<PAGE>

EXHIBIT 10.1

                         EXECUTIVE EMPLOYMENT AGREEMENT
                         ------------------------------


         THIS EXECUTIVE EMPLOYMENT AGREEMENT (the "AGREEMENT") dated effective
as of May 16, 2007 ("EFFECTIVE Date"), is made and entered into by and between
EMRISE CORPORATION, a Delaware corporation ("EMPLOYER"), and JOHN DONOVAN
("EXECUTIVE").

                                 R E C I T A L S
                                 ---------------

         Employer desires that the Executive enter into an employment
relationship with Employer in order to provide the necessary leadership and
senior management skills that are important to the success of Employer. Employer
believes that obtaining the Executive's services as an employee of Employer and
the benefits of his business experience are of material importance to Employer
and Employer's stockholders.

                                A G R E E M E N T
                                -----------------

         NOW, THEREFORE, in consideration of Executive's employment by Employer
and the mutual promises and covenants contained herein, the receipt and
sufficiency of which is hereby acknowledged, Employer and Executive intend by
this Agreement to specify the terms and conditions of Executive's employment
relationship with Employer.

1.       GENERAL DUTIES OF EMPLOYER AND EXECUTIVE.
         -----------------------------------------

         1.1 Employer agrees to employ Executive and Executive agrees to accept
employment by Employer and to serve Employer in an executive capacity upon the
terms and conditions set forth herein. Employer hereby employs Executive as the
Vice President Finance and Administration, Secretary and Treasurer as of the
Effective Date, reporting to the President and Chief Executive Officer (the
"CEO").Executive shall serve as Employer's principal accounting and financial
officer. Executive's duties and responsibilities shall be those normally assumed
by the principal accounting and financial officer, Vice President Finance and
Administration, Secretary and Treasurer of a publicly-owned company similarly
situated to Employer, as well as such other or additional duties, as may from
time-to-time be assigned to Executive by the CEO, which Employer anticipates
will include, among other things, serving as an officer or director of
Employer's domestic subsidiaries. Such other or additional duties shall be
consistent with the senior executive functions set forth above.

         1.2 While employed hereunder, Executive shall use his best efforts to
obey the lawful directions of the CEO. Executive shall also use his best efforts
to promote the interests of Employer and to maintain and to promote the
reputation of Employer. While employed hereunder, Executive shall devote his
full business time, efforts, skills and attention to the affairs of Employer and
faithfully perform his duties and responsibilities hereunder.

         1.3 While this Agreement is in effect, Executive may from time to time
engage in any activities that do not compete directly with Employer, provided
that such activities do not interfere with his performance of his duties.
Executive shall be permitted to (i) invest his personal assets as a passive
investor in such form or manner as Executive may choose in his discretion, (ii)
participate in various charitable efforts, and (iii) serve as a member of the
Board of Directors of other corporations which are not competitors of Employer.

                                       1

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2.       COMPENSATION AND BENEFITS.
         --------------------------

         2.1 As compensation for his services to Employer, Employer shall pay to
Executive an annual base salary of $223,000 during the first 12-month period
that this Agreement is in effect, payable in equal semimonthly payments in
accordance with the Employer's regular payroll policy for salaried employees
(the "SALARY"). At the end of the first twelve months of employment the
Executive shall receive an increase to his annual base salary of 10% from
$223,00 to $245,300. In the years thereafter, the Compensation Committee (the
"COMPENSATION COMMITTEE") of the Board of Directors of Employer (the "BOARD")
shall perform an annual review of the Executive's Salary based on a review of
Executive's performance of his duties prepared by Employer's President and Chief
Executive Officer and Employer's other compensation policies. The Compensation
Committee may, at its sole discretion, increase (but not decrease) the Salary at
any time, and from time to time, after the first 12-month period that this
Agreement is in effect.

         2.2 Executive shall be eligible for Additional Cash Compensation in the
total amount of up to $20,000 during the first year of his employment. If
earned, the Additional Cash Compensation would be payable in 6-month increments
of $10,000. The Additional Cash Compensation shall be earned and awarded based
solely upon the CEO's determination, in his absolute discretion, whether
Executive met mutually agreed upon objectives for each 6-month period.

         2.3 Executive shall be eligible for an Incentive Bonus, payable no
later than the date Employer's Form 10-K for the previous fiscal year is filed
with the Securities and Exchange Commission, based on criteria determined by the
Compensation Committee, at its sole discretion; provided, however, that
Executive shall not be eligible for an Incentive Bonus for fiscal years 2007 and
2008. Executive be eligible for a partial bonus in 2008 based solely upon the
CEO's determination in his absolute discretion.

         2.4 Upon Executive's furnishing to Employer customary and reasonable
documentary support (such as receipts or paid bills) evidencing costs and
expenses incurred by him in the performance of his services and duties hereunder
(including, without limitation, travel and entertainment and cellular telephone
expenses) and containing sufficient information to establish the amount, date,
place and essential character of the expenditure, Executive shall be reimbursed
for such costs and expenses in accordance with Employer's normal expense
reimbursement policy.

         2.5 In recognition of Executive's intention to, and Employer's desire
that Executive will, participate in 40 hours each year of continuing
professional education and certification requirements as a Certified Public
Accountant, Employer shall reimburse Executive for up to $5,000 per year for
reasonable and properly documented expenses incurred by Executive for such
continuing professional education.

                                       2

<PAGE>

         2.6 Executive shall be entitled to participate in the medical
(including hospitalization) and dental to the extent offered by Employer, and in
amounts consistent with the Employer's policy, for other senior executive
officers of Employer, with premiums for all such insurance for Executive and his
dependents to be paid by Employer. In lieu of participating in Employer's life
and long term disability insurance plans, Executive shall be entitled to payment
of $1,100 per year to be used by Executive to maintain Executive's exiting life
and long term disability insurance plans.

         2.7 Executive shall have the right to participate in any additional
compensation, benefit, pension, stock option, 401(k) or other plan or
arrangement of Employer now or hereafter existing for the benefit of other
senior executive officers of Employer.

         2.8 Executive shall be entitled to vacation (but in no event less than
three weeks per year), holiday and other paid or unpaid leaves of absence
consistent with Employer's normal policies for other senior executive officers
of Employer or as otherwise approved by the Board.

         2.9 During Executive's active employment with Employer, Executive shall
be provided a monthly car allowance in the amount of $600.00.

         2.10 Subject to the approval of the Compensation Committee, which
Employer has obtained, Employer will grant Executive a nonqualified stock option
to purchase up to 50,000 shares of Employer's common stock (the "Option") under
Employer's Amended and Restated 2000 Stock Option Plan (the "Plan"). Employer
may impose such terms and conditions with respect to such Option as it considers
necessary or advisable; provided that such Option will be granted 50% on the
Effective Date and the remaining 50% on July 2, 2007, so that the Option shall
be fully granted by July 2, 2007. The Option shall be granted only if Executive
is actively employed with Employer on each such grant date. Each 50% portion of
the Option shall not vest until twelve months after the date such portion of the
Option was granted. The exercise price of each portion of the Option shall be
equal to the closing market price of Employer's common stock on the date such
portion of the Option is granted. The Option shall be governed by and be subject
to the terms of the Plan and any applicable option grant agreement.

         2.11 Employer shall maintain insurance to insure its executive officers
and directors, including Executive, against claims arising out of an alleged
wrongful act by those officers and directors, including Executive, while acting
as a director or officer of Employer. Employer shall further indemnify Executive
to the fullest extent permitted by law against any loss or liability incurred by
Executive as a result of his service as an officer or employee of Employer,
except to the extent any such loss or liability is the result of Executive's
gross negligence or willful misconduct.

3.       PRESERVATION OF BUSINESS; FIDUCIARY RESPONSIBILITY.
         ---------------------------------------------------

         Executive shall use his best efforts to preserve the business and
organization of Employer and to preserve the business relations of Employer. So
long as Executive is employed by Employer, Executive shall observe and fulfill
proper standards of fiduciary responsibility attendant upon his service and
office.

                                       3

<PAGE>

4.       TERM.
         -----

         The term of this Agreement shall commence on the Effective Date and
shall end on the second anniversary of the Effective Date, subject to earlier
termination as set forth in SECTION 5; PROVIDED, HOWEVER, that this Agreement
shall automatically renew for successive one (1) year periods unless, at least
ninety (90) days prior to the expiration of the initial term or any renewal
term, either party gives written notice to the other of his or its intention not
to renew.

5.       TERMINATION OTHER THAN BY EXPIRATION OF THE TERM.
         -------------------------------------------------

         Employer or Executive may terminate Executive's employment under this
Agreement at any time, but only on the following terms:

         5.1 Employer may terminate Executive's employment under this Agreement
at any time for "Due Cause" (as defined in APPENDIX I attached hereto and
incorporated herein by this reference) upon the good faith determination by the
Board that Due Cause exists for the termination of the employment relationship.

         5.2 If Executive is incapacitated by accident, sickness or otherwise so
as to render Executive mentally or physically incapable of performing the
services required under SECTION 1 of this Agreement for a period of 180
consecutive days, and the incapacity is confirmed by the written opinion of two
practicing medical doctors licensed by and in good standing in the State of
California (one selected by Employer and one by Executive), upon the expiration
of that period or at any time reasonably thereafter, Employer may terminate
Executive's employment under this Agreement upon giving Executive or his legal
representative written notice at least 30 days prior to the termination date,
subject to the provisions of SECTION 6.2. Executive agrees, after written notice
by the Board, to submit to examinations by the practicing medical doctors. If
the medical doctors do not agree as to whether Executive is disabled, they shall
promptly select a mutually acceptable third practicing medical doctor to further
evaluate Executive, whose conclusion shall be rendered, in writing, within ten
days of his or her selection. The conclusion of the third practicing medical
doctor shall be final and binding on Employer and Executive.

         5.3 This Agreement shall terminate immediately upon Executive's death,
subject to the provisions of SECTION 6.2.

         5.4 Subject to the provisions of SECTION 6.3, Employer may terminate
Executive's employment under this Agreement at any time for any reason
whatsoever, even without Due Cause, by giving a written notice of termination to
Executive, in which case the employment relationship shall terminate immediately
upon the giving of the notice. If Employer terminates the employment of
Executive other than (i) pursuant to SECTION 5.1 for Due Cause, (ii) due to
incapacity pursuant to SECTION 5.2 or due to Executive's death pursuant to
SECTION 5.3, or (iii) Executive's retirement, then the action by Employer,
unless consented to in writing by Executive, shall be deemed to be a
constructive termination by Employer of Executive's employment (a "CONSTRUCTIVE
TERMINATION"), and, in that event, Executive shall be entitled to receive the
compensation set forth in SECTION 6.3.

         5.5 Executive may terminate this Agreement at any time for "Good
Reason" (as defined in APPENDIX I attached hereto and incorporated herein by
this reference) within 30 days after Executive learns of the event or condition
constituting "Good Reason" and, in that event, shall be entitled to receive the
compensation set forth in SECTION 6.3.

                                       4

<PAGE>

6.       EFFECT OF TERMINATION.
         ----------------------

         6.1 If the employment relationship is terminated (a) by Employer for
Due Cause pursuant to SECTION 5.1 or (b) by Executive breaching this Agreement
by refusing to continue his employment, or (c) by Executive without Good Reason,
then all compensation and benefits shall cease as of the date of termination,
other than: (i) those benefits that are provided by retirement and benefit plans
and programs specifically adopted and approved by Employer for Executive that
are earned and vested by the date of termination; (ii) Executive's pro rata
annual Salary (as in effect as of the date of termination, payable in the manner
as prescribed in the first sentence of SECTION 2.1) through the date of
termination; (iii) any stock options which have vested as of the date of
termination pursuant to the terms of the agreement granting the options; and
(iv) accrued vacation as required by California law.

         6.2 If Executive's employment relationship is terminated due to
Executive's incapacity pursuant to SECTION 5.2 or due to Executive's death
pursuant to SECTION 5.3, Executive or Executive's estate or legal
representative, will be entitled to (i) those benefits that are provided by
retirement and benefits plans and programs specifically adopted and approved by
Employer for Executive that are earned and vested at the date of termination,
(ii) a prorated Incentive Bonus (to the extent Executive would otherwise be
eligible) for the fiscal year in which incapacity or death occurs, and (iii)
continue to receive the annual Salary compensation as set forth in Section
6.3(b) below, offset, however, by any payments received by Executive as a result
of any disability insurance maintained by Employer for Executive's benefit.

         6.3 In the event of a termination of this Agreement as a result of
Constructive Termination, or by Executive for Good Reason, then Employer shall:

                  (a) pay to Executive on the date of termination his Salary in
         effect as of the date of termination through the end of the month
         during which the termination occurs plus credit for any vacation earned
         but not taken;

                  (b) continue Executive's Salary, payable in accordance with
         Employer's normal payroll practices, as follows: for three months if
         the termination is within the first six months after the Effective
         Date; for six months if the termination is within the second six-month
         period after the Effective Date; for twelve months if the termination
         is any time after the first anniversary of the Effective Date;

                  (c) pay to Executive the prorated Incentive Bonus, to the
         extent Executive would otherwise be eligible for any, for the fiscal
         year during which termination occurs, payable if and when the
         Compensation Committee determines to award such bonuses to other
         executives, as provided in Section 2.3; and

                  (d) maintain, at Employer's expense, in full force and effect,
         for Executive's continued benefit, all medical and life insurance to
         which Executive and his dependents were entitled immediately prior to
         the date of termination (or at the election of Executive in the event
         of a Change in Control, immediately prior to the date of the Change in
         Control) until the earliest of (i) 18 months or (ii) the date or dates
         that Executive's continued participation in Employer's medical and/or


                                       5

<PAGE>

         life insurance plans, as applicable, is not possible under the terms of
         the plans (the earliest of (i) and (ii) is referred to herein as the
         "BENEFITS DATE"). If Employer's medical and/or life insurance plans do
         not allow Executive's continued participation in the plan or plans,
         then Employer will pay to Executive, in monthly installments, from the
         date on which Executive's participation in the medical and/or life
         insurance, as applicable, is prohibited until the date that is 18
         months after the date of termination, the monthly premium or premiums
         which had been payable by Employer with respect to Executive for the
         discontinued medical and/or life insurance, as applicable.

                  (e) Executive shall be entitled to the continued Salary
         payments, pro-rated Incentive Bonus and benefits described in
         subsections 6.3(b), (c) and (d) only if Executive signs an appropriate
         separation agreement in a form acceptable to Employer, which includes a
         release of all claims against Employer to the fullest extent permitted
         by law, and Executive complies fully with any continuing obligations
         under this Agreement.

         6.4 Executive shall not be required to mitigate damages or the amount
of any payment provided for under this Agreement by seeking other employment or
otherwise, nor shall the amount of any payment provided for under this Agreement
be reduced by any compensation earned by Executive as the result of employment
by another Employer after the date of termination, or otherwise.

         6.5 Except as expressly provided herein, the provisions of this
Agreement, and any payment or benefit provided for hereunder, shall not reduce
any amounts otherwise payable, or in any way diminish Executive's existing
rights, or rights which would accrue solely as a result of the passage of time,
under any Employer benefit plan, employment agreement or other contract, plan or
arrangement.

         6.6 The amount of any payment provided under this Agreement shall not
be reduced by reason of any present value calculation.

         6.7 Upon termination of this Agreement, compensation and benefits shall
be paid to the Executive as set forth in the applicable subsection of this
SECTION 6 and stock options granted to Executive, if any, shall be governed by
the provisions of all stock option agreements between Employer and Executive. In
the event of a termination of this Agreement by Executive for Good Reason, all
other rights and benefits Executive may have under the employee and/or executive
benefit plans and arrangements of Employer generally shall be determined in
accordance with the terms and conditions of those plans and arrangements.

7.       COVENANTS OF CONFIDENTIALITY, NONDISCLOSURE AND NONCOMPETITION.
         ---------------------------------------------------------------

         7.1 During the term of this Agreement, Employer will provide to
Executive certain confidential and proprietary information owned by Employer as
more fully described below. Executive acknowledges that he occupies or will
occupy a position of trust and confidence with Employer, and that Employer would
be irreparably damaged if Executive were to breach the covenants set forth in
this SECTION 7.1. Accordingly, Executive agrees that he will not, without the
prior written consent of Employer, at any time during the term of this Agreement
or any time thereafter, except as may be required by competent legal authority


                                       6

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or as required by Employer to be disclosed in the course of performing
Executive's duties under this Agreement for Employer, use or disclose to any
person, firm or other legal entity, any confidential records, secrets or
information obtained by Executive during his employment hereunder related to
Employer or any parent, subsidiary or affiliated person or entity (collectively,
"CONFIDENTIAL INFORMATION"). Confidential Information shall include, without
limitation, information about Employer's Inventions (as defined in SECTION 8.1),
customer lists and product pricing, data, know-how, formulae, processes, ideas,
past, current and planned product development, market studies, computer software
and programs, database and network technologies, strategic planning and risk
management. Executive acknowledges and agrees that all Confidential Information
of Employer and/or its affiliates will be received in confidence and as a
fiduciary of Employer. Executive will exercise utmost diligence to protect and
guard the Confidential Information.

         7.2 Executive agrees that he will not, without the express written
consent of the Board, take with him upon the termination of this Agreement, any
document or paper, or any photocopy or reproduction or duplication thereof,
relating to any Confidential Information.

         7.3 Executive agrees that he will, upon the termination of his
employment, return all Employer's property including but not limited to mobile
telephone, fuel card, personal computer, all documents, working papers,
information whether stored on computer disc or otherwise, and all other records
relating to Employer and its business. Executive agrees that he will confirm in
writing that he has complied with this clause, if requested to do so by
Employer, within seven (7) days of receipt of such a request.

         7.4 Executive agrees that, while Executive is employed with Employer,
he will not, either directly or indirectly, have an interest in any business
(whether as manager, operator, licensor, licensee, partner, 5% or greater equity
holder, employee, consultant, director, advisor or otherwise) competitive with
Employer or any of its business activities or solicit individuals or other
entities that are customers or competitors of Employer. Executive further agrees
that, for a period of 24 months after the date of termination of this Agreement
(the "RESTRICTED PERIOD"), Executive shall not use Employer's trade secrets,
either directly or indirectly, to compete in any way with the business of
Employer or to solicit individuals or other entities that are customers or
competitors of Employer during the six-month period immediately prior to the
date of termination of this Agreement, to terminate or change their contracts or
business relations with Employer. Executive also agrees that, for the Restricted
Period, he will not, either directly or indirectly, solicit any employee of
Employer to terminate his employment with Employer.

         7.5 For purposes of this SECTION 7, "EMPLOYER" shall include any of its
subsidiaries or any other entity in which it holds a 50% or greater equity
interest.

8.       INVENTIONS.
         -----------

         8.1 Any and all inventions, product, discoveries, improvements,
processes, formulae, manufacturing methods or techniques, designs or styles,
software applications or programs (collectively, "INVENTIONS") made, developed
or created by Executive, alone or in conjunction with others, during regular
hours of work or otherwise, during the term of Executive's employment with
Employer and for a period of two years thereafter that may be directly or


                                       7

<PAGE>

indirectly related to the business of, or tests being carried out by, Employer,
or any of its subsidiaries, shall be promptly disclosed by Executive to Employer
and shall be Employer's exclusive property. The following provisions of the
California Labor Code shall supplement this SECTION 8.1:

                    SECTION 2870 OF THE CALIFORNIA LABOR CODE

        APPLICATION OF PROVISIONS PROVIDING THAT EMPLOYEE SHALL ASSIGN OR
        -----------------------------------------------------------------
                OFFER TO ASSIGN RIGHTS IN INVENTION TO EMPLOYER.
                ------------------------------------------------

                           (a) Any provision in an employment agreement which
                  provides that an employee shall assign, or offer to assign,
                  any of his or her rights in an invention to his or her
                  employer shall not apply to an invention that the employee
                  developed entirely on his or her own time without using
                  employer's equipment, supplies, facilities, or trade secret
                  information except for those inventions that either:

                                    (1) Relate at the time of conception or
                          reduction to practice of the invention to employer's
                          business, or actual or demonstrably anticipated
                          research or development of employer; or

                                    (2) Result from any work performed by the
                          employee for employer.

                           (b) To the extent a provision in an employment
                  agreement purports to require an employee to assign an
                  invention otherwise excluded from being required to be
                  assigned under subdivision (a), the provision is against the
                  public policy of this state and is unenforceable.

         8.2 Executive will, upon Employer's request and without additional
compensation, execute any documents necessary or advisable in the opinion of
Employer's legal counsel to direct the issuance of patents to Employer with
respect to Inventions that are to be Employer's exclusive property under this
SECTION 8 or to vest in Employer title to the Inventions; the expense of
securing any patent, however, shall be borne by Employer.

         8.3 Executive will hold for Employer's sole benefit any Invention that
is to be Employer's exclusive property under this SECTION 8 for which no patent
is issued.

9.       NO VIOLATION.
         -------------

         Executive represents that he is not bound by any Agreement with any
former employer or other party that would be violated by Executive's employment
by Employer.

                                       8

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10.      INJUNCTIVE RELIEF.
         ------------------

         Executive acknowledges that the breach, or threatened breach, by
Executive of the provisions of this Agreement shall cause irreparable harm to
Employer, which harm cannot be fully redressed by the payment of damages to
Employer. Accordingly, Employer shall be entitled, in addition to any other
right or remedy it may have at law or in equity, to seek an injunction or
restraining Executive from any violation or threatened violation of this
Agreement.

11.      DISPUTE RESOLUTION.
         -------------------

         Subject to SECTION 10, all claims, disputes and other matters in
controversy ("DISPUTE") arising, directly or indirectly out of or related to
this Agreement, or the breach thereof, whether contractual or noncontractual,
and whether during the term or after the termination of this Agreement, shall be
resolved exclusively according to the procedures set forth in this SECTION 11,
and not through resort to any judicial proceedings.

         11.1 Neither party shall commence an arbitration proceeding pursuant to
the provisions of SECTION 11.2 unless that party first gives a written notice (a
"DISPUTE NOTICE") to the other party setting forth the nature of the dispute.
The parties shall attempt in good faith to resolve the dispute by mediation
under the American Arbitration Association Commercial Mediation Rules in effect
on the date of the Dispute Notice. If the parties cannot agree on the selection
of a mediator within 20 days after delivery of the Dispute Notice, the mediator
will be selected by the American Arbitration Association. If the dispute has not
been resolved by mediation within 60 days after delivery of the Dispute Notice,
then the dispute shall be determined by arbitration in accordance with the
provisions below.

         11.2 Any dispute that is not settled by mediation as provided in
SECTION 11.1 shall be resolved by arbitration in Riverside County, California,
before a single arbitrator appointed by the American Arbitration Association or
its successor. The determination of the arbitrator shall be final and absolute.
The arbitrator shall be governed by the duly promulgated rules and regulations
of the American Arbitration Association or its successor then in effect, and the
pertinent provisions of the laws of the State of California relating to
arbitration. The decision of the arbitrator may be entered as a final judgment
in any court of the State of California or elsewhere. The prevailing party in
any such arbitration shall also be entitled to recover reasonable attorneys',
accountants' and experts' fees and costs of suit in addition to any other relief
awarded the prevailing party.

12.      MISCELLANEOUS.
---      --------------

         12.1 If any provisions contained in this Agreement is for any reason
held to be totally invalid or unenforceable, such provision will be fully
severable, and in lieu of such invalid or unenforceable provision there will be
added automatically as part of this Agreement a provision as similar in terms as
may be valid and enforceable.

         12.2 All notices and other communications required or permitted
hereunder or necessary or convenience in connection herewith shall be in writing
and shall be deemed to have been given when mailed by registered mail or
certified mail, return receipt requested or hand delivered, as follows (provided
that notice of change of address shall be deemed given only when received):

                                       9

<PAGE>

         If to Employer:            EMRISE Corporation
                                    9485 Haven Avenue
                                    Rancho Cucamonga, CA 91730
                                    Attention: Chief Executive Officer

         If to Executive:           John Donovan
                                    2671 Swift Court
                                    La Verne, CA  91750

or to such other names or addresses as Employer or Executive, as the case may
be, shall designate by notice to the other party hereto in the manner specified
in this SECTION 12.2.

         12.3 This Agreement shall be binding upon and inure to the benefit of
Employer, its successors, legal representatives and assigns, and Executive, his
heirs, executors, administrators, representatives, legatees and permitted
assigns. Executive agrees that his rights and obligations hereunder are personal
to him and may not be assigned without the express written consent of Employer.
If Executive should die while any amounts are due to him pursuant to this
Agreement, all such amounts shall be paid to Executive's devisee, legatee or
other designee, or if there be no such designee, to Executive's estate. Employer
will require any successor or assign (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of Employer, by Agreement in form and substance satisfactory to
Executive and his legal counsel, expressly, absolutely and unconditionally to
assume and agree to perform this Agreement in the same manner and to the same
extent that Employer would be required to perform each of them if no such
succession or assignment had taken place. Any failure of Employer to obtain such
Agreement prior to the effectiveness of any such succession or assignment shall
be a material breach of this Agreement and shall entitle Executive to terminate
Executive's employment for Good Reason. As used in this Agreement, "EMPLOYER"
means EMRISE Corporation and any successor or assign to its business and/or
assets which executes and delivers the Agreement provided for in this Section or
which otherwise becomes bound by all the terms and provisions of this Agreement
by operation of law. If at any time during the term of this Agreement Executive
is employed by any company a majority of the voting securities of which is then
owned by Employer, "EMPLOYER" as used in this Agreement shall in addition
include that subsidiary company. In that event, Employer agrees that it shall
pay or shall cause the subsidiary company to pay any amounts owed to Executive
pursuant to this Agreement.

         12.4 This Agreement replaces and merges all previous agreements and
discussions relating to the same or similar subject matters between Executive
and Employer with respect to the subject matter of this Agreement. This
Agreement may not be modified in any respect by any verbal statement,
representation or agreement made by any employee, officer, or representative of
Employer or by any written agreement unless signed by an officer of Employer who
is expressly authorized by Employer to execute that document.

                                       10

<PAGE>

         12.5 The laws of the State of California will govern the
interpretation, validity and effect of this Agreement without regard to
principles of conflicts of law, the place of execution or the place for
performance thereof.

         12.6 Executive and Employer shall execute and deliver any and all
additional instruments and agreements that may be necessary or proper to carry
out the purposes of this Agreement.

         12.7 The descriptive headings of the several sections of this Agreement
are inserted for convenience only and do not constitute a party of this
Agreement.

         12.8 This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same Agreement.

         12.9 Executive acknowledges that Executive has had the opportunity to
read this Agreement and discuss it with advisors and legal counsel, if Executive
has so chosen. Executive also acknowledges the importance of this Agreement and
that Employer is relying on this Agreement in entering into an employment
relationship with Executive.


                                       11

<PAGE>


         The undersigned, intending to be legally bound, have executed this
Agreement on the date first written above.

                                   EMRISE CORPORATION



Date: March 21, 2007               By:      /S/ CARMINE T. OLIVA
                                        ----------------------------------------
                                        Carmine T. Oliva,
                                        President and Chief Executive Officer



Date: March 23, 2007                        /S/ JOHN DONOVAN
                                        ----------------------------------------
                                        John Donovan





                                       12

<PAGE>

                                   APPENDIX I

                             ADDITIONAL DEFINITIONS
                             ----------------------

         For purposes of this Agreement, the following additional capitalized
terms shall have the respective definitions set forth below:

         BENEFIT PLAN. The term "BENEFIT PLAN" means any benefit plan or
arrangement (including, without limitation, Employer's profit sharing or stock
option plans, if any, and medical, disability and life insurance plans) in which
Executive is participating (or any other plans providing Executive with
substantially similar benefits).

         CHANGE IN CONTROL. A "CHANGE IN CONTROL" of Employer shall be deemed to
have occurred if (A) there shall be consummated any consolidation or merger of
Employer in which Employer is not the continuing or surviving corporation or
pursuant to which all or substantially all of the shares of Employer's common
stock would be converted into cash, securities or other property, other than a
merger of Employer in which the holders of Employer's common stock immediately
prior to the merger have the same proportionate ownership of common stock of the
surviving corporation immediately after the merger; (B) there shall be
consummated any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all, or substantially all, of the assets of
Employer; (C) the stockholders of Employer approve any plan or proposal for the
liquidation or dissolution of Employer; (D) any "person" (as such term is used
in Sections 13(d) and 14(d) (2) of the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT")), other than "persons" who are stockholders of
Employer on the date of this Agreement, becomes the beneficial owner (within the
meaning of Rule 13d-3 under the Exchange Act) of 50% or more of Employer's
outstanding common stock after the date hereof; (E) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the entire Board shall cease for any reason to constitute a majority thereof
unless the election, or the nomination for election by Employer's stockholders,
of each new director was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of the
period; or (F) there shall be any change of control of a nature required to be
reported in response to Item 6 (e) of Schedule 14A of Regulation 14A promulgated
under the Exchange Act or any successor regulation of substantially similar
import, regardless of whether Employer is subject to such reporting requirement.



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<PAGE>

         DUE CAUSE. The term "DUE CAUSE" means any of the following events:

                  (a) any intentional misapplication by Executive of Employer's
         funds or other material assets, or any other act of dishonesty
         injurious to Employer committed by Executive; or

                  (b) Executive's conviction of (i) a felony or (ii) a crime
         involving moral turpitude; or

                  (c) Executive's use or possession of any controlled substance
         or chronic abuse of alcoholic beverages, which use or possession the
         Board reasonably determines renders Executive unfit to serve in his
         capacity as a senior executive of Employer; or

                  (d) Executive's breach, nonperformance or nonobservance of any
         of the terms of this Agreement, including but not limited to
         Executive's failure to adequately perform his duties or comply with the
         reasonable directions of the Board.

         Notwithstanding anything in the foregoing subsections (c) or (d) to the
contrary, Employer shall not terminate Executive under subsections (c) or (d)
unless the Board first provides Executive with a written memorandum describing
in detail how his performance hereunder is not satisfactory and Executive is
given a reasonable period of time (not less than 30 days) to remedy the
unsatisfactory performance related by the Board to Executive in that memorandum.
A determination of whether Executive has satisfactorily remedied the
unsatisfactory performance shall be promptly made by a majority of the
disinterested directors of the Board at the end of the period provided to
Executive for remedy and their determination shall be final.



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                                      I-2


<PAGE>

         GOOD REASON. The term "GOOD REASON" as used in this Agreement shall
mean any of the following which occur without Executive's written consent:

                  (a) a purported reduction by Employer in Executive's base
         salary to an amount less than the greater of (i) the base salary as in
         effect on the date hereof or (ii) 10% below the base salary in effect
         at the time of the purported reduction;

                  (b) a requirement by Employer that Executive perform his
         duties at a location beyond a reasonable commuting distance from the
         existing Corporation Office;

                  (c) any failure by Employer to obtain the assumption of this
         Agreement by any successor or assign of Employer;

                  (d) a failure by Employer to comply with any material
         provision of this Agreement which has not been cured within 30 days
         after written notice of noncompliance has been given by Executive to
         Employer, or if the failure is not capable of being cured in that time,
         a cure shall not have been diligently initiated by Employer within the
         30 day period;

                  (e) If Employer avails itself of, or is subjected by any third
         party to, a proceeding in bankruptcy in which Employer is the named
         debtor, an assignment by Employer for the benefit of its creditors, the
         appointment of a receiver for Employer, or any other proceeding
         involving insolvency or the protection of or from creditors and the
         proceeding has not been discharged or terminated within 90 days;

PROVIDED, HOWEVER, that any of the foregoing actions shall not be considered to
be Good Reason if the action is undertaken by Employer as a termination for Due
Cause.

         Notwithstanding anything in the foregoing subsections (a), (b), or (c)
to the contrary, Executive shall not have Good Reason unless Executive notifies
Employer's CEO in writing, within 30 days of the occurrence of the Good Reason,
that Executive intends to terminate his employment for such Good Reason,
specifying the Good Reason, and Employer fails to remedy the specified Good
Reason within a reasonable period of time (not less than 30 days) after receipt
of such notice.

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