Document:

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                                                                    EXHIBIT 10.1

October 4, 2006

Mr. Jim O'Donnell

Dear Jim,

I am pleased to extend an offer of employment to you for the position of Vice
President of Marketing and Sales for Hines Horticulture, Inc., reporting
directly to me. The role of VP Marketing and Sales will be responsible for the
effectiveness of all marketing, sales strategy, sales, sales support, new
product development and staff development strategies and programs. You will lead
the selection, design and implementation of improvement projects with the
objective of producing direct positive profit impact. Additionally you will work
closely with me to translate the Hines vision into a corporate and business
strategy, and with our key operating executives to integrate that strategy with
other key initiatives.

I have summarized the following compensation and benefits package for your
review.

>>       Start Date                         To be determined by mutual agreement
                                            but no later than October 31, 2006
>>       Annual base salary                 $195,000
>>       Relocation assistance(1)           $50,000
>>       Leadership Incentive Bonus(2)      50% of base annual salary
>>       Leased vehicle                     Lease amount to be determined
                                            according to policy
>>       Vacation Benefits                  4 weeks per year
>>       Sick Days                          5 days per year
>>       401k eligibility                   After 1,000 hours and 12 months of
                                            service
>>       401k Entry dates are               January 1, April 1, July 1 or
                                            October 1
>>       Medical, Dental & Life             You will be eligible for medical
                                            benefits on the first of the Month
                                            following thirty days of service.

Your annual salary will be reviewed for a potential increase on January 1, 2007,
based on your performance and the company's financial results achieved in 2006.
Specific Key Result Areas will be defined during the first 60 days of your new
position.

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

(1) Amount will be paid upon relocation contingent on the relocation occurs
within 12 months of start of employment. A relocation expense repayment
agreement will require repayment of the relocation amount on a sliding-scale
reduction if you leave the company within 12 months from receiving the
relocation assistance. Additionally, the company will pay for your and your
wife's travel, lodging and meal expenses to make up to three visits to the
Houston, Texas community to support your relocation efforts.

(2) Prorated from your date of hire in 2006 (See schedule attached).

                                       1
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I look forward to your response and acceptance for this position. This offer is
valid for your acceptance until October 16, 2006 and contingent upon
satisfactory results from a pre-employment background investigation and review
of your personal references.

If you have any questions please don't hesitate to me at (949) 936-8100.

Sincerely yours,

/s/ Rob Ferguson
----------------
Rob Ferguson
President and Chief Executive Officer

Offer Accepted by: /s/ James O'Donnell                           Date: 10/12/06
--------------------------------------------------------------------------------

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--------------------------------------------------------------------------------
                         2006 Leadership Incentive Plan
                     CORPORATE RESOURCES PARTICIPANT SUMMARY
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Employee Name:                              Jim O'Donnell
Title:                                      VP Marketing and Sales
2006 Base Salary:                           $195,000
Bonus Target as a Percent of Salary:        50%
--------------------------------------------------------------------------------

2006 LEADERSHIP INCENTIVE PLAN HIGHLIGHTS:
------------------------------------------
     o    Plan participants are eligible for the Leadership Incentive payout if
          the following occur.
          o    Total Company achievement of 90% or greater of the approved 2006
               Free Cash Flow Budget
     o    The 2006 Performance metrics are as follows:
          o    Free Cash Flow with a range of 90% to 120% of budget
          o    Net Sales with a range of 95% to 120% of budget
          o    Return on sales percentage within .50% of last year's ROS %
     o    Weighting for the 2006 plan is as follows
          o    100% Company Results
          o    Free Cash Flow = 70%
          o    Net Sales = 20%
          o    Key Result Areas = 10%
     o    The Leadership Incentive Plan will remain in place unless cancelled or
          amended by the Compensation Committee and approved by the Board of
          Directors
     o    The Compensation Committee will be responsible for overall Plan
          approval, for approving performance goals (as recommended by ELT), and
          approving bonus payments based on financial results and calculated
          payments.
     o    Eligibility will be approved by the Compensation Committee based on
          ELT's recommendation and will be limited to key leadership positions
          that have a significant impact on the success of the organization.
     o    Only eligible participants who are actively employed on the last day
          of the fiscal calendar year will be eligible for a bonus payment.
     o    Bonus payments will be made no later than March 15th following the
          plan year
     o    Employees who terminate during the plan year for reasons of death,
          disability, retirement or job elimination may receive a pro-rated
          bonus share no later than March 15th following the plan year.
     o    Employees who terminate for any other reason (voluntary or
          involuntary) forfeit rights to a bonus payments for that year.

--------------------------------------------------------------------------------
Reviewed by:      /s/ Robert Ferguson                         Date: 10/4/06

Employee Signature: /s/ James O'Donnell                       Date: 10/12/06
--------------------------------------------------------------------------------

                                       3<PAGE>

EXHIBIT 10.1

CITY NATIONAL BANK

October 05, 2006

Mr. Carmine Oliva, President and CEO
EMRISE Corporation
9485 Haven Avenue Suite 100
Rancho Cucamonga, CA  91730

Dear Carmine:

We are pleased to advise you that City National Bank ("CNB") has approved the
following credit accommodations ("Facilities") on a conditional basis as
described below. This commitment letter is neither meant to be, nor shall it be
construed as, an attempt to define all of the terms and conditions involved in
this financing. Rather, it is intended only to outline certain of the basic
points of our understanding around which the final terms and documentation are
to be structured. CNB has not determined the entire range of provisions that
may be required in the final loan documentation, and therefore, further
negotiations adding to or modifying the general scope of these basic terms shall
not be precluded by the issuance of this commitment letter and its acceptance by
Borrower. Please also be advised that the borrower/guarantor structure is
subject to change pending CNB's Legal review of the corporate hierarchy. CNB's
commitment to make the credit facilities available is subject to the execution
of a definitive loan agreement and other documentation acceptable to CNB and its
counsel.

The general terms and conditions of this commitment letter and around which the
Facilities shall be structured are as set forth below.

FACILITY 1                 WORKING CAPITAL LINE OF CREDIT
----------                 ------------------------------

Borrower:                  EMRISE Corporation (and its U. S. Subsidiaries)

Amount:                    $5,000,000

Purpose:                   2 year revolving asset based line of credit for
                           working capital purposes.

Pricing:                   Floating rate option at CNB Prime + 0%; or Fixed
                           Rate Option of LIBOR + 2.50%, with terms of 1, 2, or
                           3 months and minimum increments of $500,000.
                           Indicative rates as of 10/05/06 are as follows:

                           CNB Prime: 8.25%
                           One month LIBOR (rounded to the next 1/16th):
                             5.375% + 2.50% = 7.875% all-in rate (also)
                           3 month LIBOR (rounded to the next 1/16th):
                             5.3750% + 2:50% = 7.875% all-in rate

<PAGE>

EMRISE Corporation.
ABL Commitment Letter
October 5, 2006
Page 2

Maturity:                  June 6, 2008

Borrowing Base:            Up to 85% of Eligible Account Receivables. For
                           dilution greater than 1%, advance rate shall be
                           adjusted down by 1% for every 1% or fraction thereof
                           of dilution. Dilution to be calculated monthly based
                           on a three month rolling average. Borrowing formula
                           will also include up to 30% of Eligible Raw Materials
                           and Finished Goods Inventory. Inventory not to
                           exceed 50% of outstanding principal loan balance.
                           Accounts Receivable concentrations of up to 25% may
                           be approved subject to results of ABL collateral
                           examination. Advance rates and eligibility subject to
                           be determined by City National Bank based on
                           satisfactory results from a collateral examination
                           performed on the books and records of the Borrower.

Special Features:          $5MM Asset Based Revolver will convert to a $5MM
                           "Springing" Asset Based Credit facility with advances
                           up to $2,000,000 to be available without a borrowing
                           base certificate, upon the company meeting each of
                           the following specific terms and benchmarks:
                                    o        CPA Audited re-stated year end
                                             financial statements for the fiscal
                                             years ending 12/31/04 and 12/31/05
                                    o        CPA Audited statements for the
                                             fiscal years ending 12/31/06
                                             reflecting a loss of no greater
                                             than $100,000.
                                    o        Compliance with required CNB
                                             financial loan covenants as of FYE
                                             12/31/06 and thereafter

Payment Terms:             Interest payable monthly; Principal due at maturity.

Collateral:                A security interest of first priority on all U. S.
                           domestic corporate assets.

Guarantor:                 TBD

Subordination
Of Debt:                   All obligations of Borrower to overseas affiliates
                           shall be subordinated in right of repayment to all
                           obligations of Borrower to CNB, as evidenced by and
                           subject to the terms of subordination agreements in
                           form and substance satisfactory to CNB.

Cross Default:             The $5,000,000 working capital line of credit, the
                           CNB $62,000 equipment leasing facility, and any other
                           indebtedness to be cross-defaulted.

<PAGE>

EMRISE Corporation.
ABL Commitment Letter
October 5, 2006
Page 3

General Loan Conditions:
------------------------
         o        Following the activation of the springing ABL feature of the
                  line of credit, an advance request which results in line of
                  credit outstandings which exceed the $2MM formula threshold
                  must be proceeded by the submission of a borrowing base
                  certificate to CNB no less than two days prior to the
                  requested advance. Such certificate must be compared to the
                  availability calculation which is prepared by CNB as of the
                  end of each month.
         o        Subject to an ABL collateral examination (and satisfactory
                  review by CNB) of the books and records of the Borrower. Cost
                  of the collateral examination to be paid by Borrower.
         o        Deposit of $5,000.00 to be applied to cost of ABL examination.
         o        CNB must approve all acquisitions.
         o        Existing $62M lease facility to be reserved against line of
                  credit commitment.
         o        Standard loan documentation to include representations and
                  warranties, events of default and miscellaneous provisions
                  such as are customary in CNB's documentation of facilities and
                  financings of this type.
         o        All costs associated with perfecting the lien on and security
                  interest in the collateral (i.e., UCC filing) to be paid by
                  Borrower.
         o        Loan documentation to be satisfactory to CNB and its legal
                  counsel and to contain mutually agreeable covenants and
                  conditions.
         o        CNB ABL collateral examinations required semi-annually and
                  will include at least one comprehensive examination per year.
         o        A package of terms and conditions to be determined and
                  mutually agreed to between Borrower and CNB, including but not
                  limited to, the following financial covenants:

                  a)       MINIMUM FIXED CHARGE COVERAGE RATIO
                           -----------------------------------
                           of 1.25:1 calculated on a rolling four quarter basis
                           beginning 4Qtr07 as follows: ([Net Profit after tax
                           plus Depreciation and Amortization and Interest
                           Expense) minus (non-financed Capital Expenditures
                           plus Dividends)] divided by [Current Portion of Long
                           Term Debt plus Interest Expense]) of (Requirement
                           TBD) at all times. This covenant shall be tested on a
                           Consolidated Basis; Covenant shall also be tested on
                           a Combined Basis limited to U. S. domestic
                           subsidiaries. For purposes of testing covenant
                           compliance 4Qtr06 through 3Qtr07, Company shall
                           adjust calculation(s) for non recurring legal and
                           accounting fees incurred in connection with forensic
                           audit and restatement and

                  b)       MAXIMUM BALANCE SHEET LEVERAGE RATIO
                           ------------------------------------
                           (Total Liabilities divided by Tangible Net Worth) of
                           2.00:1.00 at all times. This covenant shall be tested
                           on a Consolidated Basis; and

                  c)       MINIMUM TANGIBLE NET WORTH
                           --------------------------
                           of ($11,125,000). This covenant shall be tested on a
                           Consolidated Basis; and

                  d)       MINIMUM CURRENT RATIO
                           ---------------------
                           of 1.50:1.00. This covenant shall be tested on a
                           Consolidated Basis; and

                  e)       PROFITABILITY COVENANT:
                           -----------------------
                           No two consecutive quarterly losses; This covenant
                           shall be tested on a consolidated basis and tested on
                           the combined performance of U. S. Subsidiaries.

<PAGE>

EMRISE Corporation.
ABL Commitment Letter
October 5, 2006
Page 4

Financial Reporting Requirements:

     o     MONTHLY:        within 15 days from the end of each month, Borrower
           --------        shall submit:
                      i.   Monthly Borrowing Base Certification within 15 days
                           of month end for U. S. Subsidiaries except that
                           company shall not be required to submit a 'monthly
                           borrowing base certificate to support advances made
                           consistent with the conditions and under the
                           provisions of the non formula $2MM component of the
                           line of credit.
                      ii.  Monthly electronic submission of accounts receivable
                           and payable agings, and inventory status reports for
                           U. S. Subsidiaries.
     o    QUARTERLY:       within 45 days from the end of each quarter,
          ----------       Borrower shall submit:
                      i.   Company prepared financial statements on Consolidated
                           and Consolidating basis.

     o    ANNUALLY:        within 120 days from each fiscal year-end, Borrower
          ---------        shall submit:
                      i.   CPA Audited financial statements

FEES AND EXPENSES:         Whether or not loan documentation is agreed to and
------------------         whether or not any loan hereunder or thereunder is
                           made, Borrower will pay all of CNB's expenses
                           incurred in connection with the negotiation and
                           documentation of these Facilities and the
                           preparation, administration and enforcement of this
                           Commitment Letter, the loan documents and these
                           Facilities (including all fees, expenses and
                           allocated expenses of CNB's in-house or outside
                           counsel).

FURTHER ASSURANCES:        Immediately following any request by CNB, Borrower
-------------------        shall provide to CNB such further documents,
                           instruments, opinions and assurances as may be
                           requested from time to time by CNB in connection with
                           the Facility.

CNB reserves the right in its sole discretion to cancel its commitment to make
these Facilities available and to terminate its obligations hereunder (a) upon
the occurrence of any material adverse change in the financial condition of
Borrower or any guarantor, including, without limitation, Borrower's default on
any other obligation Borrower may have to CNB unrelated to this Commitment
Letter; or (b) in the event that loan documentation for the Facilities is not
executed by Borrower and CNB within a reasonable period of time.

This Commitment Letter is provided to you solely for the purpose described
herein and may not be disclosed to or relied upon by any other party without

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EMRISE Corporation.
ABL Commitment Letter
October 5, 2006
Page 5

CNB's prior written consent. Kindly indicate your acceptance of this commitment
by signing the enclosed copy of this letter and returning it to us prior to
3:00 p.m. on October 16, 2006. Unless prior to such time we have received such
copy executed by Borrower, this commitment shall expire without further notice.

Sincerely,

City National Bank, a National
Banking Association

By:      /S/ BILL NIETACHMANN
         -------------------------------------------
         Bill Nietachmann, Senior Vice President

Accepted and agreed this 11th day of October 2006.

EMRISE Corporation

BY:      /S/ CARMINE T. OLIVIA
         -------------------------------------------

TITLE:   Chairman, President & CEO
         -------------------------------------------

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