EMRISE Corporation Announces Material Modification
Credit Agreement Through June 30, 2010
Allows Company Sufficient Time to Sell Assets With Intent to Repay Debt Obligations in Full
January 25, 2010 03:13 PM Eastern Time
EATONTOWN, N.J.--(EON: Enhanced Online News)--EMRISE CORPORATION (NYSE Arca: ERI) today announced th
into a material modification to its credit agreement with its primary lender through June 30, 2010.
In December 2009, the Company did not raise any capital in an equity offering as required by the Credit Agreement and, further, b
not be, at December 31, in compliance with a number of the financial covenants in the Credit Agreement, including minimum EBITD
leverage ratio and minimum liquidity. Based on these anticipated events of default, the Borrowers and the Lender began discussions
for payment and a long-term forbearance. During such discussions, the Borrowers and Lender entered into two short-term forbeara
each of which was announced by the Company and described in Current Reports on Form 8-K filed with the Commission.
On January 25, 2010, the Borrowers and the Lender entered into Amendment Number 8 to Loan Documents (“Amendment 8”), w
Credit Agreement as of December 31, 2009. Amendment 8 retroactively removes the requirement to conduct an equity raise that w
otherwise triggered a default, and certain financial covenants that may have triggered a default, reduces the monthly principal payme
January 1, 2010 and through June 30, 2010 (the “Maturity Date”), and requires the sale of certain assets of the Borrowers.
More specifically, Amendment 8 provides for the following amendments to the Credit Agreement: The financial covenants related to
EBITDA, maximum leverage ratio and minimum liquidity, as well as the requirement to raise capital through the issuance of the Com
stock, have been retroactively deleted and removed as ongoing obligations of the Borrowers. Amendment 8 does not remove or alt
capital expenditure financial covenants. Lender has the right, after February 25, 2010,