threatened against the Seller, and which, in the case of each of clauses (i), (ii) and (iii), have a material adverse effect on the ability of the Seller to consummate the transactions contemplated hereby.

(e) Disclosure; Public Information. Neither the Seller nor any representative, agent, attorney or any other person acting on behalf of the Seller has provided the Buyer or its representatives, agents, attorneys or any other person acting on behalf of the Buyer with any information that constitutes or might be reasonably be expected to constitute material, non-public information (for purposes of United States federal and state securities laws) with respect to the Company, its affiliates or any of the securities of the Company or its affiliates.

(f) Entire Position; Recent Sales; Negotiations. The Securities sold hereby constitute all Securities owned by the Seller and the Seller has not purchased or sold any shares of Stock in the six month period preceding the date of this Agreement. The Seller hereby acknowledges and agrees that the terms and provisions of this Agreement are the result of arm’s length and good faith negotiations between the Buyer and the Seller, and the Purchase Price for the Securities set forth in Schedule A is fair and reasonable.

(g) Information. On or prior to the date hereof, the Seller has provided the Buyer with complete and accurate copies of all communications, correspondence, notices, consents, waivers, certificates or other documents relating to the Securities received or provided by the Seller relating to the Securities.

(h) Amendments. As of the Closing Date, there have been no amendments, supplements, restatements or other modifications to the terms of the Note since Amendment No. 3 thereto. Set forth on Schedule A-2 is a list of all arrangements, understandings or agreements between the Seller and Emrise Electronics or any of its affiliates with respect to the Note. It is hereby understood and agreed that the Buyer has not assumed, and shall not assume, any liabilities under any of the documents set forth on Schedule A-2, including, without limitation, any indemnification therein provided.

5. Representations and Warranties of the Buyer. The Buyer hereby represents and warrants to the Seller as follows:

(a) Organization and Standing. The Buyer is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation.

(b) Authority. The Buyer has all requisite power and authority to enter into this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. All acts and other proceedings required to be taken by the Buyer to authorize the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby have been duly and properly taken. This Agreement has been duly executed and delivered by the Buyer and constitutes a legal, valid and binding obligation of the Buyer, enforceable against the Buyer in accordance with its terms.

(c) No Conflicts; Consents. The execution and delivery of this Agreement by the Buyer do not, and the consummation of the transactions contemplated hereby and compliance with the terms hereof will not, conflict with, or result in any violation of or default (with or without notice or lapse of time, or both) under, any provision of (i) the organizational documents, of the Buyer, (ii) any contract, commitment, agreement or arrangement to which the Buyer is a party or by which its properties or assets are bound, or (iii) any judgment, order, or decree, or statute, law, ordinance, rule or regulation applicable to the Buyer or its properties or assets. No consent, approval, license, permit, order or authorization of, or registration, declaration or filing with, any Governmental Entity is required to be obtained or made by or with respect to the Buyer in connection with the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby.

(d) Securities Act. The Securities purchased by the Buyer pursuant to this Agreement are being acquired for investment only and not with a view to any public distribution thereof, and the Buyer shall not offer to sell or otherwise dispose of the Securities so acquired by it in violation of any of the registration requirements of the Securities Act of 1933, as amended.

(e) Actions and Proceedings, etc. There are no (i) outstanding judgments, orders, injunctions or decrees of any Governmental Entity or arbitration tribunal against the Buyer, (ii) lawsuits, actions or proceedings pending or, to the knowledge of the Buyer, threatened against the Buyer, or (iii) investigations by any Governmental Entity which are, to the knowledge of the Buyer, pending or threatened against the Buyer, and which, in the case of each of clauses (i), (ii) and (iii), would reasonably be expected to have a material adverse effect on the ability of the Buyer to consummate the transactions contemplated hereby.

(f) No Reliance. The Buyer is a sophisticated investor and has sufficient knowledge and experience in investing in securities to properly evaluate the merits of the transactions contemplated hereby. The Buyer has independently, and without reliance upon the Seller, and based on such information as the Buyer has deemed appropriate, made its own analysis and decision to purchase the Securities pursuant to the terms hereof. It is hereby expressly understood and agreed by the Buyer that the Seller makes no representation or warranty whatsoever with respect to the business, condition (financial or otherwise), properties, prospects, status or affairs of the Company or Emrise Electronics, or with respect to the value of any of the Securities being sold hereunder. The Buyer is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.

6. Appointment of New Collateral Agent. The Seller hereby agrees to and hereby consents to the appointment of the Buyer as Collateral Agent for the Lenders (as such term is defined under the Security Agreement) under the Security Agreement (in such capacity, the “Collateral Agent”) and the other documents related thereto (including, without limitation, guaranties, all asset debentures and deeds of priorities) to serve from the date of the Closing until the termination of the Security Agreement. The Seller hereby irrevocably authorizes the Collateral Agent to take such actions and to exercise such powers under the Security Agreement as provided therein.

7. Further Assurances. From time to time, as and when requested by either party hereto, the other party shall execute and deliver, or cause to be executed and delivered, all such documents and instruments and shall take, or cause to be taken, all such further or other actions, as such other party may reasonably deem necessary or desirable to consummate the transactions contemplated by this Agreement.

8. Indemnity. The Seller hereby agrees to defend, indemnify and hold harmless the Buyer, its members, affiliates, directors and officers (collectively, “Indemnified Parties”), from and against, and shall pay and reimburse each of them for, any and all losses, claims, damages and liabilities (including, without limitation, legal fees and other expenses incurred in connection with any suit, action or proceeding or any claim asserted, as such fees and expenses are incurred), incurred or sustained by, or imposed upon, the Indemnified Parties based upon, arising out of, with respect to or by reason of:

(a) any inaccuracy in or breach of any of the representations or warranties of the Seller contained in this Agreement or in any certificate or instrument delivered by or on behalf of the Seller pursuant to this Agreement, as of the date such representation or warranty was made or as if such representation or warranty was made on and as of the Closing; or

(b) any breach or non-fulfillment of any covenant, agreement or obligation to be performed by Seller pursuant to this Agreement or any certificate or instrument delivered by or on behalf of the Seller pursuant to this Agreement.

9. Assignment. This Agreement and the rights and obligations hereunder shall not be assignable or transferable by the Buyer or the Seller without the prior written consent of the other party hereto; provided, however, that the Buyer may assign its right to purchase the Securities hereunder to a fund or account under common control with the Buyer without the prior written consent of the Seller; provided further, however, that no assignment shall limit or affect the assignor’s obligations hereunder. Any attempted assignment in violation of this Section 9 shall be void.

10. No Third-Party Beneficiaries. This Agreement is for the sole benefit of the parties hereto and their permitted assigns and nothing herein expressed or implied shall give or be construed to give to any person, other than the parties hereto and such assigns, any legal or equitable rights hereunder.

11. Termination. (a) Anything contained herein to the contrary notwithstanding, this Agreement may be terminated and the transactions contemplated hereby abandoned at any time prior to the Closing Date:

(i) by mutual written consent of the Seller and the Buyer;

(ii) by the Buyer if any of the conditions set forth in Section 3(a) shall have become incapable of fulfillment, and shall not have been waived by the Buyer; or

(iii) by the Seller if any of the conditions set forth in Section 3(b) shall have become incapable of fulfillment, and shall not have been waived by the Seller;

(iv) by either party hereto if the Closing shall not have occurred by the close of business on February 18, 2014;

provided, however, that the party seeking termination pursuant to clause (ii) or (iii) is not in breach of any of its representations, warranties, covenants or agreements contained in this Agreement.

(b) If this Agreement is terminated and the transactions contemplated hereby are abandoned as described in this Section 11, this Agreement shall become void and of no further force or effect.

12. Expenses. Whether or not the transactions contemplated hereby are consummated, and except as otherwise specifically provided in this Agreement, all costs and

expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs or expenses.

13. Amendments. No amendment, modification or waiver in respect of this Agreement shall be effective unless it shall be in writing and signed by both parties hereto.

14. Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) if applicable, on the date sent by e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours of the recipient or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid, as follows:

	(i)	if to the Buyer,

		Echo Holdings, LLC
		120 Old Post Road, Suite AWRE
		Rye, NY 10580
		Attention: David J. Brand

		With copy to:

		Kelley Drye & Warren LLP
		101 Park Avenue
		New York, NY 10178
		Attention: Bruce R. Kraus, Esq.
		bkraus@kelleydrye.com

	(ii)	if to the Seller,

		Joanne Couse
		1 Waltham Way
		Jackson, NJ 08527

		With copy to:

		Giordano, Halleran & Ciesla, P.C.
		125 Half Mile Road, Suite 300
		Red Bank, NJ 07701
		Attention: John A. Aiello, Esq.
		jaiello@ghclaw.com

15. Interpretation. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

16. Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more such counterparts have been signed by each of the parties and delivered to the other party. Transmission of such counterparts by email of PDFs shall constitute effective delivery.

17. Entire Agreement. This Agreement contains the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersede all prior agreements and understandings relating to such subject matter. Neither party shall be liable or bound to any other party in any manner by any representations, warranties or covenants relating to such subject matter except as specifically set forth herein.

18. Severability. If any provision of this Agreement (or any portion thereof) or the application of any such provision (or any portion thereof) to any person or circumstance shall be held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision hereof (or the remaining portion thereof) or the application of such provision to any other persons or circumstances.

19. Consent to Jurisdiction. The Buyer and the Seller irrevocably submit to the exclusive jurisdiction of (a) the Supreme Court of the State of New York, New York County, and (b) the United States District Court for the Southern District of New York, for the purposes of any suit, action or other proceeding arising out of this Agreement or any transaction contemplated hereby. The Buyer and the Seller agree to commence any action, suit or proceeding relating hereto either in the United States District Court for the Southern District of New York or if such suit, action or other proceeding may not be brought in such court for jurisdictional reasons, in the Supreme Court of the State of New York, New York County. The Buyer and the Seller further agree that service of any process, summons, notice or document by U.S. registered mail to such party’s respective address set forth above shall be effective service of process for any action, suit or proceeding in New York with respect to any matters to which it has submitted to jurisdiction in this Section 19. The Buyer and the Seller irrevocably and unconditionally waive any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby in (i) the Supreme Court of the State of New York, New York County, or (ii) the United States District Court for the Southern District of New York, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

20. Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York applicable to agreements made and to be performed entirely within such State, without regard to the conflicts of law principles of such State.

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the date first written above.




	/s/ Joane Couse
	Joanne Couse



	ECHO HOLDINGS, LLC


	By:	/s/ David J. Brand
	Name: David J. Brand
	Title: Managing Member

SCHEDULE A-1

Securities

Description of Securities	Amount of Securities	Purchase Price Per Security	Aggregate Purchase Price
Emrise Corporation Common Stock, par value $0.0033 per share	20,000	$0.30	$6,000
Emrise Electronics Corporation Subordinated Contingent Secured Promissory Note	263,330.81 principal amount	85%	$223,831.18
TOTAL			$229,831.18

SCHEDULE A-2

Arrangements, Understandings or Agreements with the Company, Emrise Electronics or any of their affiliates with respect to the Note

Stock Purchase Agreement by and among EMRISE Electronics Corporation, EMRISE Corporation, Charles S. Brand, Advanced Control Components, Inc., Thomas P.M. Couse, Joanne Couse, Michael Gaffney, and Custom Components, Inc. dated May 23, 2008

Amendment No. 1 to Stock Purchase Agreement by and among EMRISE Electronics Corporation, EMRISE Corporation, Charles S. Brand, Advanced Control Components, Inc., Thomas P.M. Couse, Joanne Couse, Michael Gaffney, and Custom Components, Inc. dated August 20, 2008

Amendment No. 2 to Stock Purchase Agreement by and among EMRISE Electronics Corporation, Charles S. Brand, Thomas P.M. Couse, Joanne Couse, and Michael Gaffney dated November 20, 2009

Intercreditor Agreement by and among EMRISE Electronics Corporation, Advanced Control Components, Inc., Charles S. Brand, Thomas P.M. Couse, Joanne Couse and Michael Gaffney dated August 20, 2008

Continuing Guaranty executed by EMRISE Corporation dated August 20, 2008

Subordinated Contingent Secured Promissory Note dated August 20, 2008 made payable to Joanne Couse by EMRISE Electronics Corporation

Amendment No. 1 to Subordinated Contingent Secured Promissory dated November 20, 2009 by and between EMRISE Electronics Corporation and Joanne Couse

Amendment No. 2 to Subordinated Contingent Secured Promissory dated August 31, 2010 by and between EMRISE Electronics Corporation and Joanne Couse

Amendment No. 3 to Subordinated Contingent Secured Promissory dated November 1, 2012 by and between EMRISE Electronics Corporation and Joanne Couse

Master Agreement dated June 7, 2010 by and among EMRISE Corporation, EMRISE Electronics Corporation, CXR Larus Corporation, Pascall Electronics Limited, XCEL Power Systems, Ltd., CXR Anderson Jacobson SAS, Charles S. Brand, Thomas P.M. Couse, Joanne Couse and Michael Gaffney

Amended and Restated Security Agreement dated August 31, 2010 by and among EMRISE Electronics Corporation, EMRISE Corporation, certain Subsidiaries (as defined therein), Charles S. Brand, as Collateral Agent, and certain Lenders (as defined therein)

EXHIBIT A

ASSIGNMENT OF SUBORDINATED

CONTINGENT SECURED PROMISSORY NOTE

This Assignment of Subordinated Contingent Secured Promissory Note (this “Assignment”) is dated January __, 2014 and is by and between Joanne Couse, (the “Assignor”) and Echo Holdings, LLC, a Delaware limited liability company (the “Assignee”).

WHEREAS, Assignor is the holder of the Subordinated Contingent Secured Promissory Note dated August 20, 2008 made payable to Assignor by EMRISE Electronics Corporation (“EEC”), as amended by Amendment No. 1 to Subordinated Contingent Secured Promissory Note dated November 20, 2009, as further amended by Amendment No. 2 to Subordinated Contingent Secured Promissory Note dated August 31, 2010, as further amended by Amendment No. 3 to Subordinated Contingent Secured Promissory Note dated November 1, 2012 (the “Note”);

WHEREAS, the Assignor and Assignee have entered into the Securities Purchase Agreement dated January 9, 2014 (the “Agreement”) pursuant to which Assignor is selling to Assignee the Note; and

WHEREAS, Assignor desires to assign the Note to Assignee, and Assignee is agreeable thereto, pursuant to the terms and conditions contained herein and in the Agreement.

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements contained herein and in the Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

1. Assignment of the Note. Assignor hereby irrevocably assigns, transfers, and conveys unto Assignee, all of Assignor’s right, title and interest in and to the Note (which is attached hereto as Schedule B-1), together with the money due and to become due thereon, with the interest as set forth in said Note and other obligations and all proceeds thereof.

2. Representations by Assignee. Assignee represents that it has received the original Note simultaneously with the execution hereof.

3. Further Assurances. The parties agree that they shall execute and deliver or cause to be executed and delivered from time to time such instruments, documents, agreements and assurances and take such other action as any other party may reasonably require in connection with this Assignment.

4. Governing Law. This Assignment shall be construed in accordance with and governed by the laws of the State of New York.

5. Binding Effect. This Assignment shall be binding upon the parties hereto and shall inure to the benefit of and be enforceable by their respective heirs, successors and assigns.

6. Counterpart Signatures. This Assignment may be executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one and the same Assignment. It shall not be necessary that each party execute each counterpart, or that any one counterpart be executed by more than one party, so long as each party executes at least one counterpart.

[Signatures on page to follow]

IN WITNESS WHEREOF, the undersigned have duly executed this Assignment as of January __, 2014

	ASSIGNOR:



	JOANNE COUSE



	ASSIGNEE:

	ECHO HOLDINGS, LLC



	By:
	Name: David J. Brand
	Title: Managing Member

EX-3 4 exh3_300525.htm SECURITIES PURCHASE AGREEMENT exh3_300525.htm

EXHIBIT 3

EXECUTION COPY

SECURITIES PURCHASE AGREEMENT

SECURITIES PURCHASE AGREEMENT (this “Agreement”) dated as of January 14, 2014, between Thomas PM Couse Family Trust (the “Seller”) and Echo Holdings, LLC (the “Buyer”).

WHEREAS, in accordance with Section 14 of the Note, the Seller has provided notice of the proposed sale of the Note to Emrise Electronics; and

notice delivered to Emrise Electronics pursuant to Section 14 of the Note. Upon confirmation of receipt of the Stock by the Buyer’s broker-dealer and delivery to the Buyer by the Seller of the Federal Express confirmation of delivery of the notice described in clause (iii) of the preceding sentence, the Buyer shall deliver $0.30 per share of the Stock or an aggregate of $6,000 with respect to the Stock by wire transfer of immediately available funds to an account of the Seller designated in writing by the Seller to the Buyer.

(iii) The Buyer’s satisfactory completion of its due diligence with respect to the Company.

(iv) The Buyer’s purchase of 503,477 shares of stock of the Company from Charles S. Brand.

(ii) No statute, rule, regulation, executive order, decree, temporary restraining order, preliminary or permanent injunction or other order enacted, entered, promulgated, enforced or issued by any Governmental Entity or other legal restraint or prohibition preventing the purchase and sale of the Securities shall be in effect.

4. Representations and Warranties of the Seller. The Seller hereby represents and warrants to the Buyer as follows:

(a) Authority. The Seller has all requisite power and authority to enter into this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. This Agreement has been duly executed and delivered by the Seller and constitutes a legal, valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms.

5. Representations and Warranties of the Buyer. The Buyer hereby represents and warrants to the Seller as follows:

(a) Organization and Standing. The Buyer is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation.

(i) by mutual written consent of the Seller and the Buyer;

(ii) by the Buyer if any of the conditions set forth in Section 3(a) shall have become incapable of fulfillment, and shall not have been waived by the Buyer;

(iii) by the Seller if any of the conditions set forth in Section 3(b) shall have become incapable of fulfillment, and shall not have been waived by the Seller; or

(iv) by either party hereto if the Closing shall not have occurred by the close of business on February 18, 2014;

provided, however, that the party seeking termination pursuant to clause (ii) or (iii) is not in breach of any of its representations, warranties, covenants or agreements contained in this Agreement.

(b) If this Agreement is terminated and the transactions contemplated hereby are abandoned as described in this Section 11, this Agreement shall become void and of no further force or effect.

12. Expenses. Whether or not the transactions contemplated hereby are consummated, and except as otherwise specifically provided in this Agreement, all costs and

expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs or expenses.

13. Amendments. No amendment, modification or waiver in respect of this Agreement shall be effective unless it shall be in writing and signed by both parties hereto.

	(i)	if to the Buyer,

		Echo Holdings, LLC
		120 Old Post Road, Suite AWRE
		Rye, NY 10580
		Attention: David J. Brand

		With copy to:

		Kelley Drye & Warren LLP
		101 Park Avenue
		New York, NY 10178
		Attention: Bruce R. Kraus, Esq.
		bkraus@kelleydrye.com

	(ii)	if to the Seller,

		Ellen L. Runk
		1017 Branch Mill Road
		Telford, PA 18969

		And

		Charles T. Couse
		8813 Eli Place
		Glen Allen, VA 23060

		With copy to:

		Giordano, Halleran & Ciesla, P.C.

		125 Half Mile Road, Suite 300
		Red Bank, NJ 07701
		Attention: John A. Aiello, Esq.
		jaiello@ghclaw.com

15. Interpretation. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the date first written above.

	THOMAS PM COUSE FAMILY TRUST


	/s/ Ellen L. Runk
	Ellen L. Runk, Co-Trustee



	s/ Charles T. Couse
	Charles T. Couse, Co-Trustee



	ECHO HOLDINGS, LLC


	By: /s/ David J. Brand
	Name: David J. Brand
	Title: Managing Member

SCHEDULE A-1

Securities

Description of Securities	Amount of Securities	Purchase Price Per Security	Aggregate Purchase Price
Emrise Corporation Common Stock, par value $0.0033 per share	20,000	$0.30	$6,000
Emrise Electronics Corporation Subordinated Contingent Secured Promissory Note	263,330.81 principal amount	85%	$223,831.18
TOTAL			$229,831.18

SCHEDULE A-2

Arrangements, Understandings or Agreements with the Company, Emrise Electronics or any of their affiliates with respect to the Note

None.

EXHIBIT A

ASSIGNMENT OF SUBORDINATED

CONTINGENT SECURED PROMISSORY NOTE

This Assignment of Subordinated Contingent Secured Promissory Note (this “Assignment”) is dated January __, 2014 and is by and between the Thomas P.M. Couse Family Trust, (the “Assignor”) and Echo Holdings, LLC, a Delaware limited liability company (the “Assignee”).

WHEREAS, Assignor is the holder of the Subordinated Contingent Secured Promissory Note dated August 20, 2008 made payable to Thomas P.M. Couse by EMRISE Electronics Corporation (“EEC”), as amended by Amendment No. 1 to Subordinated Contingent Secured Promissory Note dated November 20, 2009, as further amended by Amendment No. 2 to Subordinated Contingent Secured Promissory Note dated August 31, 2010, as further amended by Amendment No. 3 to Subordinated Contingent Secured Promissory Note dated November 1, 2012 (the “Note”);

WHEREAS, the Assignor and Assignee have entered into the Securities Purchase Agreement dated January 9, 2014 (the “Agreement”) pursuant to which Assignor is selling to Assignee the Note; and

WHEREAS, Assignor desires to assign the Note to Assignee, and Assignee is agreeable thereto, pursuant to the terms and conditions contained herein and in the Agreement.

2. Representations by Assignee. Assignee represents that it has received the original Note simultaneously with the execution hereof.

4. Governing Law. This Assignment shall be construed in accordance with and governed by the laws of the State of New York.

5. Binding Effect. This Assignment shall be binding upon the parties hereto and shall inure to the benefit of and be enforceable by their respective heirs, successors and assigns.

[Signatures on page to follow]

IN WITNESS WHEREOF, the undersigned have duly executed this Assignment as of January __, 2014.

	ASSIGNOR:
	THOMAS P.M. COUSE FAMILY TRUST


	By:
	Name: Ellen Runk
	Title: Co-Trustee



	By:
	Name: Charles T. Couse
	Title: Co-Trustee



	ASSIGNEE:

	ECHO HOLDINGS, LLC


	By:
	Name: David J. Brand
	Title: Managing Member

EX-4 5 exh4_298683.htm STOCK PURCHASE AGREEMENT exh4_298683.htm

EXHIBIT 4

EXECUTION COPY

STOCK PURCHASE AGREEMENT

STOCK PURCHASE AGREEMENT (this “Agreement”) dated as of January 14, 2014, between Charles S. Brand (the “Seller”) and Echo Holdings, LLC (the “Buyer”).

WHEREAS, the Buyer desires to purchase from the Seller, and the Seller desires to sell to the Buyer, 503,477 shares of common stock, $0.0033 par value, per share (the “Stock”) issued by Emrise Corporation (the “Company”), subject to the terms and conditions set forth herein; and

1. Purchase and Sale of the Stock. Subject to the terms and conditions of this Agreement, the Seller shall sell, transfer and deliver or cause to be sold, transferred and delivered to the Buyer, and the Buyer shall purchase from the Seller, the Stock for $0.30 per share or an aggregate purchase price of $151,043.10 (the “Purchase Price”), payable as set forth below in Section 2.

2. Closing. The closing (the “Closing”) of the purchase and sale of the Stock shall be held at the offices of the Buyer, at 10:00 a.m. on January 21, 2014, or, if the conditions to the Closing set forth in Section 3 shall not have been satisfied by such date, as soon as practicable after such conditions shall have been satisfied. At the Closing, the Seller shall deliver or cause to be delivered to the Buyer (i) a copy of an executed letter of intent addressed to the Seller’s broker-dealer (the “Seller Broker”), advising the Seller Broker to deliver the Stock electronically through the DTC (Depository Trust Company) to an account of the Buyer designated in writing by the Buyer to the Seller and (ii) a copy of the legal opinion (a form of which is included in Exhibit B attached hereto), the representation letter or other documents delivered by the Seller (or the Seller’s counsel) in connection with the removal of restrictive legends on the Stock. Upon confirmation of receipt of the Stock by the Buyer’s broker-dealer, the Buyer shall deliver the Purchase Price by wire transfer of immediately available funds to an account of the Seller designated in writing by the Seller to the Buyer. The Seller shall be liable for, and shall pay when due, any transfer, gains, documentary, sales, use, registration, stamp, value added or similar taxes, payable by reason of the transactions contemplated by this Agreement or attributable to the sale, transfer or delivery of the Stock, and the Seller shall, at his own expense, file all necessary tax returns and other documentation with respect to such taxes.

3. Conditions to Closing. (a) The Buyer’s Obligation. The obligation of the Buyer to purchase and pay for the Stock is subject to the satisfaction (or waiver by the Buyer) as of the Closing of the following conditions:

complied in all material respects with all obligations and covenants required by this Agreement to be performed or complied with by the Seller by the time of the Closing.

(iii) The Buyer’s satisfactory completion of its due diligence with respect to the Company.

(b) The Seller’s Obligation. The obligation of the Seller to sell and deliver the Stock to the Buyer is subject to the satisfaction (or waiver by the Seller) as of the Closing of the following conditions:

(ii) No statute, rule, regulation, executive order, decree, temporary restraining order, preliminary or permanent injunction or other order enacted, entered, promulgated, enforced or issued by any Governmental Entity or other legal restraint or prohibition preventing the purchase and sale of the Stock shall be in effect.

4. Representations and Warranties of the Seller. The Seller hereby represents and warrants to the Buyer as follows:

(a) Authority. The Seller has all requisite power and authority to enter into this Agreement, to perform his obligations hereunder and to consummate the transactions contemplated hereby. This Agreement has been duly executed and delivered by the Seller and constitutes a legal, valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms.

any judgment, order or decree, or statute, law, ordinance, rule or regulation applicable to the Seller or the Stock. No consent, approval, license, permit, order or authorization of, or registration, declaration or filing with, any Governmental Entity is required to be obtained or made by or with respect to the Seller in connection with the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby.

(c) The Stock. The Seller has good and valid title to the Stock, free and clear of any Encumbrances of any kind. Assuming the Buyer has the requisite power and authority to be the lawful owner of the Stock, upon delivery to the Buyer at the Closing of the Stock, and upon the Seller’s receipt of the Purchase Price, good and valid title to the Stock will pass to the Buyer, free and clear of any Encumbrances, other than those arising from acts of the Buyer. The Stock is not subject to any voting trust agreement or other contract, agreement, arrangement, commitment or understanding, including any such agreement, arrangement, commitment or understanding restricting or otherwise relating to the voting, dividend rights or disposition of the Stock.

(f) Entire Position; Recent Sales; Negotiations. The Stock sold hereby constitutes all Stock owned by the Seller and the Seller has not purchased or sold any shares of Stock in the six month period preceding the date of this Agreement. The Seller hereby acknowledges and agrees that the terms and provisions of this Agreement are the result of arm's length and good faith negotiations between the Buyer and the Seller, and the Purchase Price for the Stock is fair and reasonable.

5. Representations and Warranties of the Buyer. The Buyer hereby represents and warrants to the Seller as follows:

(a) Organization and Standing. The Buyer is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation.

authorize the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby have been duly and properly taken. This Agreement has been duly executed and delivered by the Buyer and constitutes a legal, valid and binding obligation of the Buyer, enforceable against the Buyer in accordance with its terms.

(d) Securities Act. The Stock purchased by the Buyer pursuant to this Agreement are being acquired for investment only and not with a view to any public distribution thereof, and the Buyer shall not offer to sell or otherwise dispose of the Stock so acquired by it in violation of any of the registration requirements of the Securities Act of 1933, as amended.

(f) No Reliance. The Buyer is a sophisticated investor and has sufficient knowledge and experience in investing in securities to properly evaluate the merits of the transactions contemplated hereby. The Buyer has independently, and without reliance upon the Seller, and based on such information as the Buyer has deemed appropriate, made its own analysis and decision to purchase the Stock pursuant to the terms hereof. It is hereby expressly understood and agreed by the Buyer that the Seller makes no representation or warranty whatsoever with respect to the business, condition (financial or otherwise), properties, prospects, status or affairs of the Company, or with respect to the value of any of the Stock being sold hereunder. The Buyer is able to bear the economic risk of an investment in the Stock and, at the present time, is able to afford a complete loss of such investment.

6. Further Assurances. From time to time, as and when requested by either party hereto, the other party shall execute and deliver, or cause to be executed and delivered, all such documents and instruments and shall take, or cause to be taken, all such further or other actions, as such other party may reasonably deem necessary or desirable to consummate the transactions contemplated by this Agreement.

7. Indemnity. The Seller hereby agrees to defend, indemnify and hold harmless the Buyer, its members, affiliates, directors and officers (collectively, “Indemnified Parties”), from and against, and shall pay and reimburse each of them for, any and all losses, claims, damages and liabilities (including, without limitation, legal fees and other expenses incurred in connection with any suit, action or proceeding or any claim asserted, as such fees and expenses are incurred), incurred or sustained by, or imposed upon, the Indemnified Parties based upon, arising out of, with respect to or by reason of:

8. Assignment. This Agreement and the rights and obligations hereunder shall not be assignable or transferable by the Buyer or the Seller without the prior written consent of the other party hereto; provided, however, that the Buyer may assign its right to purchase the Stock hereunder to a fund or account under common control with the Buyer without the prior written consent of the Seller; provided further, however, that no assignment shall limit or affect the assignor’s obligations hereunder. Any attempted assignment in violation of this Section 8 shall be void.

9. No Third-Party Beneficiaries. This Agreement is for the sole benefit of the parties hereto and their permitted assigns and nothing herein expressed or implied shall give or be construed to give to any person, other than the parties hereto and such assigns, any legal or equitable rights hereunder.

10. Termination. (a) Anything contained herein to the contrary notwithstanding, this Agreement may be terminated and the transactions contemplated hereby abandoned at any time prior to the Closing Date:

(i) by mutual written consent of the Seller and the Buyer;

(ii) by the Buyer if any of the conditions set forth in Section 3(a) shall have become incapable of fulfillment, and shall not have been waived by the Buyer;

(iii) by the Seller if any of the conditions set forth in Section 3(b) shall have become incapable of fulfillment, and shall not have been waived by the Seller; or

(iv) by either party hereto if the Closing shall not have occurred by the close of business on February 18, 2014;

provided, however, that the party seeking termination pursuant to clause (ii) or (iii) is not in breach of any of its representations, warranties, covenants or agreements contained in this Agreement.

(b) If this Agreement is terminated and the transactions contemplated hereby are abandoned as described in this Section 10, this Agreement shall become void and of no further force or effect.

11. Expenses. Whether or not the transactions contemplated hereby are consummated, and except as otherwise specifically provided in this Agreement, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs or expenses.

12. Amendments. No amendment, modification or waiver in respect of this Agreement shall be effective unless it shall be in writing and signed by both parties hereto.

13. Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) if applicable, on the date sent by e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours of the recipient or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid, as follows:

	(i)	if to the Buyer,

		Echo Holdings, LLC
		120 Old Post Road, Suite AWRE
		Rye, NY 10580
		Attention: David J. Brand

		With copy to:

		Kelley Drye & Warren LLP
		101 Park Avenue
		New York, NY 10178
		Attention: Bruce R. Kraus, Esq.
		bkraus@kelleydrye.com

	(ii)	if to the Seller,

		Charles S. Brand
		175 Boundary Road
		Colts Neck, NJ 07722

		With copy to:

		Giordano, Halleran & Ciesla, P.C.
		125 Half Mile Road, Suite 300
		Red Bank, NJ 07701
		Attention: John A. Aiello, Esq.
		jaiello@ghclaw.com

14. Interpretation. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

15. Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more such counterparts have been signed by each of the parties and delivered to the other party. Transmission of such counterparts by email of PDFs shall constitute effective delivery.

16. Entire Agreement. This Agreement contains the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersede all prior agreements and understandings relating to such subject matter. Neither party shall be liable or bound to any other party in any manner by any representations, warranties or covenants relating to such subject matter except as specifically set forth herein.

17. Severability. If any provision of this Agreement (or any portion thereof) or the application of any such provision (or any portion thereof) to any person or circumstance shall be held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision hereof (or the remaining portion thereof) or the application of such provision to any other persons or circumstances.

18. Consent to Jurisdiction. The Buyer and the Seller irrevocably submit to the exclusive jurisdiction of (a) the Supreme Court of the State of New York, New York County, and (b) the United States District Court for the Southern District of New York, for the purposes of any suit, action or other proceeding arising out of this Agreement or any transaction contemplated hereby. The Buyer and the Seller agree to commence any action, suit or proceeding relating hereto either in the United States District Court for the Southern District of New York or if such suit, action or other proceeding may not be brought in such court for jurisdictional reasons, in the Supreme Court of the State of New York, New York County. The Buyer and the Seller further agree that service of any process, summons, notice or document by U.S. registered mail to such party’s respective address set forth above shall be effective service of process for any action, suit or proceeding in New York with respect to any matters to which it has submitted to jurisdiction in this Section 18. The Buyer and the Seller irrevocably and unconditionally waive any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby in (i) the Supreme Court of the State of New York, New York County, or (ii) the United States District Court for the Southern District of New York, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

19. Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York applicable to agreements made and to be performed entirely within such State, without regard to the conflicts of law principles of such State.

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the date first written above.

	/s/ Charles S. Brand
	Charles S. Brand


	ECHO HOLDINGS, LLC


	By:	/s/ David J. Brand
	Name: David J. Brand
	Title: Managing Member

EXHIBIT B

Form of legal opinion

Echo Holdings, LLC

120 Old Post Road, Suite AWRE

Rye, NY 10580

Attention: David J. Brand

Gentlemen:

We are special counsel to Charles S. Brand (the “Holder”) in connection with the sale of capital stock issued by Emrise Corporation (the “Company”). We have been informed that the Holder is selling or intends to sell an aggregate of 503,477 shares of the Company’s common stock, par value $0.0033 per share (the “Shares”) to Echo Holdings, LLC. The Shares were issued by the Company to the Holder pursuant to an exemption from registration under the Securities Act of 1933, as amended (the “Act”). The Company has indicated in the most recent report filed by the Company with the Securities and Exchange Commission (the “Commission”) pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, that it has filed all reports required to be filed thereunder during the preceding twelve months and that it has been subject to the filing requirements thereunder for the past ninety days.

In rendering the within advice, we have reviewed (i) a copy of a Stock Purchase Agreement dated as of January 8, 2014 between Charles Brand and Echo Holdings, LLC; (ii) a copy of the broker-dealer account statement of the Holder reflecting the number of Shares owned by the Holder, (iii) a copy of a representation letter, dated January 9, 2014, executed by the Holder, and (iv) a copy of the executed letter of intent addressed to the Holder’s broker-dealer, Brill Securities, Inc., advising Brill Securities, Inc. to deliver the Shares to an account of Echo Holdings, LLC designated in writing by Echo Holdings, LLC to the Holder.

For purposes of this letter, we have assumed the authenticity of such documents, the genuineness of all signatures, the legal capacity of natural persons and the conformity to the originals of all documents submitted to us as copies. We have assumed without independent verification the accuracy of the representations as to factual matters set forth in such documents. We further assume that the Company is not and has never been a shell company as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended, and that the purchaser of the Shares is not and has never been an affiliate of the Company as defined in Rule 405 promulgated under the Securities Act of 1933, as amended.

Based on the foregoing facts and subject to the assumptions and qualifications set forth above, we advise you that no restrictive legend or other notation regarding restrictions on transfers of the Shares pursuant to the Act is required in connection with the sale and transfer of the Shares by the Holder to Echo Holdings, LLC.

The advice set forth herein is based on the federal laws of the United States as the same exist on the date hereof, and no advice is expressed as to the laws of any other jurisdiction. This letter is solely for the benefit of the addressee hereof and is not to be quoted in whole or in

part or otherwise referred to, nor is it to be filed with any governmental agency or any other person or entity, and no one other than the addressee hereof is entitled to rely on this opinion.

Very truly yours,

EX-5 6 exh5_300468.htm NOTE OPTION AGREEMENT exh5_300468.htm

EXHIBIT 5

EXECUTION COPY

NOTE OPTION AGREEMENT

NOTE OPTION AGREEMENT (this “Agreement”) dated as of January 14, 2014, between Charles S. Brand (the “Noteholder”) and Echo Holdings, LLC (the “Company”).

WHEREAS, the Noteholder and the Company desire to grant certain rights to one another pursuant to a Put/Call Agreement (the “Put/Call Agreement”) and Irrevocable Power of Attorney (the “Irrevocable Power of Attorney,” and together with the Put/Call Agreement, the “Transaction Documents”), forms of which are attached hereto as Exhibit A and Exhibit B, respectively; and

1. Consummation of Transactions. Subject to the terms and conditions of this Agreement, the Noteholder and the Company shall execute and deliver the Transaction Documents on or prior to January 21, 2014, or, if the conditions to the execution and delivery set forth in Section 2 shall not have been satisfied by such date, as soon as practicable after such conditions shall have been satisfied..

2. Conditions. (a) The Company’s Obligation. The obligation of the Company to execute and deliver the Transaction Documents is subject to the satisfaction (or waiver by the Company) of the following conditions:

(i) The representations and warranties of the Noteholder in this Agreement and in Exhibit A of the Put/Call Agreement shall be true and correct in all respects.

(ii) No statute, rule, regulation, executive order, decree, temporary restraining order, preliminary or permanent injunction or other order enacted, entered, promulgated, enforced or issued by any Federal, state, local or foreign government or any court of competent jurisdiction, administrative agency or commission or other governmental authority or instrumentality, domestic or foreign (a “Governmental Entity”) or other legal restraint or prohibition preventing the execution and delivery of the Transaction Documents shall be in effect.

(iii) The Company’s satisfactory completion of its due diligence with respect to EMRISE Corporation and its affiliates.

(b) The Noteholder’s Obligation. The obligation of the Noteholder to execute and deliver the Transaction Documents is subject to the satisfaction (or waiver by the Noteholder) of the following conditions:

(i) The representations and warranties of the Company in this Agreement shall be true and correct in all respects.

(ii) No statute, rule, regulation, executive order, decree, temporary restraining order, preliminary or permanent injunction or other order enacted, entered, promulgated, enforced or issued by any Governmental Entity or other legal restraint or prohibition preventing the execution and delivery of the Transaction Documents shall be in effect.

(iii) The Noteholder’s receipt of an executed copy of the Guaranty (the “Guaranty”), a form of which is attached hereto as Exhibit C.

3. Representations and Warranties of the Noteholder. The Noteholder hereby represents and warrants to the Company as follows:

(a) Authority. The Noteholder has all requisite power and authority to enter into the this Agreement, to perform his obligations hereunder and to consummate the transactions contemplated hereby. This Agreement has been duly executed and delivered by the Noteholder and constitutes a legal, valid and binding obligation of the Noteholder, enforceable against the Noteholder in accordance with its terms.

(b) No Conflicts; Consents. The execution and delivery of this Agreement by the Noteholder do not, and the consummation of the transactions contemplated hereby and compliance with the terms hereof will not, conflict with, or result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancelation or acceleration of any obligation or to loss of a material benefit under, or result in the creation of any lien (statutory or other), claim, encumbrance, mortgage, security interest, community property interest, option, charge pledge, condition, equitable interest, right of first refusal, or restriction of any kind on the Note or, including any restriction on the voting, transfer, receipt of income or exercise of any other attribute of ownership of the Note (collectively, “Encumbrances”) under, any provision of (i) any contract, commitment, agreement or arrangement to which the Noteholder is a party or by which the Note is bound or (ii) any judgment, order or decree, or statute, law, ordinance, rule or regulation applicable to the Noteholder or the Note. No consent, approval, license, permit, order or authorization of, or registration, declaration or filing with, any Governmental Entity is required to be obtained or made by or with respect to the Noteholder in connection with the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby.

4. Representations and Warranties of the Company. The Company hereby represents and warrants to the Noteholder as follows:

(a) Organization and Standing. The Company is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation.

(b) Authority. The Company has all requisite power and authority to enter into this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. All acts and other proceedings required to be taken by the Company to authorize the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby have been duly and properly taken. This Agreement has

been duly executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms.

(c) No Conflicts; Consents. The execution and delivery of this Agreement by the Company do not, and the consummation of the transactions contemplated hereby and compliance with the terms hereof will not, conflict with, or result in any violation of or default (with or without notice or lapse of time, or both) under, any provision of (i) the organizational documents, of the Company, (ii) any contract, commitment, agreement or arrangement to which the Company is a party or by which its properties or assets are bound, or (iii) any judgment, order, or decree, or statute, law, ordinance, rule or regulation applicable to the Company or its properties or assets. No consent, approval, license, permit, order or authorization of, or registration, declaration or filing with, any Governmental Entity is required to be obtained or made by or with respect to the Company in connection with the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby.

5. Termination. (a) Anything contained herein to the contrary notwithstanding, this Agreement may be terminated and the transactions contemplated hereby abandoned at any time prior to the consummation of the transactions contemplated by this Agreement:

(i) by mutual written consent of the Noteholder and the Company;

(ii) by the Company if any of the conditions set forth in Section 2(a) shall have become incapable of fulfillment, and shall not have been waived by the Company;

(iii) by the Noteholder if any of the conditions set forth in Section 2(b) shall have become incapable of fulfillment, and shall not have been waived by the Noteholder; or

(iv) by either party hereto if transactions contemplated by this Agreement shall not have occurred by the close of business on February 18, 2014;

provided, however, that the party seeking termination pursuant to clause (ii) or (iii) is not in breach of any of its representations, warranties, covenants or agreements contained in this Agreement.

(b) If this Agreement is terminated and the transactions contemplated hereby are abandoned as described in this Section 5, this Agreement shall become void and of no further force or effect.

6. Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more such counterparts have been signed by each of the parties and delivered to the other party. Transmission of such counterparts by email of PDFs shall constitute effective delivery.

7. Severability. If any provision of this Agreement (or any portion thereof) or the application of any such provision (or any portion thereof) to any person or circumstance shall be held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision hereof (or the

remaining portion thereof) or the application of such provision to any other persons or circumstances.

8. Consent to Jurisdiction. The Company and the Noteholder irrevocably submit to the exclusive jurisdiction of (a) the Supreme Court of the State of New York, New York County, and (b) the United States District Court for the Southern District of New York, for the purposes of any suit, action or other proceeding arising out of this Agreement or any transaction contemplated hereby. The Company and the Noteholder agree to commence any action, suit or proceeding relating hereto either in the United States District Court for the Southern District of New York or if such suit, action or other proceeding may not be brought in such court for jurisdictional reasons, in the Supreme Court of the State of New York, New York County. The Company and the Noteholder further agree that service of any process, summons, notice or document by U.S. registered mail to such party’s respective address set forth above shall be effective service of process for any action, suit or proceeding in New York with respect to any matters to which it has submitted to jurisdiction in this Section 18. The Company and the Noteholder irrevocably and unconditionally waive any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby in (i) the Supreme Court of the State of New York, New York County, or (ii) the United States District Court for the Southern District of New York, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

9. Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York applicable to agreements made and to be performed entirely within such State, without regard to the conflicts of law principles of such State.

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the date first written above.

	/s/ Charles S. Brand
	Charles S. Brand


	ECHO HOLDINGS, LLC


	By:	/s/ David J. Brand
	Name: David J. Brand
	Title: Managing Member