Exhibit 10.1


 


May 11, 2009


 


Emrise Corporation


9485 Haven Avenue, Suite 100


Rancho Cucamonga, California 91730


Attn:  John Donovan, Vice
President Finance and Administration


 


Re:  Credit Agreement – Covenant Waivers


 


Dear Mr. Donovan:


 


Reference is made to that certain Credit Agreement,
dated as of November 30, 2007 (as amended, restated, supplemented, or
modified from time to time, the “Credit Agreement”), by and among GVEC RESOURCE IV INC. (“Agent”), as Agent and as a
Lender, EMRISE CORPORATION,  a
Delaware corporation (“Parent”), and Parent’s Subsidiaries that are
signatories hereto (collectively with Parent, “Borrowers”).  Capitalized terms, which are used herein but
not defined herein, shall have the meanings ascribed to them in the Credit
Agreement.


 


Borrowers have failed to comply with the following: (i) Sections
6.16(a), (b) and (c) of the Credit Agreement for Borrowers’
fiscal quarter end March 31, 2009, and (ii) Section 2.6(c) of
the Credit Agreement with respect to interest payments due and owing on April 1,
2009 (which amounts were subsequently paid by Borrowers in May 2009); such
failures constitute Events of Default (collectively, the “Designated Events
of Default”) under the Credit Agreement. 
Borrowers have requested that Agent waive the Designated Events of
Default on the terms and conditions set forth herein.


 


By Borrowers’ signature below, Borrowers hereby
agree to the following:


 


1.             Agent hereby waives the Designated Events of Default,
provided that Borrowers (i) execute and deliver a copy of this letter
agreement to Agent no later than the date of this letter and (ii) pay to
Lender by wire transfer in immediately available funds no later than the date
of this letter a waiver fee in the amount of $50,000.


 


2.             The waiver set forth in Section 1 of this letter is
not a waiver of any subsequent Default or Event of Default of the same
provisions of the Credit Agreement, nor is it a waiver of any other current or
future Default or Event of Default. 
Agent is not obligated to provide this or any other waiver of the
default rights of the Lender Group.


 


3.             The $50,000 waiver fee is fully earned and immediately
payable as of the date of this letter and no portion of such waiver fee shall
be refundable for any reason, or applied to the outstanding balance of the Term
Loans or any other amounts owing under the Credit Agreement.


 


4.             This letter agreement may be
executed in any number of counterparts which, when taken together, shall
constitute but one agreement.  Delivery
of an executed counterpart of this


 

















 


letter agreement by
telefacsimile shall be equally effective as delivery of a manually executed
counterpart.


 


Please indicate your
agreement to the foregoing by executing a copy of this letter agreement in the
space below.


 


	
   

  	
  GVEC RESOURCE IV INC., as Agent
  and a Lender

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Robert P. Mosier

  
	
   

  	
   

  	
  Robert P. Mosier, Receiver
  for Private Equity Management Group, Inc., Private Equity Management
  Group, LLC, and related entities and affiliates, Authorized Party

  
	
   

  	
   

  	
   

  
	
   

  	
  CONSENTED AND AGREED TO:

  
	
   

  	
   

  	
   

  
	
   

  	
  EMRISE
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ John Donovan

  
	
   

  	
  Title:

  	
  V.P. Finance and
  Administration

  
	
   

  	
   

  	
   

  
	
   

  	
  EMRISE
  ELECTRONICS CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John Donovan

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  CXR LARUS CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John Donovan

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  RO ASSOCIATES INCORPORATED

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John Donovan

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CUSTOM COMPONENTS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John Donovan

  
	
   

  	
  Title:

  	
  Treasurer

  



 


2

















 


	
   

  	
  ADVANCED CONTROL COMPONENTS,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ John Donovan

  
	
   

  	
  Title:

  	
  Treasurer

  



 


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